Watch the report and analysis by an all-star panel including Holly Hansen with The Texan and Charles Blaine with Texas Scorecard on the SH 288 private toll road buyout by TxDOT on Fox-TV 26 Houston here.
Tag: SH 288
Incoming House members ask Abbott’s Commission to declare end date on SH 288 tolls
Chairman J. Bruce Bugg, Jr.
Texas Department of Transportation
125 East 11TH Street
Austin, Texas 78701-2483
August 20, 2024
Commissioner Bugg:
As Republican nominees for the Texas House, we are extremely concerned by the action the Texas Transportation Commission took recently to spend over $1.7 billion ($1,700,000,000) of public money to seize control of a toll road (State Highway 288) with absolutely no commitment to end the tolls.
The Republican Party of Texas’s 2024 Platform states, “We call on the Texas Legislature to abolish existing toll roads.”
We recognize that in many instances the state cannot abolish existing toll roads without the use of public money, but your decision to do so without a clear commitment to end the tolls is the worst of all worlds for taxpayers and amounts to nothing less than double taxation.
Furthermore, it is our understanding that the state may secure purchase of this existing, fully operational road by issuing nearly $2 billion in new debt, which will assuredly be repaid by the tolls you are refusing to remove. The key diUerence is that at the end of the current agreement with the private operator, the tolls come oU. With this new arrangement, no such end date exists. Again, the worst of all worlds.
Regardless, the Department’s stated position to maintain the tolls on this road even after this large expenditure of public resources sets an alarming precedent. Upon oUicially taking the oUice of State Representative, we are committed to passing legislation that protects the interests of taxpayers from similar abuses. The actions by TxDOT are out-of-step with the Republican Party of Texas’s Platform and we are committed to changing that as soon as practicable.
Sincerely,
Shelley Luther
Republican Nominee, HD 62
Mike Olcott
Republican Nominee, HD 60
Trey Wharton
Republican Nominee, HD 12
Wes Virdell
Republican Nominee, HD 53
Katrina Pierson
Republican Nominee, HD 33
David Lowe
Republican Nominee, HD 91
AJ Louderback
Republican Nominee, HD 30
Andy Hopper
Republican Nominee, HD 64
Helen Kerwin
Republican Nominee, HD 58
Brent money
Republican Nominee, HD 2
TxDOT pushes ahead with buyout of SH 288 private toll road
TxDOT pushes forward on buyback of SH 288
Action would reduce average daily toll rates by 50%
Aug. 23, 2024
AUSTIN – To provide Texans with toll relief and more free lanes on which to drive, the Texas Department of Transportation (TxDOT) is preparing to terminate the SH 288 Comprehensive Development Agreement (CDA).
This action will place the SH 288 managed lanes in Harris County under full state control allowing future toll rates to be significantly less than what is allowed under the current agreement and enabling TxDOT to move ahead with adding more free lanes along SH 288.
“Building roads, reducing tolls, and saving taxpayer money are top priorities,” said Governor Greg Abbott. “All three are achieved with the Texas Department of Transportation terminating the SH 288 Comprehensive Development Agreement. It will allow the State of Texas to receive over $2 billion in added valuation. TxDOT will use the added value to slash future toll charges and to build free lanes on that segment of State Highway 288. I thank TxDOT for making it easier and cheaper for Texans to travel that route.”
The public can expect a reduction of average daily toll rates by 50% in the next few years. Also, TxDOT will be prepared to begin construction of additional free lanes along portions of SH 288 by no later than 2030, eliminating the contractual restrictions and repayment requirements specified in the current concession agreement.
“I have worked every day for the last few weeks with TxDOT, the Governor, and the Attorney General to bring about this historic action to terminate the SH 288 Comprehensive Development Agreement with a foreign company,” Lt. Gov. Dan Patrick said. “It was a team effort. We will provide meaningful relief for Texas drivers along this corridor. Securing a more than $4 billion asset for just $1.7 billion will not only benefit Texas drivers, it will also enable TxDOT to continue investing in and advancing crucial roadway projects across the state. This strategic action demonstrates our commitment to making fiscally responsible decisions and prioritizing the best interests of Texas and its residents.”
