CHICAGO — Public hearings began Thursday on the Illinois State Toll Highway Authority’s proposed 15-year, $12 billion, partially bond-financed capital program ahead of a possible board vote next week at which one board member will push an alternative.
The authority unveiled the proposal last month as a follow-up to its seven-year-old $6.1 billion congestion relief program — financed in part with $3.6 billion of toll-backed revenue bonding — that is nearing completion. The new program relies on a steep toll increase to help repay an estimated $4.8 billion of borrowing.
The proposal funds construction of new toll roads and projects aimed at keeping 286 miles of roadways that make up the 52-year-old system in good repair through 2026. The agency has promoted the projects as necessary to serve regional transportation needs, spur economic development and create jobs. Officials said the projects would create 120,000 jobs and generate $21 billion in economic activity.
The congestion-relief capital plan relied on higher tolls paid by cash users and commercial traffic. The agency exhausted its borrowing capacity under the current toll structure if it is to maintain a two times debt service coverage ratio considered critical to its double-A level ratings.
The authority’s plan would raise average tolls per toll plaza on all passenger vehicles with electronic transponders to 75 cents from 40 cents. Those revenues — along with a previously approved commercial vehicle increase that takes effect in 2015, and additional tolls from new roads to be constructed — would finance the program and go to repay debt.
Tollway board member Bill Morris, who was appointed by Gov. Pat Quinn in 2009, this week floated an alternative financing structure that reduces the size of the toll hike. “Yes we need to create jobs and yes there are needed tollway projects but we have to be sensitive to the people who live paycheck to paycheck,” said Morris, a retired Chicago-based public finance banker and former financial advisor to the state.
His plan includes the same projects but under a revised timetable he believes can be supported with an average 15 cent toll increase for the first three years of the program with rates reviewed every three years by the authority board.
The scaled-back hike would generate an estimated $100 million annually in additional revenues and cover prioritized projects under Morris’ alternative. The authority hike would generate $250 million annually. He also proposed implementing congestion pricing at peak times for motorists as the agency now does for trucks and believes it should seek legislative approval to extend final bond maturities to 35 years from the current limit of 25.
Morris wants the authority to consider a higher toll structure for new roads to bear the burden of construction costs and to create special taxing districts along new tollways with tax revenues generated within a two-mile radius going towards bond repayment.
The authority issued a statement saying it’s open to reviewing alternative proposals but believes Morris’ plan falls $4 billion short. “Put simply, the tollway will not be able to proceed with a capital plan that relies upon undefined and unknowable sources of revenue,” the agency said.
The agency also dislikes Morris’ proposed three-year review of tolls, saying: “A viable capital financing plan requires that the tollway board establish certainty in its toll rate schedule for the duration of the capital plan.
