Link to article here.
The danger of borrowing anticipated toll revenues up front to spend like Monopoly money on other road projects, is that no one knows exactly how much of that revenue will actually materialize. Given that we’re in uncharted territory with the highest price of gas in history with no end in sight, these market-based toll deals are allowing politicians to gamble away our future and build another house of cards cottage industry (courtesy of road builders & infrastructure funds) for the taxpayers to bail out, perhaps worse than the current $700 billion (and counting) mortgage mess. With the biggest drop in driving in recorded history now on the books, who do they think has the money to take these toll roads?
Toll stash in Metroplex churning out dollars
By Ben Wear | Tuesday, June 17, 2008
Austin American Statesman
By this weekend, the Dallas-Fort Worth area will have another $1 million to spend on transportation. This time next month, another $10 million or so will have rolled in.
That’s what happens when you go borrow $3.2 billion, and then don’t spend it for awhile. Of course, all this “free” money will have to paid back, and then some, on the back end.
What happened is that the North Texas Tollway Authority agreed to pay TxDOT $3.2 billion for the privilege of getting to build the Texas 121 tollway in Collin County. It won this right last year in a curious bidding war with a private group headed by Spanish toll road builder Cintra. The idea is that the road is so perfectly located in Dallas’ congested north suburbs that it will belch up generous amounts of toll revenue over the next several decades. That allowed the tollway authority to borrow much of the anticipated profits upfront.
That money, in turn, will be used in the Dallas-Fort Worth area on other transportation projects, including tollways, freeways, managed lanes, traffic signals and bike/pedestrian projects. State law requires that it be spent only from whence it came.
But for now, it’s just sitting in the bank, as it were, and churning out bucks, with the exception of about $120 million already spent on projects that were underway and had gone over budget. To be specific, the money has generated $69.2 million in earnings in a little over six months. That’s more money than the 11-county Austin districts gets in a full year, and that’s back when TxDOT actually had money to pass out to the locals.
As we said above, the tollway authority will of course have to pay interest over the next 30 years or so on the borrowed $3.2 billion, money that will come from tolls. But in the meantime, the stash will generate enough money to build a next freeway interchange (or more) for each year it sits there.