BRADENTON, Fla. — A libertarian think tank is disputing the savings that might occur if two high-profile Florida expressway authorities are partially consolidated with the state-run Turnpike Enterprise.
According to the state’s Government Efficiency Task Force, merging the administrative functions of the Orlando-Orange County Expressway Authority and the Tampa-Hillsborough County Expressway Authority with the turnpike would save an estimated $24 million annually.
The estimated savings is more likely around $3.5 million a year, the Reason Foundation said Monday in a 61-page policy study.
The study, ordered by the statewide business lobby Associated Industries of Florida, emerges just four days before a Senate transportation committee is slated to discuss the status of the expressway authorities.
Though a specific bill has not been filed yet, the controversial consolidation issue — similar to one that died during last year’s session — is poised to resurface.
Two major issues are the amount of outstanding debt among the local toll authorities, and finding a new way to increase funding for Florida’s new road projects.
The double-A rated Turnpike Enterprise has $2.81 billion of toll revenue bonds outstanding. The A-rated OOCEA and THCEA have $2.69 billion and $324.5 million of toll debt outstanding, respectively.
Consolidation could “result in a changed business model for the raising of capital for roadway projects and expense planning,” the government’s task force said in its recommendations last fall.
The task force noted that the turnpike sells bonds through the state Division of Bond Finance, which “tends to be more conservative in its approach to bond debt,” and that results in “less debt and quicker repayment of operations and maintenance expenses to the state.”
Toll collections, which differ among the agencies, should also be consolidated under the turnpike for another $22 million a year in savings, the task force said.
The Reason study, authored by Daryl Fleming and Robert Poole, disputed the benefits of consolidation and said there are important differences between the management and operation of urban expressways and inter-city toll roads. “A one-size-fits-all approach to finance, management, and tolling policy would be unwise,” they said.
The authors said local toll authorities can respond better to local needs and priorities, offer more flexible financing, and have “strong incentives” to achieve cost savings through economies of scale. In addition, people know that the toll revenues will remain in their area for transportation improvements, rather than being redistributed to other parts of the state.
“Our review of Florida toll agencies uncovered a number of areas where reforms other than consolidation would bring about important improvements,” the authors said, recommending that OOCEA and THCEA become totally independent from the state.
To do that, the agencies would have to shed themselves of lease-purchase agreements with the Florida Department of Transportation, which require FDOT to maintain and operate locally tolled roads, and accept ownership once bonds are paid off.
At that point, the expressway authorities repay the department’s maintenance and operational costs.
The Reason report said the ownership for toll roads should remain with the expressway authorities so that they can become independent, self-supporting agencies like the Miami-Dade Expressway Authority, which does not have a lease-purchase agreement with FDOT.
The so-called MDX has never been included in recent legislative consolidation efforts largely because it does not have lease-purchase obligations to repay.
The Reason report said little about north Florida’s Mid-Bay Bridge Authority except that FDOT should consider helping it to become a “more mature toll agency.”
The triple-B rated MBBA has $287.1 million of outstanding bonds, and a lease-purchase agreement with FDOT. The Government Efficiency Task Force recommended fully consolidating MBBA with the higher-rated Turnpike Authority.
“This consolidation is estimated to result in immediate savings of $400,000 to $500,000 a year, and produce annual savings of $5 million to $10 million a year if the [Mid-Bay] revenue bonds can be refinanced” by the turnpike, the task force said.