TURF: “MPO rams 37 toll projects down San Antonians’ throats”

Mobility 2035During my daily review of transportation news, I came across this the-sky-is-falling press release by staunch toll-opponent Terri Hall and her TURF organization.  As usual, TURF shows a continued lack of insight of what’s actually happening and peppers the article with their predictable array of tried-and-true rhetoric, fallacies, and mendacities as they denounce the large number of projects that are listed as possible toll and Comprehensive Development Agreement (CDA) projects in the new 25-year regional transportation plan.  Yes, there are a substantial number of toll-option projects in the plan.  However, the outright panic by TURF is premature and demonstrates their failure to see and comprehend the bigger picture and actually jeopardizes badly-needed future projects.

First of all, let’s discuss what prompted their latest tirade.  On Monday, the Metropolitan Planning Organization’s (MPO) policy board will vote to approve the MPO’s 25 year long-range plan, known as “Mobility 2035“.  This plan, which is updated every five years and is required under federal law in order to receive federal transportation funds, defines the future transportation needs of the area and then consolidates and prioritizes all the planned transportation projects from the various local agencies.  Lots of computer modeling and simulations are done to determine the greatest needs and the impacts the various planned projects will have in order to make the best use of limited resources.  The plan then attempts to prognosticate future funding sources, something that, given the current transportation funding situation, is as much about guesswork as picking lottery numbers:

Traditionally, financing future transportation projects would begin with an examination of historical state and federal funding levels.  To estimate future federal and state funding for the region, a forecast based on previous authorizations would be made.  However, the insolvency of the Highway Trust Fund, federal funding rescissions, the current economic recession, and periods of high gas prices that reduced the overall amount of driving coupled with more efficient vehicles, make estimating the future funding levels based on historical data, a challenge.  Simply projecting current revenues over the past several years for the future is no longer a viable methodology for revenue forecasting. (Source: Mobility 2035 plan)

To assist MPOs with forecasting future funding, the Texas Transportation Institute developed a statewide transportation revenue forecasting model called TRENDS.  The MPO ran several “what-if” scenarios and found that only one, which used the all the “high-revenue assumptions” possible, produced any revenue for capacity improvement projects, and even then it only produced a “small amount” according to the MPO.  Therefore, the assumptions of the Mobility 2035 plan are that there essentially will be no traditional gas-tax funding available for congestion relief projects during the plan’s timeframe other than what is already budgeted.  That leaves rather paltry amounts of bond funds and other miscellaneous revenue streams available for mobility projects.  Those include Texas Mobility Funds, Prop 12 and Prop 14 (just a little more than $400 million total for the 25 year plan period, of which over $130 million has already been committed.)  In addition, there will be about $425 million in local Advanced Transportation District (ATD) revenue, $92 million in federal stimulus funds (already committed), and $87 million in pass-through financing, most or all of which is also already committed.  The plan assumes no local-option gas tax or other highly-variable funding, such as demonstration project or air quality mitigation funding, since there is no reliable means to forecast those amounts.

As mentioned above, the plan then contains an itemized list of projects expected to completed during the quarter-century planning window.  However, the plan is considered “financially-constrained”, which means that projects must have an identifiable funding source to be included in the plan and the total costs for all the projects must fit within the total amount of funding expected.  Furthermore, and perhaps the most important point for our discussion today, is that projects must have an identified funding source in the plan in order to continue the massive amounts of development work required to bring them to fruition, such as environmental studies and preliminary schematics.  In other words, planners can’t spend time working on a project that has no possible funding source identified for it.

So that brings us to the reason why so many projects are listed as projected toll and CDA projects.  Since the assumption is that there will be no gas tax funds and minimal bond funding available for future mega-projects (including expansions of Loop 1604 and I-35, along with numerous interchanges, just to name a few), some other source of funding has to be assigned to them in order for the planning process for them to continue.  If no funding source is identified, then planning on those projects must cease, and that will delay them even longer.  So the MPO chose the only funding option that was still reasonable: tolling.

