Maryland officials see very slow recovery in traffic - debt service will drive big toll hikes

Maryland officials say recovery in traffic at the state's existing toll facilities will be very slow and longer-term growth prospects must be revised downwards too. They say increasing costs dominated by debt service expense will likely call for major hikes in tolls - from about $2.60 now to $3.60 in 2012 and to $4.50 in 2014 (average statewide toll on existing facilities).

The dour outlook is detailed in the state budget office or Department of Legislative Services (MdDLS) 2010 budget commentary on the Maryland (Toll) Transportation Authority (MdTA).

48 pages are devoted to the analysis which was apparently prepared in collaboration with MdTA finance staff, although the report says MdTA did not suggest any specific toll increase scenarios they are considering.

State budget office (MdDLS) officials stress the toll increase scenario they present nearby is their own work and designed to illustrate the scale of rate hikes needed, not a plan.

In the MdDLS scenario toll rates at the Baltimore crossings would go from $2 now to $3 in 2011 and $4 in 2013.

Chesapeake Bay Bridge tolls would go from $2.50 to $4 in 2011 and to $5 in 2013.

I-95 tolls (northbound near the Delaware border) would rise from $5 to $6 in 2011.

Smaller local toll facilities - the Nice bridge over the Potomac in southern Maryland and the US40 bridge over the Susquehanna R near Delaware would have similar increases.

Commuter discounts criticized, ET discounts needed

The MdDLS report is critical of the scale of MdTA's huge commuter discounts - 80% at I-95, Baltimore crossings and 60% at the Bay Bridge. It says rating agencies cite MdTA's "generous commuter discount(s)" as a risk to the authority's finances.

At the same time the report suggests some electronic toll (ET) discount on cash payments to increase uptake of E-ZPass transponders.

Financial forecasts provided by MdTA are for toll revenues to go from $308m this year to $314m in 2011. Big toll rate hikes would lift revenues to $432m in 2012 and to $545m in 2014. With this year as 100, that's 102 in 2011, 140 in 2012, and 177 in 2014.

Operating costs are expected to rise from $217m this year to $294m in 2014, or 35%. Debt service is the big growth area projected to go from $35m this year to $144m in 2014, a 4.1-fold increase.

Major new facilities

MdTA has two major new toll facilities coming on line for which it has been borrowing heavily - the Inter County Connector toll road across Montgomery County in the northern part of the Washington DC metro area and I-95 toll lanes north of the Baltimore harbor tunnels.

The MdDLS report says toll transactions declined 1.9% FY2009/FY2008 and a further decline of 2.9% is expected FY2010/FY2009.

Without giving any numbers they say: "Over the six-year forecast, toll revenues were adjusted downward to account for the prolonged economic recession and the expectation of a slow recovery."

They add:

"The effect of the downturn in toll transactions has a lasting effect on MdTA’s financial forecast. The long term growth rate for toll transactions after the recovery is estimated at 1.0%/year, much lower than the growth rate of 2.9% from 1995 to 2002.

"It will take several years for toll transactions to return to levels seen in fiscal 2009 and nearly a decade before toll transactions for existing facilities reach the high point of 120.1 million toll transactions seen in fiscal 2007.

"The risks that remain for toll transactions is when economic recovery will occur and whether individuals’ driving habits have fundamentally changed as a result of the recession and high gas prices.

BACKGROUND:

MdTA's existing toll facilities:

John F. Kennedy Memorial Highway (I-95): 80km, 50-mile section of I-95 from the north of the Baltimore City/County line to the Delaware state line, once a fully closed toll systems tolls are now collected only in the northbound direction at the 12-lane toll plaza located up toward the Delaware line one mile north of the bridge over the Susquehanna River.

Thomas J. Hatem Memorial Bridge (US 40) - the oldest of the Authority's facilities, a four-lane bridge opened in August 1940. It spans the Susquehanna River on US 40 between Havre de Grace and Perryville in northeast Maryland.

