Saturday, December 20, 2008

"Sluggish traffic raises questions about whether some roads will be able to pay the decades of debt remaining without tapping tax money."

Central Texas tollway traffic slows to near-idle

Summer gas-price spike, economic downtown raise long-term revenue questions.


By Ben Wear
Austin American-Satesman
Copyright 2008

The combination of sky-high gas prices this summer and then a plunging economy this fall has caused toll road use in Central Texas to stagnate, tollway officials say, and many tollways across the country have seen falling traffic. The sluggish traffic raises questions about whether some roads will be able to pay the decades of debt remaining without tapping tax money.

In the Austin area, although traffic on all four tollways (three run by the state, one by a local authority) is at or above levels of a year ago, two of the toll roads are bringing in less revenue than was projected when money was borrowed to build them. Revenue on Loop 1 for September through November was about 2 percent less than for the same period of 2007.

The overall performance of the three Texas Department of Transportation tollways — traffic has been essentially flat since May — and the lagging development picture in Central Texas suggest that the system of roads could struggle to meet projections of revenue increasing more than 60 percent over the next two years.
"It's going to be very difficult for (TxDOT) to reach their projections if the region's population doesn't grow the way they projected," said Peter Samuel , who edits and has followed the turnpike industry for 15 years. "I think (Texas) 130 is obviously the most vulnerable of those roads to a downturn because it's more in a developing area."

Mark Tomlinson , director of TxDOT's turnpike division, said Texas 130 traffic could see a boost next year when the Texas 45 Southeast tollway is opened and allows drivers to get back to Interstate 35 without stopping.

And he said he took comfort in the continuing revenue growth of what is called the Central Texas Turnpike System, made up of Texas 130, Loop 1 and Texas 45 North. For the September through November period, the three roads brought in $14.1 million , 13 percent above projections.

"Just looking at the trend, the system looks good for the year," Tomlinson said.

However, the numbers indicate that all of the heavy lifting financially is being done by Texas 45 North, an east-west tollway that connects to Loop 1, Texas 130 and 183-A (operated by the Central Texas Regional Mobility Authority).

That road's quarterly revenue was 45 percent above projections and 7 percent above the same period last year, but monthly income has been more or less unchanged since April.

\• Loop 1, which lies at the north end of free-to-drive MoPac Boulevard, was 10 percent below projections and 2 percent under the same period in 2007 .

\• The 49-mile-long Texas 130 tollway had 65 percent more revenue than last year, when one 11.5-mile section had just opened and another 8.7-mile piece was not yet open. But its September-November revenue of $5.8 million is 9 percent below projections.

\• Traffic and revenue projections, first made in 2002 when TxDOT borrowed $2.2 billion to build the three roads and later updated, show rapidly increasing revenue in the early years. For instance, revenue in 2008 was expected to be about $42.4 million , going to $79.4 million by 2010 and almost $101 million by 2012 .

\• Actual revenue for the year that ended Sept. 1 was $48.9 million , meaning it will have to grow 61 percent in two years and more than double over the next four years to hit the target marks.
And even if revenue reaches these rapidly growing projections, TxDOT will still have to pump tax money into the system: Those original estimates show "commission support" — money from TxDOT's tax-and-fee-fed general fund — of $7.2 million in 2010 , and continuing subsidy of the system through 2025 .

Traffic has fallen on many toll roads beyond Texas borders, Samuel said.
"Around the country, you've many of them 4 percent to 5 percent below last year," Samuel said. "California is the worst of all, 10 to 15 percent. And (tolled) border crossings into Canada are the worst of all.
"There's no doubt the toll roads have suffered more than the free roads," Samuel said, saying toll roads have lost about twice as much traffic in general.

Officials with the North Texas Tollway Authority, which operates three toll roads in the Dallas area, this month lowered their revenue projections for 2009 by 7 percent . And traffic on the President George Bush Turnpike was 8 percent lower in November than in November 2007.
"When the high gas prices hit, some people began using alternative forms of transportation," tollway authority spokeswoman Susan Slupecki said Friday, "and we just haven't seen that ridership return."

Aside from any financial troubles existing roads might experience, does this tepid revenue mean that toll authorities in Austin might have trouble securing loans for the five other roads approved last year?

"I don't think so," said Michael Walton , who holds the Ernest H. Cockrell chair in engineering at the University of Texas and is a transportation consultant. "I don't believe it's a significant long-term problem because we're in the early stages of development on those roads. As they become more of the economic fabric, then utilization will continue to grow."

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