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Toll Road Projects in Limbo Following Session

Texas' network of tolled highways stretches for more than 500 miles, but its growth was curtailed this session as lawmakers passed several measures that make it tougher for toll projects to move forward.

An advocate for restricting funds for toll-roads in Texas attends a rally March 23rd, 2015

The Texas Legislature began this year’s session with a major case of toll fatigue. After more than a decade of letting local and state planners partially fund large highway projects through toll collections, most lawmakers had little appetite left for such projects. Some talked openly about scrapping many tolls already in place.

Five months later, the state’s vast toll network remains intact, but the prospects for new toll projects have dimmed. In Dallas, Austin and San Antonio, major highway projects originally planned with toll lanes are in limbo as local officials try to work out the path ahead, according to lawmakers and state officials with knowledge of the projects.

“The CDA delivery model has not been killed, but it has been mothballed for now,” said Texas Transportation Commissioner Victor Vandergriff, referring to “comprehensive development agreements,” a common way for local or state entities to partner with private companies to launch a toll project. This session was the first since 2007 during which lawmakers didn’t pass a so-called CDA bill authorizing a list of new toll projects.

Lawmakers also agreed to ask voters to boost spending to the Texas Department of Transportation by billions of dollars, but specified that none of the new funds can go to toll roads. Another bill signed by Gov. Greg Abbott blocks lawmakers from borrowing from the Texas Mobility Fund, a rotating fund set up in 2001 to provide money for state transportation projects that has helped fund toll projects in the past.

Together, the measures choke off state funding for toll projects, and could encourage planners to avoid tolling on highway expansions. But if the state can't help pay for enough free roads to unsnarl Texas traffic, local officials might still decide to borrow private money — and pay higher interest rates — to get toll roads built, warned Brian Cassidy, a managing partner with Locke Lord, a law firm that works with regional mobility authorities.

“There’s less money available that TxDOT controls that will be used for toll roads,” Cassidy said. “That has the potential to make it harder, or more expensive really, to do projects.”

State transportation officials have said for years that they need about $5 billion more annually to keep traffic congestion from getting worse as the population booms. Lawmakers this session gave them a large chunk of what they requested. By 2020, road funding could be up by more than $4 billion a year, mostly by dedicating tax revenue the state already collects to transportation.

Yet TxDOT leaders stressed during the session that the $5 billion estimate came with some fine print; it assumed that the agency could continue to use tolling to complete certain highway projects faster. Without that option, the agency’s annual funding shortfall is closer to $10 billion.

“Basically, if we got $5 billion, then that could be leveraged into $5 billion more,” Vandergriff said.

State Rep. Scott Sanford, R-McKinney, was among several outspoken toll critics who pushed for measures to block or curtail future toll projects. But except for a bill requiring TxDOT to calculate the cost of eliminating all of toll roads the agency helped fund, the most sweeping anti-toll bills failed.

Only recently, Sanford said, did he realize the extent to which legislation that did pass this session could limit toll projects. He pointed to the troubles now facing the Interstate Highway 635/LBJ East project in northeastern Dallas County. On the day the session ended, eight Dallas-area legislators announced formation of the IH-635 East Legislative Caucus, seeking a way to move the project forward now that funding it through toll lanes appears less likely.

“When I left Austin, I felt like the managed toll system wasn’t in any jeopardy,” Sanford said. “Now it looks like the new legislation has a bit more teeth than I thought.”

One member of the new caucus, state Rep. Cindy Burkett, R-Sunnyvale, said the Dallas-Fort Worth area in particular is “toll weary” with several toll lanes having recently opened in the region. Yet congestion is bad enough that local communities aren’t willing to wait the years it will likely take for state officials to find the funds to begin turning over dirt on their own, she said.

“We want to look at some way we can get it done without having to wait for session again,” Burkett said.

One possibility, she said, may be to organize the project around lanes that would be tolled for a limited period, perhaps just long enough to pay off construction debt, a throwback to the way toll roads were handled in Texas decades ago.

“I just think people feel if we have to use any managed lane capacity, it has an end in sight,” Burkett said.

In San Antonio, the largest city in Texas without any toll roads, plans to add toll lanes to U.S. 281 and Interstate 10 appeared all but certain until last week, when local officials sent a letter to TxDOT and local members of the Legislature requesting an extra $268 million in state funds to remove all tolls from the project.

The letter, from Bexar County Judge Nelson Wolff, County Commissioner Kevin Wolff and John Clamp, chairman of the Alamo Regional Mobility Authority, cited the extra transportation funding approved this session as a reason why the county didn’t believe the project should need any tolling.

“In fairness to the citizens of Bexar County, both segments need this funding in order to avoid managed tolled lanes,” the letter reads.

Texas Transportation Commission Chairman Tryon Lewis wrote in a letter back that TxDOT will continue to work with local officials on "possible funding assistance."

In Austin, local and state officials unveiled plans this month to expand the busiest part of Interstate 35 over 10 years, a multibillion-dollar endeavor that would be funded in part through toll lanes. State Sen. Kirk Watson, D-Austin, tried and failed to get the project added as an authorized CDA this session. He said he and others are still working on “the funding puzzle” for clearing up one of the state’s most congested roads. To get the project started sooner, tolling may be unavoidable, he said.

“I would prefer to seeing us do this in the pay-as-you-go fashion, but the problem is the state has been negligent getting to this point and we have a crisis on I-35,” Watson said. Despite the funding increases approved this year, he predicted that many lawmakers won’t realize until the 2017 session how transportation funds remain far short of the state’s needs.

“We have done all the easy stuff now, and we still don’t have enough money,” Watson said. “So we’re going to have to figure out what other tools might be available to us and how we can make them work in conjunction with this additional money.” 

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Transportation 84th Legislative Session Budget Cindy Burkett Texas Department Of Transportation