The Collin County Observer

North Texas Tollway Authority OKs rate hike

Friday, July 17, 2009
By MICHAEL A. LINDENBERGER / The Dallas Morning News

Come September, everyone in North Texas will pay more to drive, not just the toll road users whose rates are about to rise sharply.

Thursday's decision by the North Texas Tollway Authority to raise tolls across its system beginning Sept. 1 will mean that TollTag users will pay, on average, 14.5 cents per mile. Current toll charges typically average about 11 cents per mile.

The extra pennies can add up. For customers with a TollTag, a commute from Frisco to downtown Dallas on the Dallas North Tollway will now cost $43 a week, instead of $31.50.

For those without a TollTag, the bill jumps from $43.70 to $65.90.

Those higher bills will drive some toll road users off its roads, NTTA officials said Thursday – a sentiment reflected loudly in dozens of comments made to The Dallas Morning News' Web site. That means traffic on North Texas' already clogged free roads is going to get more congested. Everyone will pay more, in terms of gas and time, to get from one place to another.

NTTA board members voted 8-1 to support the toll increase, which staff had insisted was necessary to satisfy agreements NTTA struck with creditors who have lent the agency about $6 billion.

"This organization lives off of borrowed money," said board member Gary Base of Collin County, who leads the finance committee and supported the increase. "This is not money that we have. And we as a board have fiduciary responsibility to these debt holders."

Board member Bob Day, a Dallas County appointee, voted no. Day tried to persuade his colleagues to phase the increase in over two years, but staff warned that doing so would cost the agency about $14 million in revenue. The board rejected Day's proposal 7-2.

And it guaranteed that rates will continue to rise, approving a measure that would trigger automatic 6 percent rate increases every two years – without the need for another board vote.

Board member Ken Barr, former mayor of Fort Worth, said more frequent, smaller rate increases will be easier to accept in the future.

"One of the reasons we are faced with this large increase today is that increases haven't come often enough in the past," Barr said.

NTTA has raised rates only five times previously, and before Thursday's vote, its policy was to change rates every five years.

Chairman Paul Wageman, a Collin County appointee, said the agency has been asked to build billions of dollars worth of toll roads, in part because lawmakers have refused to raise gasoline taxes to build additional free roads.

"For too long NTTA has hid its light under the bushel and not appropriately charged for the services it provides," Wageman said.

Before Thursday's decision, however, NTTA had already raised tolls recently. In addition, rates on the Sam Rayburn Tollway had already been set higher than rates on its other roads.

What's the rush?

So why the sudden rush to raise rates again, and by so much?

NTTA officials at first billed the increase as a necessary response to keep lenders happy. NTTA owes some $6 billion, and its bond covenants require its revenues be at least 1.5 times the agency's soaring debt payments. Without a rate increase, NTTA's revenues would fall below that level soon.

That's because traffic has not lived up to projections on its newest road, Rayburn Tollway (State Highway 121), and because traffic elsewhere is also lagging expectations. In addition, NTTA is having trouble collecting tolls owed on its all-electronic toll roads, and fewer customers are signing up for TollTags than NTTA had hoped.

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Bill Comments:

This was an entirely predictable outcome of overpaying for the SH 121 concession.

TXDOT and the local RTC were greedy, wanting billions in "upfront money" that forced NTTA to borrow heavily to obtain local control over our local road.

The NTTA paid over $3.2 billion to complete and operate a road that at the time the decision was made to go with a CDA, the construction was estimated to cost only $325 million to complete.

Drivers will pay over $5 billion in tolls before NTTAs contract expires. That's $5 billion in tolls for a road that cost $325 million.

Note you will be paying over $4.5 billion in excess taxes just for one road - and the contract with TXDOT allows NTTA to raise tolls from the current 11 cents/mile to over 25 cents per mile.

But the bond holders will be happy!

The lesson here is that CDAs are poor public policy. Only the financiers make money when highways are pawned for huge cash down payments.

Tolls will continue to climb until the citizens demand that traditional bonds or more conventional "pay as you go" toll financing is used to construct new roads.

Bill