Monday, April 27, 2009

CTRMA tolling schemes may lead to bond default pileup down the road

Area's latest tollway is no cash cow

'Profit' from Texas 45 Southeast will be used to make up red ink on other three TxDOT toll roads here.


Ben Wear
Austin American-Statesman
Copyright 2009

How times have changed: There's a 7.4-mile-long toll road opening in greater Austin in three days, weather permitting, and you don't know about it. Well, now you do. After a ribbon-cutting Thursday afternoon, Texas 45 Southeast will run from a point on Interstate 35 a few miles north of Buda to U.S. 183 near Mustang Ridge, flowing seamlessly into the south end of the Texas 130 toll road. After a promotional period of one to two months (depending on whether you have an electronic toll tag or not), passenger vehicles with tags will pay $1 to drive it, and everyone else will be billed $1.33 by mail. Truckers will pay about four times that.

The new road will make it easier for cross-country travelers to evade Austin traffic by taking Texas 45 Southeast and Texas 130 around the east fringe of the metro edge.

It might save Lockhart commuters a few minutes. And getting from San Marcos to Bastrop or Elgin will take less time.

But what Texas 45 Southeast won't do, based on figures from the Texas Department of Transportation, is make extra money for other Central Texas transportation projects, at least not in the lifetime of most people who currently hold a driver's license.

The oddity of this is that no money was borrowed to build Texas 45 Southeast. The cost of about $180 million came purely from gas taxes and vehicle fees, unlike most toll roads, which use a combination of debt and taxes. So it would seem that the tolls would be almost pure profit that could give the area badly needed road and rail cash.

Not so, for a number of reasons.

First of all, the road won't bring in outrageous amounts of money, at least not at first. The first-year estimate, according to TxDOT Chief Financial Officer James Bass, is about $1.6 million, or about $4,300 a day. At about a dollar a ride, you can see they're not expecting much traffic initially on the four-lane expressway. Even in year 10 TxDOT is expecting only about $5.1 million of toll revenue.

About a third of that initially will go to operations, principally processing the tolls.
What's left over after operations and maintenance, now and decades in the future, won't be available, however. Instead, it will go to help pay for the expected operating deficit on TxDOT's other three toll roads in Central Texas: Texas 130, Texas 45 North and Loop 1.

Those roads do have debt, about $2.2 billion of it. The annual debt payments start out large — about $36 million this year — and then grow to elephantine size. The projected debt payment in 2042 is almost a half billion dollars. TxDOT does not expect them to make a profit until that year, though one has to wonder how.

Until then, Texas 45 Southeast, along with many millions annually from TxDOT's statewide kitty, will help make up the red ink.

A transportation source of mine years ago used a colorful, unprintable metaphor to describe how much money Texas 45 Southeast would generate when it opens.

Maybe so. But don't expect it to generate more roads.

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