Statesman Debunks Texas Toll Road Promises

TxDOT's much-touted
'Economic Engine' Runs Like
an Overpriced Jalopy.

Toll roads and diversions of Billions of tax dollars are being forced on Texans by the likes of Gov. Perry and Sen. Kirk Watson.

This important Statesman article finally exposes how the promises of revenue generation turns out to be a massive financial albatross. Here's how the con works: We pay and pay and pay - the elite benefit by Billions.

And, we now find out that Loop 1, Texas 45 North and Texas 130 tollways are under performing at less than three quarters of what was projected.

A myth cultivated by TxDOT in order to promote their road privatization solution as a cure-all for funding shortfalls, is debunked by Austin American Statesman transportation reporter Ben Wear today. Better late than never, Ben tells of TxDOT's "I've got some swampland to sell you" pitch:
It was the first, and seemingly best, argument I heard for toll roads when I got this beat more than four years ago. Haven't heard it much lately, however.

Toll roads, Texas Department of Transportation officials said, would be an "economic engine" for highway financing as gas taxes grow increasingly scarce, generating excess cash that could be spent on other roads. Like in Houston, they'd say, where the Harris County Toll Road Authority has spun off cash for other nontoll projects and still has hundreds of millions of dollars stockpiled.
Asking the right questions at the right time:
But when TxDOT officials the other day gave legislators a spreadsheet with the agency's expected cash flow through 2015, I didn't see any toll road profits in there. I asked James Bass, the agency's chief financial officer, about that. After all, TxDOT owns six toll roads now, including three in the Austin area. Won't they be throwing off some cash, I asked Bass?

Not anytime soon, he said.

So I looked at the "official statement" for the Central Texas Turnpike Project, which is the overall name for the Loop 1, Texas 45 North and Texas 130 tollways. It was a thick document shared with the investment community before the agency went out and borrowed $2.2 billion on the bond market in 2002.

The numbers are startling. It looks like the only thing throwing off dollars will be TxDOT itself.
The first shoe drops. BORROWING $2.2 BILLION EQUALS $7.2 BILLION IN DEBT and more expenses to boot. That's real money folks!:

According to that statement, the three roads will make $8.7 billion in toll revenue through 2042. In that same time, there will be $7.2 billion in debt payments for that borrowed $2.2 billion, $1.1 billion in operations costs, $752 million in routine maintenance and $388 million for long-term maintenance. The net of all that? Almost $750 million in the hole over 35 years.
The second shoe drops. Austin new toll roads 130, 45 and 1 are performing at only 73% of the promised traffic projections!:
The three roads made $27.5 million from January through November, $3.6 million in the last month, which equates to about $31 million for the first full year. That's well under the $42.4 million first-year projection in the official statement. That statement shows revenue nearly doubling in three years, to $79.4 million, and then topping $100 million in year five.
Now I know why TxDOT has not sent me the traffic projections I asked for almost 2 months ago. Instead, they asked the AG if they could keep them a secret.

Part of the toll road scam is producing traffic and revenue projections that promise much more than can be delivered.
Standard and Poor's bond analysts, after reviewing forecasting case studies for years, have concluded
"Optimism bias remains a consistent feature of toll road traffic forecasting."
Two of our largest tollers, Gov. Rick Perry and Sen. Kirk Watson don't care. As their special interest pals benefit off our tax dollars, debt, right of way and toll taxes, Perry and Watson laugh all the way to the bank.

Too bad our families are the ones who pay and pay and pay.

Important related articles:
Who Voted for MORE Central Texas Tolls?

Taxpayer's Pay Sen. KIRK WATSON $450 hr for Land Deals!

Given Out By Central Texas Toll Authority!

Everything You Need To Know About Austin Freeway Tolls

TxDOT's Bob Daigh and Convicted Criminal Toll Freeways

1 comment:

Anonymous said...

Ben is certainly not an investigative reporter. They are almost extinct.

Establishment House Organs like the AAS would never hire someone who digs too much. They are too afraid of losing revenue, and too chummy with politico's who provide them "access" to their canned interviews and talking points.

If it weren't for guys like you, this whole scam would be rolling along in the dark. Nobody would have a clue or even care until it was too late.

Here's to you, Mr. attack dog, stickin' it to the man Muckraker guy!