Tolls come down: Precedent set as toll comes off two Texas highways

The bureaucrats couldn’t fight the momentum. Texans have been calling for tolls to come off roads once they’re paid for and thanks to passage of Senate Bill 312, the Texas Transportation Commission voted to do just that on Camino Colombia SH 255 in Laredo and on Cesar Chavez Border Highway in El Paso. To add icing on the cake, the Dallas City Council also voted to deep six the controversial Trinity Toll Road after a 20 year battle, and the Commission is also mulling changing plans on US 183 North in Austin to expand it as non-toll instead of tolled. All that in a matter of weeks.

The last time tolls were removed from a road in Texas was in 1977 — forty years ago. But it’s not without some wailing and gnashing of teeth by the Texas Department of Transportation (TxDOT) and the Commission that governs it.

TxDOT never thinks it has enough money, despite Texans voting to swell its coffers by nearly $5 billion more a year by passing Proposition 1 (in 2014) and Proposition 7 (in 2015). So the department cannot stand the idea of losing its own personal revenue stream that’s not accountable to taxpayers, and it fought tooth and nail to prevent it. But thanks to quick work by State Representatives Joe Pickett (D – El Paso) and Richard Raymond (D – Laredo), they attached their amendments to take the tolls off highways in their districts to must-pass sunset legislation, and both amendments managed to survive a pro-toll conference committee.

Commissioner Jeff Austin said he hates to see the revenue removed from Camino Colombia though he also stated he was in support of taking the toll off as an isolated incident. Austin tried to limit support for removing tolls strictly to roads that would never need to be expanded. So all these toll ‘managed lanes’ (that are not financially viable projects to begin with) that are plunked down the middle of existing highways in urban areas are roads that will need future expansion. So it’s safe to conclude Austin is arguing for tolls to remain in perpetuity as long as they can find another use for your money (ie – extending the toll road at some future time).

Make no mistake. TxDOT does not want tolls to stop because it sets a precedent and expectation that tolls should come off roads once the debt is retired. The only reason these tolls are coming down is because lawmakers had to force it through legislation. TxDOT argues no road is ever paid for because of maintenance. But Pickett, former House Transportation Committee Chair for many years, rejects that argument saying that the department could absorb the cost of maintaining the small network of toll roads currently open to traffic once the debt for those highways is paid off.

It’s like a drop in the bucket according to Pickett. “I’d like to think a state that maintains 80,000 miles could absorb 400-500 miles of lanes if it took the tolls off certain projects,” Pickett argued at an interim committee hearing last year.

Pickett said that only 6 percent of the traffic on the Border Highway uses the toll lanes and they’re only used roughly two to three hours a day. He argues the toll ‘managed lanes’ cause more traffic than they alleviate.

“We have a road that goes unused 21 hours a day, seven days a week,” Pickett said. “That’s ridiculous.” He later told the Commission that “not all toll projects are bad, just most of them.”

Pickett told the Washington Post that ‘tolls are designed to be in perpetuity now,” allowing unelected bureaucrats to grow their toll systems into ‘bureaucratic behemoths.’

Raymond echoed Pickett’s sentiment during a House Transportation Committee hearing on his stand alone bill in April, “You don’t want a toll on this road. It’s paid for. It just doesn’t make sense.”

Most Texans wholeheartedly agree with his assessment. No one should be charged a toll to use a road that’s paid for, otherwise it’s double taxation. The move to remove tolls once a road’s debt is retired is one of several recommendations that came out of the interim legislative study by the House Transportation Committee when it was led by Pickett in 2016. It’s also in keeping with the 2016 Texas GOP platform that calls for the same.

History of double taxation
In 2000, Camino Colombia started as Texas’ first privately built and operated tollway, hoping to capture border traffic and attract trucks from nearby congested Interstate-35. But just like SH 130, Texas’ first public-private partnership (P3) that opened twelve years later in 2012, it went bankrupt shortly thereafter. TxDOT bought the $85 million Camino Colombia tollway for $20 million from an insurance company that snatched it up at a fire sale price on the courthouse steps for $12 million. No debt was owed on SH 255 from that point on, yet TxDOT continued to charge tolls and traffic remains anemic. Local officials are hopeful now that tolls are coming down that trucks will finally move off I-35 in Laredo and take SH 255, which was designed as a bypass to avoid downtown congestion in the first place.

The Border Highway toll managed lane project was also paid for with state funds, yet Texans have to pay a toll to use it. Even more egregious is the Loop 375 Border West Expressway, also in El Paso, that’s not even open yet.

First, the entire project is paid for state funds. Not one penny of debt is owed, yet drivers will be be charged tolls to use it (it’s currently under construction). The project is jointly owned by the state and the Camino Real Regional Mobility Authority (or RMA), even though the RMA put no funds into the project. The state gave them $500 million in Texas Mobility Funds, granting the RMA ownership in proportion to that dollar amount, and the state paid the $130 million balance of the $630 million project with gasoline taxes.

So the state gave away more than eighty percent ownership to an unelected toll authority who will gain over eighty percent of the toll revenues in perpetuity for a highway that’s already paid for by taxpayers. Pickett warned the Commission this project would likely spark another fight to remove the toll designation when it comes online.

More Texas highways share the same genesis as Camino Colombia and Cesar Chavez — projects that are 100% paid for with gas taxes and other public funds (like the Katy managed toll lanes in Houston and MoPac, SH 71, SH 45 SW, and SH 45 SE in Austin), yet tolls are being charged simply as a new tax for bureaucrats to spend (and raise in perpetuity) without accountability.

End run around toll removal
The drumbeat to remove tolls once a road is paid for has prompted toll bureaucracies and TxDOT to refinance their toll systems in order to co-mingle the projects financially into a single system so that they can claim nothing is paid off for at least a generation. But such moves by unelected boards triggers greater anti-toll fervor, and the call to remove tolls only gets louder as other parts of the state ask why they are being charged tolls when others get the benefit of having tolls removed. It’s going to get harder and harder for elected officials to answer those questions and survive politically.

While President Donald Trump seems bent on pushing tolls and more P3s at the federal level, Texas continues to experience toll fatigue and gets Texas-sized pushback to more tolling, especially in the hands of private companies that get bailed out by taxpayers.

SH 130’s recent bankruptcy sent a grassroots coalition over the edge prompting them to fire off a letter to Attorney General Ken Paxton asking where was the state in representing the public interest in bankruptcy court when it wiped out nearly all of the $1.4 billion of the private entity’s debt (it now owes a mere $250 million), giving the highway that’s virtually paid for to the previous bond holders to continue to soak Texas taxpayers with tolls for the next 45 years? The new owner-operators stand to make millions, if not billions, in profit for the next two generations thanks to the generosity of the courts.

Expect the demand for tolls to come down to get fierce by the time the legislature comes back into session in 2019. Senator Lois Kolkhorst and State Rep. Matt Shaheen have consistently authored the bill to do just that. Neither bill got a hearing in the last two sessions, but Shaheen offered it as an amendment to SB 312 and it failed 74-53. Those numbers will likely reverse by 2019. Anti-toll advocates are working furiously to ensure that’s the case.