Federal Highways Admin reports on major role for tolls (ADDITIONS)

Federal Highway Administration has released a set of twenty analyses of toll road activity in the US, the most comprehensive effort of documentation of tolling in the US to date. It includes a 'white paper', four databases, three summaries, and a bunch of sorts of the data by different classification criteria, and some miscellaneous tables. Researched and written up by Benjamin Perez and Steve Lockwood of Parsons Brinckerhoff under contract to FHWA, it is a valuable reference. Although published in a P3 section of the FHWA website the survey covers public as well as investor driven projects and indeed a majority of the projects are public sector toll projects.

The survey covers toll projects in the period 1992 to 2008, starting with the federal ISTEA legislation which modified a longstanding opposition to tolls in federal policy. It covers toll projects in planning still, as well as operating ones. 

see http://www.fhwa.dot.gov/PPP/toll_survey.htm

Tolls have funded between a third and a half of new expressway capacity

The white paper "Current Toll Road Activity in the US: A Survey and Analysis" characterizes tolls as currently playing a specialized role on the nation's highways, focused heavily on funding of new roads and on managing congestion (via variable priced express toll lanes or HOT lanes.) In the last decade it says tolls have financed between a third and a half, or between 50 and 75 out of 150 centerline miles per year (80km to 120km out of 240km) of the new expressway standard road built in the US.

Could grow strongly

Based on current projects in construction, design/finance and planning this is expected to increase to about 180 miles/year in the next decade (290km), they say.

Toll revenues at about $8b/yr constitute about 5% of total highway revenues of $165b, but they are being used to support other spending on roads since they are being used to secure bond issues for non-toll roads in a number of states. Bonds are also issued against future highway tax revenues.

Excluding bond issue proceeds we think are wrongly classified as revenues. They are borrowings and therefore just a deferral of raising real revenues. Excluding borrowings the more narrowly defined highway revenues are $147b/yr and on that basis tolls at $8b constitute 5.4% of revenues.

In six states toll revenues exceed $500m/yr - FL, IL, NJ, NY, PA, TX. (CA?).

Several states are making use of tolls as a major funding source for new roads - TX, CA, FL, VA. CO.

The future they say may involve a "significantly greater role for toll roads" based on:

- toll revenues being a relatively secure basis for raising capital

- greater governmental support for tolling

- experience gained in managing toll financing

- federal credit supports

- potential liberalization of restrictions on tolling the interstates (only 8.5%  is currently tolled)

- greater use of investor concessions (P3s)

- the value of pricing in managing congestion

- potential of tolls to provide revenue when tax grants are insufficient

$160b total value

The survey shows that 33 states and territories have advanced toll projects since 1992, involving 235 new projects of which 70 have opened, 165 being in various stages of construction, design, financing and planning. They represent 4511 centerline miles (7260km) or 15,690 lane-miles (25,250 lane-km) of capacity when completed.  They would cost roughly $160b.

Greenfield projects cover about 40% of this at $66b representing 1942 centerline miles (3125km) and 8136 lane-miles (13,094 lane-km) of new capacity. The rest or $94b is apparently lane additions, rebuilds and conversions to toll lanes. At present 117 significant roads, bridges and tunnels  (34 interstate and 83 significant non-interstate facilities) collect tolls located in 36 states and territories covering 5356 centerline miles (8620km).

Ten HOT lane or toll lane facilities are in operation and another 60 are under study, 12 clearly being advanced. Four of the 12 involve networks (CA, MD, TX, VA).

The survey highlights the large amount of potential toll lane work (HOT lanes and express toll lanes). Summing various different categories we get toll lanes as 71 projects, covering 1352 centerline miles (2176km) providing 3551 lane-miles (5715 lane-km) and costing some $51b.

This is about a third of total toll facilities by cost and centerline length and about 23% by lane-miles/km. California leads the way because of major proposals for HOT lanes in the Bay Area, Los Angeles and San Diego.

Only about a quarter of the toll projects initiated since 1992 by cost ($40b of $161b) and lane-miles (3.9k of 15.7k) is actually open.

Another 11% of cost ($17.8b) and lane-miles (1734) is in construction.

Toll projects in design/finance and therefore close to construction constitute another 12% ($19.4b) by cost and lane miles (1887).

Toll projects in environmental review (NEPA process) before design and financing are 14% of cost ($23.3b) and lane miles (2266).

A lot of this activity is just "in Planning" - 72 projects covering 38% of the cost ($60.5b) and lane miles (5900). Planning is a term that covers a wide range of activities from serious to frivolous and projects with likelihoods of being implemented that range between improbable and likely. None are certain.

We've done a separate critique: http://www.tollroadsnews.com/node/3951

TOLLROADSnews 2009-01-19 ADDITION 2009-01-20 23:30