“By taking this proactive, cost-saving opportunity, Texas will be able to provide toll relief by reducing average toll rates by 50% for drivers as soon as possible,” said Texas Transportation Commission Chairman Bruce Bugg, Jr. “By terminating this CDA, Texas will also be able to accelerate the construction of general-purpose lanes much faster than what the current CDA allows us. This is a big win for our taxpayers.”
TxDOT believes the cost of the “buy out” provision in the contract is substantially below the value of future toll revenues on the corridor—even with the anticipated reduction in toll rates. It is expected that the “buy out” payment of $1.7 billion would be paid off with future toll revenue bonds, ensuring that other planned projects around Texas will proceed on schedule.
Additionally, Texas can pay off debt at least 10 years earlier than the current concession agreement, allowing future tolls to be removed.
The state intends to assume operations in October 2024. Aside from lower toll rates and additional free lanes in the future, drivers should not expect to see any notable changes regarding maintenance, operations or billing.
Contact Media Relations at MediaRelations@txdot.gov or (512) 463-8700.
The Texas Department of Transportation is responsible for maintaining 80,000 miles of road and for supporting aviation, maritime, rail and public transportation across the state.
Connecting You with Texas
DOUBLE TAX: TxDOT buyout of private toll road draws ire
TxDOT Toll Road $1.7 Billion Purchase Plan Draws More Complaints from Elected Officials, Candidates
Officials and candidates see the move as a form of double taxation.
Kim Roberts – Aug 22, 2024 – The Texan
A Texas state senator, a House member, and several House candidates have joined in expressing concerns about the Texas Department of Transportation’s (TxDOT) decision to purchase the Highway 288 toll road in Harris County for $1.7 billion and continue charging tolls for its users.
Rep. Briscoe Cain (R-Deer Park) raised questions about the decision and how much it will ultimately cost taxpayers.
“How much will this cost taxpayers to pay for this existing highway, given that TXDOT plans to issue bonds at today’s rates to pay itself back for the purchase of the road?” Cain inquired in his letter posted on X.
Sen. Mayes Middleton (R-Galveston) also sent a letter to Chairman Bruce Bugg of TxDOT expressing his concerns about the plan to continue charging tolls on Highway 288 even after purchasing it with taxpayer dollars.
“This is a form of double taxation and is antithetical to Texas’ tax-friendly reputation,” Middleton stated in his letter.
He also pointed out that the tolls that will be charged after the purchase have the “same built-in profit rate as the private toll operator,” which Middleton said is “far above maintenance costs.” He called on TxDOT to eliminate the tolls on the road completely.
Joining Cain’s and Middleton’s concerns about the purchase are nine Republican nominees for the Texas House. They include Shelley Luther, Mike Olcott, Trey Wharton, Wes Virdell, AJ Louderback, Andy Hopper, Katrina Pierson, Helen Kerwin, and David Lowe.
In their letter, the nominees recited the Republican Party platform plank that states, “We call on the Texas Legislature to abolish existing toll roads.”
While the group of nominees acknowledges that abolishing existing toll roads may require the use of public money, they decry TxDOT’s plan to continue charging tolls, saying it sets “an alarming precedent” and “amounts to nothing less than double taxation.”
The toll road was constructed by BlueRidge Transportation Group and extends about 10 miles from Blodgett Street in Harris County southward, ending approximately at the county line between Harris and Brazoria counties. According to TxDOT, “The highway serves as an important thoroughfare into Houston and the primary express artery to the world’s largest medical complex, the Texas Medical Center.”
When The Texan previously asked about the total cost of the purchase, including finance costs, TxDOT spokesperson Adam Hammons said it is “too soon for TxDOT to make specific public disclosures of debt at this time.”
