Skip to comments.Texas' Toll Roads: A Big Step Towards Open Markets For Transportation
Posted on 10/10/2017 8:10:17 AM PDT by Tolerance Sucks Rocks
No city in America runs on anything resembling a free-market model. But Texas' major cities are probably the closest thing, with vast improvements to their economies and living standards to show for it. Their looser land-use laws mean that housing supply grows quickly, stabilizing prices. Their lighter tax and regulatory structure helps businesses locate there and grow. Andshenanigans from the governor's office notwithstandingtheir openness to immigrants means they have cheap and robust labor forces.
But one market-oriented aspect little discussed is Texas' approach to transportation. The state has 25 toll roads, more than any other state. They are particularly common in Houston and Dallas, with notable examples including the Sam Houston Tollway in Houston and the LBJ Express in Dallas. Although toll prices vary depending on time and demand, many roads are traversed for under $1.
Texas' toll roads began as public entities, but in 2003, amid shortfalls in transportation funding, a state law was passed allowing new and existing ones to enter public-private partnerships. This brought several advantages, said Bob Poole, director of transportation policy at the Reason Foundation. The private sectorwhich encompasses contractors and investors, often from overseasbrought in floods of capital and innovation, creating a much more self-sustaining system.
In a typical scenario today, said Poole, the upfront expenditures that go into building a private toll road are between 15-20% government-funded (with the revenue coming from state and federal gas taxes, which are technically a user fee anyway). This is opposed to most major roads, which saddle taxpayers with the full construction costs.
From there, ongoing road maintenance is covered by the actual road users. Poole says that oftentimes, deals are structured so that the excess revenue goes back into government coffers, or at very least, to pay off construction debts. This was confirmed by a state DOT estimate which found that eliminating tolls would cost Texas $40 billion in revenue.
But what the government is not forced to do for Texas' public-private toll roads is assume much of the risk. If a road failssuch as one stretch did along a rural portion between San Antonio and Austinit is shuttered, and the costs eaten by the private investors. Contrast this with most other major U.S. roadways, which don't have this level of user-fee-based accountability. Instead, they are funded--without question and in perpetuity--by gas tax revenue (and increasingly, general fund revenue). Without any market correction process, such roads don't endure the same scrutiny about whether they are even justified. Money for them just keeps rolling in, footed by taxpayers.
Another thing Texas' toll roads have accomplished is greater mobility. The Dallas and Houston metros, in particular, have been the nations two fastest-growing metros by net population since 2010. But their congestion levels are not as bad as similar-size metros, according to traffic studies by Inrix and TomTom. This is because they've expanded highway capacity to accommodate population growth, acknowledging that the laws of supply and demand apply to roads like with anything else. Perhaps more crucially, though, theyve priced the use of these roads, to avoid a tragedy of the commons. And it has worked at creating many excellent, self-funded roads: as I can attest from having lived last summer in Houston, Dallas and Austin, toll roads proliferate throughout each metro, are free-flowing, and charge users electronically, so that they're not having to stop and pay at booths.
The most congested portions of Texas' cities, meanwhile, are the major roads that follow the generic socialized model, rather than this private one. For example, the stretch of I-35 going through central Austin is notoriously congested; this is because, as a federal interstate, it cannot by law have its existing lanes converted into toll lanes.
Yet despite the clear advantage in quality, efficiency and cost to the public, Texas' private toll roads have grown increasingly shunned. In a poll by the Texas A&M Transportation Institute, toll roads scored as the least popular way to solve Texas' traffic issues. And the internet proliferates with bad press about Texas' toll roads, with much of it surfacing from local papers and blogs.
Scott Beyer owns a media company called The Market Urbanism Report, and is traveling the U.S. to write a book on reviving cities. His Twitter handle is @sbcrosscountry.
We pay massive taxes and the result is poor roads so the gov’t employee gets fat pensions.
The gov’t will NOT lower taxes. The toll road will be another TAX and you can bet some of that money will be siphoned into insiders pockets.
That’s all this amounts to.
It’s your wallet folks. If you like paying gas taxes and tolls too, then you should be happy as pigs in slop.
The Bangles opened the Sam Houston Tollway with a concert way back in the 80's.
Tollbooths were supposed to come down once the road was paid for. They're still there and with fare increases.
Forbes is part of the open borders cabal.
I loathe all of these public-private deals, whether it is selling off our existing highways, farming out traffic ticket revenue schemes, selling public streets, handing over the reigns (and revenue) from our parks and convention centers, it is all globalist sweetheart cronyism. Feh.
The one thing Dallas did in the 70s was to take all of the major roads going north and south and turn them into six lanes with a boulevard in the middle. That has done a lot to alleviate traffic congestion across the city.
The only road taxes you pay are gas tax AND tolls.
Roads are a necessity of life and commerce and they need to be paid for, both in terms of actual construction and routine maintenance. Taxing those who use them seems like a reasonable approach to me.
The tolls in Houston are certainly not majority under $1.
Yep. Taxpayers are merely blood bags for the parasites to feed upon.
Robert Eckels(R) said he didn’t have to obey that because that was promised before he was in charge.
We used to have lighter taxes and at the same time the best roads in the nation. Forty years ago, all that changed. Roads are crap. Property appraisal values are out of control. Property taxes are raised 10% every year resulting in ours going from 2 weeks of income to a whopping 3 and a half MONTHS of income. Our paycheck has never kept up with the taxes. Sales tax has gone from 5 cents to 8.25 cents.
No one wants to pay for roads they've already paid for. It doesn't matter if it takes an extra 3 minutes, I refuse to travel on the new toll road through Austin. Well, I avoid Austin like the plague it is.
You never pay tolls or gas taxes.
If you’re paying a toll, you’re paying both.
Your comment that you only pay gas taxes or tolls was not accurate.
The same was said of the Golden Gate Bridge. That's one reason why I'd rather pay for roads out of my taxes than stop every 10 miles to pay cash or slow down to 5 mph to have my window sensor scanned.
Amen to that! Toll roads will be just another revenue stream for the government. They aren’t there to lower our taxes or provide more value. They are there to fill government coffers.
And guess who’s lobbying for the public-private high speed rail?
They’ll tell you that is privately funded but look at their plans to use public funds to bring it downtown.
I remember the Dallas toll roads 50 years ago. They must have been paid for ten times over - at the very least.
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