DALLAS -- Oklahoma will finance six turnpike expansion projects expected to cost almost $900 million with toll revenue bonds, Gov. Mary Fallin said last week in announcing the "Driving Forward" plan.
"One of our basic building blocks of a strong economy is having good, quality infrastructure, roads, and bridges," she said. "Making these investments today will prevent our state from having to respond to a crisis in the future."
The $892 million cost of the projects will be financed with the proceeds of revenue bonds issued by the Oklahoma Turnpike Authority, rather than by state tax revenues, Fallin said. The OTA operates the 10-segment, 600-mile system of toll roads.
"This will not affect appropriated funds that will go to other important needs in the state of Oklahoma," Fallin said. "If we don't start planning, we're going to have a major crisis on our hands when it comes to transportation. Businesses could choose not to locate to Oklahoma if we don't address this issue early on."
OTA Director Tim Stewart said the projects will help meet immediate needs as well as accommodate expected increases in population and economic activity.
"I know there might be some who would like for us to wait, or just do a little at a time, but the need is now and will become stronger in the future to make our system safer and easier for our customers," Stewart said.
OTA has $1.2 billion of outstanding debt rated Aa3 by Moody's Investors Service and AA-minus by Fitch and Standard & Poor's.
Synthetically fixed variable-rate debt held by swap counterparties Goldman Sachs and JP Morgan Chase Bank account for approximately 30% of the outstanding turnpike revenue bonds. Variable rate debt accounted for 55% of OTA's outstanding bonds in 2011.
OTA does not need legislative approval to raise tolls to support new bonds, although the Oklahoma State Bond Advisor must review all debt issued by state agencies.
The new debt will probably require an increase in tolls of no more than 15% by 2018, said Oklahoma Transportation Department Secretary Gary Ridley.
Almost 40% of Oklahoma's toll road revenues come from out-of-state motorists, Ridley said.
Tolls currently range from 65 cents on the Chickasaw Turnpike to as much as $6.45 on the 86-mile Turner Turnpike between Oklahoma City and Tulsa, depending on the time of travel.
System-wide toll revenues totaled $246.1 million in 2014, up 5.7% from 2013. Collections in the first two months of 2015 were up 4.9% from a year earlier, according to the OTA.
The upgraded turnpikes could boost the creation of tax increment financing districts along the road corridors, he said.
"We don't want to stifle growth," Ridley said. "We want to encourage it."
A new 21-mile stretch of turnpike expected to cost $300 million will connect Interstate 40 to the Turner Turnpike in eastern Oklahoma City near Tinker Air Force Base.
Another $300 million project will widen a four-lane segment of the turnpike near Tulsa to six lanes and add lighting along the segment.
Planning and engineering work on all six projects is under way, with construction set to begin in late 2016. The work is expected to take about three and a half years.
