Want to eliminate toll roads in Texas? Go find $40 billion.
James Bass, the Texas Department of Transportation’s executive director, unveiled that sobering figure Wednesday as part of a preliminary report to the Legislature on the state of Texas tollways. Lawmakers, through House Bill 2612, last session had requested a full accounting of what the past decade’s blitz of turnpike construction has wrought.
A full, final report isn’t due until September. But Bass had a rough first draft to share Wednesday with the House Transportation Committee.
Texas, if you count TxDOT and the state’s various local toll authorities, has 51 toll roads and toll bridges either in place or under construction. Those 51 facilities, Bass said, are grouped into 23 financial systems (an important wrinkle and potential obstacle for those who might want to pick and choose roads for removing tolls). In total, those roads and bridges have $21.1 billion in bond debt, Bass reported.
To pay off that principal over time under current financing schedules, with some of those payments coming as far out as 2053, would take $38 billion, Bass said.
How much would it take in a lump sum to pay those off, assuming that could be done? Bass, who until last year was TxDOT’s longtime chief financial officer, said much of that debt carries financial penalties for early payment of the principal. Getting an exact figure, therefore, will take more time, he said. But the agency’s rough estimate is $30 billion.
But that doesn’t count five other toll projects, Bass said, that are operated or are being built by private companies under long-term leases with TxDOT. Those five tollways, including the southern 40 miles of Texas 130 from Mustang Ridge to Seguin, have an additional $9.8 billion in debt.
Add all that up, Bass said, and you’re looking at a total of $40 billion to buy a mostly toll-less Texas.
That doesn’t count the state’s several international bridges over the Rio Grande, which generally carry tolls. But state Rep. Joe Pickett, the El Paso Democrat who chairs the transportation committee, said he had no problem with leaving them off the list.
For now, the study is mostly an exercise in possibilities, spurred by TxDOT’s burgeoning budget (because of new revenue sources created by constitutional amendments passed in 2014 and 2015) and a growing anti-toll sentiment in the Legislature.
Even Pickett, who authored HB 2612, isn’t calling for all tolls to go away. But the legislation, he said, is the first step toward determining which toll roads, if any, can or should be converted to free roads.
“I don’t have a particular agenda,” Pickett said Wednesday. “I wouldn’t necessarily say, ‘No more tolls forever.’”
But he said that in some cases, including at least one tollway in this district, collecting the tolls and paying off debt is costing as much as the road is bringing in, and that some toll lanes are virtually unused except during rush hour. And in the case of Texas 130 and Interstate 35 in Austin, he said, TxDOT needs to determine if its money would be better spent on debt to remove tolls from Texas 130 or expand I-35. Perhaps, he said, a toll-free Texas 130 would draw enough cars off parallel I-35 to be as beneficial as an added lane on the interstate.
The northern part of Texas 130 was built between 2003 and 2007 as part of a four-road Central Texas tollway system that includes Loop 1, Texas 45 North and Texas 45 Southeast. TxDOT used some of its money and local government funds for the $3.5 billion project, but also borrowed on the bond market. With unpaid interest and some refinancing that has occurred, TxDOT’s outstanding debt to bond investors on the whole system is now $3.2 billion.
TxDOT has experimented before with reducing truck tolls on Texas 130 and Texas 45 Southeast, and is about to begin another such trial, with the goal of reducing truck usage of I-35. But Pickett and others have suggested reducing or eliminating tolls for all vehicles on those two roads. Doing so, Bass said, would require a several-step process of refinancing the various roads, and, of course, would mean a massive loss of toll revenue.
But the bottom line, he said last year, is that to pay off all the toll road debt, TxDOT would have to pay about $150 million a year for the next 20 years or more, money that would come out of Central Texas’ share of whatever TxDOT has available to spend on area road expansion and maintenance. That approach would almost certainly end the idea of expanding I-35 with an added toll lane on each side, and, over time, it would likely mean a number of other proposed expansion projects could die for lack of funds.
By the numbers
$40 billion: Estimated cost of paying off all bond debt on 51 toll roads statewide.
$3.2 billion: Principal owed on Loop 1, Texas 45 North, Texas 45 Southeast and the northern part of Texas 130.
$1.65 billion: Principal owed on 183-A, U.S. 290 toll roads.
Source: House Transportation Committee report