Texas' Toll Roads: A Big Step Towards Open Markets For Transportation

Forbes ^ | June 30, 2017 | Scott Beyer

[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. And—shenanigans from the governor's office notwithstanding—their 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 sector—which encompasses contractors and investors, often from overseas—brought 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 fails—such as one stretch did along a rural portion between San Antonio and Austin—it 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 nation’s 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, they’ve 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.

[DoughtyOne]

Federal government grants to states for road projects: LINK

[DoughtyOne]

Yes, please keep peddling the idea Conservatives advocate for higher taxation/tolls.

LOL

[TexasGunLover]

Use taxes are not the same as income taxes.

[TexasGunLover]

Yes, please keep peddling the idea Conservatives advocate for higher taxation/tolls.

I'm not peddling that. Conservatives like the idea of people paying for what they use, and not paying for what someone else uses, therefore, gas and tolls are use taxes, and what conservatives want.

[DoughtyOne]

Driving is a privilege and not a right.

This is Leftist tripe of the highest order.

You are guaranteed the freedom of association. Just how do you facilitate meeting with people without a vehicle?

Is gun ownership a privilege?

Is free speech a privilege?

Traveling by our vehicles is a right, that can be limited or taken away. It is not a privilege.

The state cannot deny you the right to drive, if you prove you can drive safely, know, and abide by the rules.

Everyone once in a while folks come up with this idiotic idea. It's not true.

[DoughtyOne]

They are taxes.

You have already paid taxes to build roads.

If you want to continue to spout nonsense, do it to someone else.

[TexasGunLover]

You have already paid taxes to build roads.

Not for toll roads you haven't. They're paid for by private companies against agreements to collect tolls.

If you want to continue to spout socialist ideas of paying for everyone, do it to someone else.

[DoughtyOne]

My goodness.

I pay gas taxes. You pay gas taxes. Those gas taxes pay for the roads. Do you realize only people who buy gasoline and drive on the highway, pay gas taxes?

They are a use tax, paid at the pump.

What I have been trying to explain to you for the last hour or more, is that they are being diverted. Meanwhile, you have proposed a number of excuses why it’s okay for them to divert those use taxes so we have to pay another use tax.

And then you claim this is bedrock Conservatism. Ah NO!

[TexasGunLover]

You are guaranteed the freedom of association. Just how do you facilitate meeting with people without a vehicle?

How did they prior to the automobile? Please reference the dictionary entry or court cases that establish association as being necessitated by an automobile.

Is gun ownership a privilege?

No, it is a right specifically called out in the 2nd amendment. Please reference the driving amendment.

Is free speech a privilege?

No, it is a right specifically called out in the 1st amendment. Please reference the driving amendment.

Traveling by our vehicles is a right, that can be limited or taken away. It is not a privilege. The state cannot deny you the right to drive, if you prove you can drive safely, know, and abide by the rules.

Driving is not a constitutional right. You get your drivers license based on the skills you have and the rules you agree to follow. After you get your driving license you must continue to demonstrate your ability to drive safely on the road.

[TexasGunLover]

Gas taxes do not pay for toll roads in Texas.

[DoughtyOne]

Wow, you just don’t want to accept reality do you.

Gasoline taxes are a use tax. Only people who use roads pay the taxes.

You paid the gasoline use tax. They refused to build your road.

They now require you to pay a toll (another use tax) to use the road.

Of course you’re right. The gasoline use taxes you paid were not used to build the toll road.

You still paid them.

What part of that escapes you. You are paying a second time when you pay tolls.

[TribalPrincess2U]

Yep, once they taste that money, they’re not going to let go.

[TexasGunLover]

What part of that escapes you. You are paying a second time when you pay tolls.

I agree Gas Tax is a use tax, I'm the one that stated that. I also said that yes, when you drive on a road, that is built with private funds, yes the gas you use is taxed even though you're paying for the road via toll.

The part that is escaping you is that the gas tax funds pay for some roads, and the toll roads are built in addition to what the gas tax roads can build. Therefore, you pay a premium to access a road that would otherwise not exist.

Take a look at how massively you'd have to raise the gas tax to pay for the roads in the metro areas. I'd also support that, if that's what you're proposing.

[DoughtyOne]

You are guaranteed the freedom of association. Just how do you facilitate meeting with people without a vehicle?

How did they prior to the automobile? Please reference the dictionary entry or court cases that establish association as being necessitated by an automobile.

So it's your take that modern convenience could be denied to say, Conservatives, or Catholics on a whim?  My my...  You do live in one warped little world don't you.

First you suggest we can all ride horse and buggies.  Now you're demanding a dictionary (of all things), or a court case ruling to back up people's rights to use roads.

Well, how did they do it before the automobile?  Dang.  You sure have a strange way of loolking at freedoms.

Is gun ownership a privilege?

No, it is a right specifically called out in the 2nd amendment. Please reference the driving amendment.

I told you we were guaranteed freedom of association.  We are not limited to the associations we can accomplish only within walking distance.  Work, meetings, political gatherings, religious gatherings, are all covered in this freedom of association.  A state cannot simply say, "You're black, you can't drive a car.", "You're a Catholic, you can't drive a car.", "You're a Republican, you can't drive a car."  You didn't know this?  Really?  I have to prove this to you?

Is free speech a privilege?

No, it is a right specifically called out in the 1st amendment. Please reference the driving amendment.

See above.

Traveling by our vehicles is a right, that can be limited or taken away. It is not a privilege. The state cannot deny you the right to drive, if you prove you can drive safely, know, and abide by the rules.

Driving is not a constitutional right. You get your drivers license based on the skills you have and the rules you agree to follow. After you get your driving license you must continue to demonstrate your ability to drive safely on the road.

Driving is a Constitutional right.  See above.

[TexasGunLover]

Driving is a Constitutional right. See above.

Sadly, you can't join automobiles to freedom of association. Try and exercise your "right" without being granted the privilege and you'll find yourself in jail.

[DoughtyOne]

LOL

States file grant requests for many projects, roads, civic centers, stadiums...

You don’t think federal dollars wind up in downtown street projects?

We would not have to raise gas taxes to cover what we’ve always covered, before gas tax funds started being diverted en mass.

[DoughtyOne]

Are you too childlike to be able to grasp a state cannot deny a group of people the right to drive based on race, sex, or reasoned affiliation?

Evidently so.

Driving, free association, the ability to travel is a right.

Making rules and requirements does not mean you do not have a right. It simply means for safety sake, you need to have some level of ability and knowledge.

Your gun rights can be taken away if you break certain laws.

Who knew?

[DoughtyOne]

That was just moronic.

[Snickering Hound]

Driving, free association, the ability to travel is a right.

Driving is considered a privilege, not a right. Lots of court cases have established that.

[deport]

This is a little dated but it gives a showing of how the taxes vary across the US.
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