Wednesday, June 17, 2009

"Elected officials need to be talking to the citizens about what's coming down the pike...Dallas will have toll rates that are incredibly high."

Big upfront deal for Highway 121 toll road weighs on Dallas-area agency

Toll Road Kill

Dallas Morning News
Copyright 2009

Was $3.2 billion too much to pay for the State Highway 121 toll road? That's a question top officials of the North Texas Tollway Authority are asking themselves as they consider a staff proposal to send tolls soaring on all of its highways by Sept. 1.

It's a question that was asked two years ago, too, when state and local officials awarded NTTA the rights to the richest new toll road contract in American history. But it wasn't one that officials in North Texas asked for long.

With every dollar of the massive payment, made in cash by NTTA and reserved for roads, rail and bike trails in North Texas, officials were eager to spend the badly needed money. Scrambling to a get a piece of the Highway 121 pie, local governments submitted hundreds of transportation project proposals worth more than $8 billion.

"This is about the future," Richardson City Council member John Murphy said just after casting his vote on the Regional Transportation Council in favor of awarding the project to NTTA. "Not long ago, we were at a point where we were saying, 'Oh my gosh, where are we going to get the money to build roads?' Now, we're saying instead, 'Show us the money.' "

With resources tight everywhere, the deal was more than just a way to advance a needed highway. It was seen as a harbinger of a new way to pay for roads in Texas, where raising taxes to build them the old-fashioned way had long since run out of favor.

But just two years later, that future has turned out different from what anyone foresaw. Traffic is slowing across the NTTA toll system, where revenue is down, too. On Highway 121 itself, now known as the Sam Rayburn Tollway, traffic is nearly 20 percent below levels projected two years ago.

As a result, drivers will soon be paying more, much more, to drive on NTTA toll roads. The money from higher rates is badly needed to satisfy creditors, who are owed more than $6.1 billion.

Did NTTA simply pay too much for the toll contract? Did the Regional Transportation Council demand too steep a price? "Yes, it did," said NTTA vice chairman Victor Vandergriff. "Both in what it paid and in the way it was paid."

Paul Wageman, the hard-fighting NTTA chairman who had led the authority in its campaign to wrest the project away from its private-sector competitor in 2007, said it's too early to tell whether NTTA made a good deal with the 52-year contract. Time (and a better economy) may ease many worries, he said.

Still, hindsight makes the decision to pay so much money upfront, leveraged against future tolls, look shortsighted on the part of the agency and the Regional Transportation Council, which insisted on the payments if NTTA was to win the contract over Spanish toll road firm Cintra, he and Vandergriff said.

But if the RTC was pushing too hard, it was doing so out of well-earned frustration, even desperation.

For years, North Texas leaders had looked at the area's worsening traffic and increasing air pollution and seen a ticking time bomb capable of blowing apart the region's powerhouse economic growth.

State and federal gas taxes had been frozen since the early 1990s. Area roads got older, more expensive to maintain, and increasingly crowded. Meanwhile, every six or so years, the region said hello to a million new faces.

So it was hardly Murphy alone who looked at the 26-mile toll road running through some of America's fastest-growing communities and had a Jerry Maguire moment.

Wageman still sees the Highway 121 project as a good investment. The economy will rebound, and not even higher rates will persuade Dallas drivers en masse to trust their commutes to the region's jammed free roads. But he worries that too much is being expected from toll roads, and from tolling in general.

"There is a high level of receptivity to tolling in North Texas, especially on the eastern side of the region," Wageman said. "But TxDOT has run out of money, and now we look at a regional transportation plan that is replete with tollways. Add to that a new wave of managed lanes, a concept that is completely untested in Dallas, which will have toll rates that are incredibly high.

"My concern is that the elected officials really need to be talking to the citizens about what's coming down the pike. Sure, we're all glad there is going to be added mobility, but there is a cost associated with that."

Drivers could one day soon realize they are being tolled every which way, and decide they don't like it. "That receptivity will be gone," he said.

But if too much is being asked of toll roads, it's not because local leaders haven't tried to find other answers.

A Dallas senator led efforts to raise the gas tax in Austin this year, but failed. Local efforts to get permission to ask voters to pay more taxes and fees for roads and rail also died in Austin.
Even private toll roads, the model NTTA managed to beat out in 2007, is under a cloud in Austin, where a legal tussle over the constitutionality of long-term contracts with private toll operators has stalled two major North Texas projects.

By 2012, the Texas Department of Transportation will be out of money for new construction, officials there have said. And in Washington, the highway trust fund is running out of money, too.

"I am an NTTA board member, and I hate tolls," Vandergriff said. But for now, he and others say, it's the only option on the table.

But as tolls soar later this year, it won't just be the drivers who are paying more. If they are angry enough, or simply too strapped, they may decide to avoid them altogether, traffic jams or no. That's when North Texas will find itself right back where it started, before Highway 121: bad air, more traffic, and fast running out of options.

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