About the continuing toll charges, Hammons said that TxDOT anticipates reducing toll rates in the future, but that “during the contractually required transition period,” tolling policies that require some of the toll rates to increase each year based on inflation data on January 1 will continue.
Are taxpayers getting DOUBLE TAXED? SH 288 toll road must have tolls come down
TxDOT to Purchase Houston Toll Road, Questions Remain About Total Cost
The agreement with BlueRidge to operate Highway 288 will end in October.
Last week, the Texas Transportation Commission voted to approve the purchase of toll road Highway 288 in Harris County for $1.7 billion.The toll road was constructed by BlueRidge Transportation Group and extends about 10 miles from Blodgett Street in Harris County southward, ending approximately at the county line between Harris and Brazoria Counties. According to the Texas Department of Transportation (TxDOT), “The highway serves as an important thoroughfare into Houston and the primary express artery to the world’s largest medical complex, the Texas Medical Center.”
The original comprehensive development agreement gave TxDOT the right to terminate the agreement “if the department determines in its discretion that a termination is in the department’s best interest.”
TxDOT spokesperson Adam Hammons told The Texan this purchase is not part of a larger strategy to buy toll roads in the state, but is a one-time opportunity based on this specific concession agreement.
TxDOT notified BlueRidge of the termination, effective October 8, 2024.
Rep. Briscoe Cain (R-Deer Park) posted a letter to X with questions for TxDOT that he believes are important to understand about the buyout of Highway 288.
“How much will this cost taxpayers to pay for this existing highway, given that TXDOT plans to issue bonds at today’s rates to pay itself back for the purchase of the road?” Cain inquired.
To acquire the road, the commission created a corporation and expects that the buyout payment will be repaid with future toll revenue bonds, Hammons confirmed to The Texan. The toll revenue of Highway 288 users will be used to repay the bonds, he said.
“The creation of the corporation allows for the Commission to provide a loan to the corporation that can be paid back through the sale of bonds more quickly than through toll revenues alone,” Hammons said.
When asked about the total cost of the $1.7 billion buyout, including financing costs and interest, Hammons said it is “too soon for TxDOT to make specific public disclosures of debt at this time.”
Cain also inquired about whether tolls will continue to be assessed for use of the road.
Hammons confirmed that tolls will continue to be collected after the termination of the agreement, “focusing on SH 288’s needs and future transportation infrastructure within the region. Future decisions regarding tolling policies, pricing, and operations, will be made under the authority of the Texas Transportation Commission.”
He added that TxDOT anticipates reducing toll rates in the future, but said that “during the contractually required transition period,” tolling policies that require some of the toll rates to increase each year based on inflation data on January 1 will continue.
“It’s very disappointing that TXDOT is going to make a major policy decision that will force taxpayers to pay twice to drive on a road without coming to the legislature for guidance or approval,” Cain told The Texan.
“Using taxpayer dollars to buy a toll road and then charging those same taxpayers to drive on the same road is the equivalent of a double tax. In Texas, that dog won’t hunt. The people are taxed too much as it already is,” he added.
Texans Uniting for Reform and Freedom (TURF) is opposed to all toll roads but favors the state buying toll roads and eliminating the tolls.
Hammons didn’t indicate any plan to end the tolls on Highway 288 in the future.
“While we don’t support issuing debt, we believe having the roads in public hands is better,” TURF founder and executive director Terri Hall told The Texan. She pointed out that the original agreement was made with BlueRidge Transportation Group, a subsidiary of the Spanish company ACS Infrastructure Development.
Hammons did not answer whether TxDOT has cash on hand to pay for the toll road without revenue bonds. He reiterated that TxDOT is providing a loan to the corporation that will be paid back by bonds issued by the corporation.Based on their wording, it appears that neither Proposition 7 nor Proposition 1 funds can be used to purchase a toll road.