Fort McHenry Tunnel (I-95) claimed as the world's widest, underwater-vehicular tunnel - four tubes of 2 lanes each the Fort McHenry Tunnel opened to traffic in November 1985. It connects the Locust Point and Canton areas of Baltimore, crossing under the Patapsco River estuary just south of Fort McHenry where the newly independent nation defied the Royal Navy and inspired the words of the national anthem "O say can you see, by the dawns early light, a large red, white and blue banner, Whose broad stripes and bright stars . . . were so gallantly streaming!

Baltimore Harbor Tunnel (I-895): the 2.3km 1.4-mile, four-lane tunnel handled its first vehicles in November 1957 and is part of a 20-mile system of approach roadways and ramps. Designated I-895, the facility connects major north/south highways and many arterial routes in Baltimore City's industrial sections.

Francis Scott Key Bridge (I-695): This outer crossing of the Baltimore harbor opened in March 1977 as the final the Baltimore Beltway I-695. Including the bridge and connecting roadways, the project is 18km 10.9 miles in length.

Chesapeake Bay Bridge (US50/301) this 7km 4.3-mile facility crosses the Chesapeake Bay with 2 lane and 3 lane spans providing a direct connection between recreational and ocean regions on Maryland's Eastern Shore and the metropolitan areas of Baltimore, Annapolis and Washington DC.

Nice Bridge (US 301) opened in December 1940, this bridge is 2.7km 1.7 miles long across the Potomac River estuary from Newburg MD, to Dahlgren VA.

New toll projects in Maryland:

Inter County Connector (ICC), a 30.3km 18.8 mile east-west toll expressway of 3+3 lanes from I-270 at the short I-370 spur in Gaithersburg east to I-95/US1 near Laurel. Despite its name it is mostly in Montgomery County. It will be all-electronic toll (AET) road and have eight interchanges.  Project cost is $2.57b.

Congestion pricing, or higher tolls in peakhours, will be used to manage traffic. This will be the first tollroad in the norteast and mid-Atlantic region to have AET - cashless tolling.

Construction is going hot and heavy on the western portion I-270 to MD97 and this is due to open to traffic late this year. MD-97 to I-95 is under construction also but is not as advanced and is due to open late 2012.

Originally a good stretch of I-95 was due to get new collector-distributor lanes on either side of the ICC interchange as part of the ICC project, but this part o the project has been indefinitely deferred.

Going slow - and possibly for the ax - is a final stretch of the ICC from I-95 to US1. Ideally the highway would be extended both directions in the future - westward and over the Potomac to VA28, and east and south to the Baltimore Washington Parkway and US50 in Prince Georges County.

http://www.iccproject.com/

I-95 Express Toll Lanes (I-95ETLs) - 2+2 new lanes in the middle of I-95 from north of the Baltimore Harbor Tunnels where I-895 and I-95 join to provide 12 lanes for 12.9km (8 miles) to White Marsh. The most complex part of the project is a total rebuild of the I-95/I-695 Baltimore Beltway Interchange into a modern 4-level direct connector highspeed junction.

Previously it was a fascinating mainlines-flip interchange with British style driving on the left both mainlines and lefthand ramps for direct connectors all on just two levels - see nearby. Many think it should have been preserved as a historic monument to celebrate innovative roadway designs!

MdDLS reports serious trouble with the I-95ETLs project - an increase in cost from $811m in 2006 to over $1.5b in 2009. This led to reductions in the scope of the project and a new estimated project cost this year of $994m.

As a result of this turmoil, they say, completion has been pushed back from 2012 to 2016.

On the I-95ETLs but it doesn't breathe a word about the small matter of a cost escalation of 85% or the trimming of 66% or for that matter the four year delay:

http://www.i-95expresstolllanes.com/

MdDLS report: http://www.tollroadsnews.com/sites/default/files/LegislAnalysts.pdf

TOLLROADSnews 2010-03-07 ADDITION 2010-03-08 18:00