State Highway 121 Financing
The Baumbach Campaign
April 9, 2006
In discussing solutions for the much-needed expansion of State Highway 121,
it is tragic that proposals addressing its financing are obscured by the mountains
of spin - misinformation that typically accompany controversial issues. The
victims, as usual, will be the voters and those of us who will bear the burden
of a poor, misinformed decision.
The spin revolves around three main points:
1. Tolls will recover the
costs of the project plus some "excess revenue."
2. If North Texas Tollway Authority (NTTA) builds and operates the highway,
these revenues will be used for road projects outside Collin County.
3. If the road is not tolled, it will be 20-25 years before the project can
be completed.
As with most spin, there is some truth in each. However, in each the whole truth - which changes the picture considerably - is conveniently withheld. Let's take a closer look.
Tolls will recover the
costs of the project plus some "excess revenue."
The definition of "some excess revenue" really shocks those who take
the time to research the numbers. The facts are that construction costs are
estimated at approximately $325 million. Projected tolls over the 50-year life
of the proposed contract to operate a Highway 121 toll road, however, are estimated
at nearly $5 billion! At 15 times the construction cost, the word "excess"
truly fails to capture the magnitude of disparity between cost and revenue.
I believe the omission of this information by most of the parties involved is
intentional, designed to downplay the main reason so many officials are pushing
the toll road idea: it will become a cash cow of the highest order.
There is a currently a quiet feeding frenzy going on among numerous government agencies, all vying for their share of this goldmine. Their main arguments don't address whether there should be a toll road, only about who gets how big a slice of the pie and when.
Recently, the Texas Department of Transportation (TxDOT) rejected an NTTA/Collin County proposal and is requiring new bids. This coming Thursday, they will announce their decision. Make no mistake about TxDOT's intent. These bids are not about minimizing construction costs, but the maximizing the cash flowing into TxDOT and other agencies.
Under NTTA's proposal,
some Collin County toll revenue might be used to build roads outside county.
Here's another partial truth. In fact, under ALL current proposals, much of
the $5 billion will be used for road projects outside Collin County. This is
Robin Hood in its purest form. A clause in the latest NTTA/Collin County proposal
says it all, "TxDOT views the project as a critical asset that must be
prudently developed and operated to generate revenues for other mobility needs."
Originally, "other mobility needs," meant those anywhere in North Texas. Under fire over this idea, TxDOT developed a regional philosophy it calls "near neighbor," in which it promises to keep the toll revenue in this region, but not necessarily in Collin County. Thus, large portions of revenue from 121 tolls could be spent in, say, Navarro or Ellis County.
Let's look at the issue of privatization of 121, which is also being considered. A number of our elected officials, including Commissioner Jerry Hoagland, propose that a private contractor be allowed to build and maintain the road for 50 years, allowing NTTA to collect tolls. Under this plan, the private company selected would make an up-front payment in the neighborhood of $200 - $500 million to TxDOT, Collin County, and neighboring cities and be guaranteed a minimum profit of 22%. TxDOT and the others would thus get the big dollars up front rather than have to wait for years of tolls to accrue.
This up-front pile of cash more than anything else is driving the toll-road bandwagon and causing Hoagland and TxDOT to absolutely drool. What they don't say, possibly because they don't care about it, is that control over setting and later raising tolls falls to the private operators, who typically set tolls much higher than governmental agencies like NTTA. And since many of the likely contractors are foreign-owned, the revenues they earn are shipped off to Spain or Sweden.
Unless 121 becomes a
toll road, expansion is 20 to 25 years away.
This is true only if there is no one willing to fight for needed changes in
state and federal laws. The truth is that such changes are not on the agenda
of the Texas Legislature, the Governor or the Collin County Commissioners Court.
For several years Austin has under-funded highway construction and has begun
pushing toll roads to make up the difference. Any map of Collin County will
show that it has much more than its share of toll roads. Plano will soon be
surrounded on three sides by tollbooths. Why? Because our leaders let Austin
get away with it!
The last two sessions of the state legislature have been about no tax increases. This is a curious stance since tolls are a form of taxation, and under this proposal we'll be saddled with $5 billion in taxes over the next 50 years. These toll taxes are scheduled to increase every 5 years. The often cited figure of $0.12 - $0.17 per mile is only the start - by the end of the contract term, the tolls will be over $0.25 per mile.
These tolls will be collected with an "all Electronic" System. No cash accepted. If you don't have tolltag, you get a fine. Since I would assume that most out-of-town vehicles will not have a tolltag, it is obvious who is being taxed - the citizens of Collin County.
Our highways were once considered vital components of our public transportation infrastructure - operated by government as strategic resources, in trust for its citizens. Today we are poised to enter a new era in which our roads are considered "assets" - exploitable sources of income to be used by any and all comers.
If toll roads are our future, and I am not resigned to this inevitability, we must proceed with a firm understanding. Tolls should be designated only to pay off construction costs. Once a road is paid off, the tollbooths should come down. The call for changing roads to exploitable assets must be answered with "Our roads are not for sale!".
You, the voters have the final say. Armed with the facts, I trust in your ability to make wise choices for the future of Collin County.
Bill Baumbach
Democrat for Collin County
Commissioner, Precinct 2
Contact:
bill@baumbach.org
www.baumbach.org
Cell: 972.979.6449