It is important to note that just because a project is listed as a projected toll project in the plan does not mean that it’s set in stone. This is a point that TURF and the average citizen doesn’t understand.  But we have a great local example that proves this and also proves that authorities are absolutely willing to find non-toll alternatives: the Loop 1604/US 281 interchange project.  The entire interchange project was listed in previous MPO and ARMA plans as a toll project.  However, the unexpected availability of federal stimulus funds allowed at least half of that project to proceed as toll-free instead.  I would have hoped that TURF learned something from this and from the discussions resulting from their failed bid to remove the tolling option from 281 and 1604 recently– that leaving the toll option on the table makes sense because it keeps projects in the pipeline and gives planners the most flexibility to find funding for them.

Lastly, I wanted to touch on some specific deceptive statements and propaganda in TURF’s article.  First, they opine about how CDAs are now illegal and that the MPO is just “following TxDOT’s playbook of using it as a means to get CDAs re-authorized.”  Yes, the legislature did not re-authorize CDAs during their last regular session and subsequent special session, but they also did not ban them outright, and there is every possibility that they may re-authorize them sometime in the future.  One analyst at the Reason Foundation summed it up thusly:

As for Texas, it (CDAs) could go either way over the next few years.  The optimistic case would be that already-authorized CDA projects get completed or are well along in construction by the time of the next legislative session in 2011 while the funding gap widens even further.  The demonstration value of billion-dollar-scale PPP (public-private partnerships) toll roads being built while other needed highway projects languish for want of funding could be powerful.  And if large new public-private partnership investments are occurring in California, Arizona, Michigan, Florida, and Virginia by then, cooler heads may be able to argue that Texas should be getting its share of this investment.  That could bring back a CDA program, hopefully reformed along the lines of our 2008 committee’s recommendations.

So using CDAs as a possible future funding source is a valid mechanism to keep projects alive in the long-range plan.

Another false allegation by TURF is that CDAs would hand control of Texas roads over to foreign corporations.  This is a frequent scare-tactic used by TURF.  While it is certainly possible that a foreign company or consortium could bid to build and operate a toll project here, there is just as much likelihood that a US or Texas company or consortium would.  And, as mentioned before, listing a project as a projected CDA-funded project does not guarantee that it will be developed as a CDA.  It might be developed by a local toll authority or even be built as a toll-free project if funding becomes available.

Then they use another bit of rhetoric in their bag– that being that toll rates could be 75 cents per mile.  That is the maximum possible peak-hour toll rate that can be charged in North Texas on managed lanes (special express lanes in the middle of an existing toll-free freeway.)  For now, the two such projects in that area are expected to have a toll rate of 50-53 cents during peak periods and a non-peak toll of just nine cents per mile.  Again, these are tolls for optional express lanes adjacent to toll-free expressway lanes.  By comparison, the new Katy Freeway managed lanes in Houston have a peak toll rate of about 22 cents per mile by my calculations, so what’s happening in North Texas is by no means indicative of what can or will happen elsewhere in the state (including here.) (Oops, I omitted one toll plaza from my calculations.  With that third plaza, it looks like the Katy managed lanes are also about 50 cents per mile during peak periods.)

Then there’s a whole laundry list of TURF’s perceived evils of CDAs that I won’t even spend the time trying to refute other than to say that, like the other examples I discussed, they are mostly inflated, misinterpreted, or are not automatically applicable to every CDA.

So in summary, what TURF and even sincerely concerned citizens need to understand is this: at present, there is no expectation of gas tax funds for future transportation expansion projects.  In order for planning for probable future projects to continue, they must be pigeon-holed with a reasonable funding source in the long-range plan.  Otherwise, development on those projects must stop and that will delay them even more.  CDAs, while not currently authorized, are still a possible and therefore viable future funding source, so classifying the big, long-range projects as CDAs now allows basic planning work to continue on them.  But classifying them as CDAs in no way guarantees that’s how they’ll eventually come to fruition.

Sorry for the verbose post, but this issue really needed a thorough explanation.


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