SHOCK: Houston toll agency surrenders control to TxDOT

Link to article here.

Houston toll agency surrenders control to TxDOT
By Terri Hall
June 17, 2014

The US 290 project in Houston used to be held up as an example of local-state cooperation on how transportation projects could be accelerated back in 2012. But that was then and this is now. Last week, the Harris County Commissioners Court approved a deal that cedes control of several Houston-area toll projects to the Texas Department of Transportation (TxDOT), a state agency infamous for its penchant to impose tolls on Texans.

The Houston Chronicle suggested that the deal could mean more free lanes on the U.S. 290 project, but don’t hold your breath. TxDOT has discovered how to self-fund its agency with unlimited taxation through tolls. The Commissioners approved a deal that would hand over not only the U.S. 290 toll lanes, but also cede the managed toll lanes on I-10 to TxDOT as well. The county would still receive one-third of the I-10 toll revenues, but the state would gobble-up the rest. The rub that caused the rift on U.S. 290 was over entrance/exit ramps from the inner toll lanes. Local taxpayers will still be subsidizing the toll lanes and will be charged again to actually use the lanes.

A little history lesson is in order to put this significant move in perspective. In 2007, there was a big fight over who should control toll projects - local toll authorities or TxDOT. TxDOT had approached the Harris County Toll Authority (HCTRA) and the Harris County Commissioners to sell their system to a private toll operator, who could get away with charging more.

The county told TxDOT to get lost. They didn’t like these public private partnerships (P3s), known as Comprehensive Development Agreements in Texas - the loss of control, the non-competition clauses, higher tolls, or lack of transparency. But, TxDOT persisted and local toll agencies turned to the legislature for help. The real fight was over toll revenues and who got the toll booty. Local toll authorities won the battle granting them ‘primacy’ or right of first refusal on toll projects with the passage of SB 792. Only after the locals rejected a toll project could TxDOT take control and either the state would operate the project or it could transfer control to a private corporation. But expanding highways with free lanes was never the intent. It was all about tolls, tolls, tolls.

Now it seems the pendulum has swung dramatically in the other direction, giving TxDOT control of these managed lane toll projects, none of which are toll viable. That means none of them can pay for themselves with the tolls alone as the traditional turnpikes like the Sam Houston & Hardy Toll Road can. The I-10 toll managed lanes are already 100% paid for, largely with gas taxes - so tolls do not need to be charged at all on that project. Everything made on that project is gravy for whoever gets the bounty.

Managed lane projects are toll lanes added in the middle of an existing freeway. Since there are free highway lanes adjacent to the toll lanes, few choose to pay the toll unless its during peak hours when congestion on the freeway lanes is at its height. Managed lanes don’t cash flow. So every managed lane project underway will require taxpayer subsidies, loans, or loan guarantees - which is double taxation. If taxpayer money is used to build the lanes, then they should be toll-free.

Tolls on these managed lane projects are higher than traditional turnpikes and usually involve ‘congestion pricing’ - charging a premium during peak hours. Taxpayers have had little luck controlling TxDOT and its lust for tolling, so this notion that handing TxDOT control will mean more free lanes just won’t materialize. Houstonians are in for a RUDE awakening if they think they’ll be better off with TxDOT or if they’re under the Pollyanna notion that TxDOT actually cares about freedom of mobility. They certainly don’t want to provide anyone a free ride.