“Not necessary to toll”

Paul Burka attended a committee meeting by the Study Commission on Transportation Financing, at which David Ellis, a co-author of a report by the Texas Transportation Institute (TTI) at Texas A&M, gave some interesting testimony about road funding. Executive summary: We don’t need to toll to pay for Texas’ road needs. In particular:

Over the next 25 years, the population of these areas is projected to increase by 2.8% per year, employment by by 2.3%, vehicles by 2.7%, and daily miles drive by 3%. Over the same period, the number of lane miles that can be built with currently available funding will increase by just .25% per year. Tx-Dot estimates that the state will need an additional $68 billion over the next 25 years to improve mobility. The TTI’s estimate is slightly lower, $66.2 billion. Two-thirds of the needed new construction will be in the state road system, or some $44+ billion; the remainder represents improvements to local roads.

The money for highway construction comes from three sources: vehicle registration fees, the state gasoline (more properly, motor fuels) tax, and reimbursements from the federal gasoline tax, of which Texas sends more revenue to Washington than it gets back. Of these sources, the one that matters the most is the motor fuels tax. But the tax has been losing ground to inflation in recent years.

Now, here is the crucial part of Ellis’s testimony: There are scenarios under which roads can be financed:

1. Raise the motor fuels tax, currently 20 cents per gallon, to 51 cents. Interestingly, a Tx-Dot engineer had previously told the committee that the motor fuels tax would have to be raised to $1.40 per gallon to pay for the needed new construction. Needless to say, the Legislature is not going to raise the tax by 31 cents, much less a buck twenty.

2. Raise the motor fuels tax by 8 cents and index it to inflation, using not the consumer price index, but a special highway construction index. The rate of inflation has been 1/2% to 1 1/2 percent per year.

3. Don’t raise the gasoline tax at all. Instead, index it and put the incremental revenue in the mobility fund, where it can be used to pay off bonds. And here’s the bombshell: “Under this scenario,” Ellis said, ” it wouldn’t be necessary to toll as a means of financing, although that’s certainly an option.”

While I agree that Option 1 will never happen – among other things, that would give Texas the highest state gas tax in the country, which would make it political poison regardless of its merits – I just want to point out (again!) that even at that level of taxation, you’re way better off than you’d be on almost any toll road. At 20 gallons a week, you’re talking an extra $6.20 per week, which is at worst three days’ worth of round trips on HCTRA roads. The math will always favor raising the gas tax, because the gas tax has the broadest base. Toll roads are paid for by far fewer people, so their rates are much higher. I’m going to keep saying this until everyone is sick of it, or until it becomes a standard point of discussion about toll roads, whichever comes first.

If there’s going to be anything done on this front, I see Option Three as being potentially viable. We’ll see if anyone runs with it.

Eye on Williamson and SA Toll Party have already been on this. EoW also has more about the reaction to Ellis’ testimony, which sounds priceless to me. Reading all this, it occurs to me that there’s another explanation for the pro-TTC billboards, which is not for defensive purposes but for offense, as was suggested in the comments to that post. Food for thought.

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