DALLAS – Texas would need $38 billion to pay off the principal and interest on all the outstanding toll revenue bonds in the state, according to estimates from the Texas Department of Transportation.
While nobody in the Texas Legislature would suggest such drastic action, the first inventory of toll roads is a starting point for future discussions about how to reduce tolling, said Rep. Joe Pickett, D-El Paso, chairman of the House Transportation Committee.
"I really don't believe that the final dollar amount that it would take to end all toll roads is feasible in the immediate future, certainly not in the next session," Pickett told a meeting of the Transportation Committee March 30. "But I did want the discussion so regions can talk about how much debt the regions have and what their plans are."
Pickett authored House Bill 2612 in the 2015 session that required TxDOT to identify all of the toll roads in the state and the amount of debt backing each one.
Written during a wave of anti-toll fervor, the bill was designed to give lawmakers a view into the financial structure of the toll roads to see if any could be converted to non-tolled highways.
"I think by next session we should hopefully be able to move forward and say, 'OK, I think some of these could be removed,'" Pickett said.
TxDOT executive director James Bass told the committee that his agency had identified 51 toll roads and five comprehensive development agreements for projects such as managed lanes on existing highways. The tollways were operated under 23 financing systems, he said.
Outstanding principal on the bonds used to build the roads is about $21 billion, Bass said. With interest payments to maturity, the outstanding obligation is about $38 billion, he said.
Deciding to pay off a single toll road is not a simple matter, Bass said, because most toll roads are part of a system, with bonds backed by revenues from the entire system.
"We often think of the projects as a singular roadway but they've been financed as a system," he said. "It would be like a family saying, 'we're going to pay off the mortgage on our living room.' The mortgage is for the whole house."
Further complicating matters are the call dates on numerous series of bonds. That makes calculating the interest to the call dates difficult.
"It would take weeks and weeks" to calculate that number, Bass said.
However, when asked how much it would cost if it were possible to pay off all the bonds at the end of the next fiscal year, Bass estimated that it could be about $30 billion.
Pickett asked Bass to determine the amount of debt service and revenue for the current toll roads to see how those figures match up.
"I have a feeling that there is a big difference between debt service and revenue," Pickett said. "Some of these are generating revenues so that they can do other things. It behooves an entity to continue that debt and roll that over. They are going to have to defend that difference between debt service and revenue."
The state's largest toll road operators are the North Texas Tollway Authority, a regional authority created by the state in the Dallas-Fort Worth area and the Harris County Toll Road Authority, which is operated by the Harris County Commissioners in Houston.
In the Houston area, about $5.6 billion in debt remains across five agencies that control toll or managed lanes, according to the figures. Most of the debt is related to the Harris County Toll Road Authority and the Grand Parkway, the newest segment of which opened last month.
TxDOT estimates that NTTA has about $10.5 billion in debt that will cost $19.5 billion to pay off over time.
In Central Texas, TxDOT operates the Central Texas Turnpike System, which has $3.17 billion of outstanding debt, according to Bass' report.
The system includes State Highway 130, whose southern sections 5 and 6 are operated by a private entity created by Spanish toll road developer Cintra and San Antonio-based Zachry Construction. The operator last month declared bankruptcy on those two sections, saying traffic levels never reached expectations.
Pickett asked Bass if the state was at any risk of having to assume debt in the bankruptcy.
"There is some misinformation out there that we're ready to take over," Pickett said.
Bass replied that the state bears no risk in the bankruptcy.
"There is no obligation on behalf of the state," Bass said. "If the state elected to, it could buy out those contracts. But it would be a very detailed complicated process."
Under the rules of bankruptcy, the lenders to the State Highway 130 Concession Co. could replace the developer with another company, Bass said. That process occurred in a similar bankruptcy on an Indiana toll road.
TxDOT maintains the northern sections of SH 130, which has seen traffic growing, according to recent reports.
To divert more trucks to SH 130 from Interstate 35, Texas lawmakers approved a discount for trucks on Austin area toll roads. But Bass said a study has shown that about 80% of the truck traffic on I-35 is local traffic, either delivering or picking up loads.
"While we in the legislature have been wringing our hands over congestion and safety, we have done little to provide immediate relief," said state Rep. Celia Israel. Funding a program to reduce the tolls on the TxDOT portions of SH130 and SH 45 SE for truck traffic represents a concrete action to improve congestion without actually requiring more concrete."
Another Austin toll road operator, the Central Texas Regional Mobility Authority, ranked third in a recent study for fastest growth among toll roads with a 23.4% increase last year. The study, conducted by the International Bridge, Tunnel and Turnpike Association, found that toll road usage increased 7% nationally.
