The Original Three Sections of the Sam Houston Tollway Pay for Themselves Every 3 Years
This week we have another excellent analytical guest post from Oscar Slotboom:
In the recent legislative session Representative Shaheen, representing the North Dallas suburbs, introduced a bill to end perpetual tolling. The bill required that a tollway becomes a freeway after all construction costs are paid, with the facility transferred to either TxDOT or the county for free operation.
The bill didn't make it out of committee, but it did remind me that I and hundreds of thousands of toll payers are victims of the most flagrant instance of perpetual tolling in Texas: the original three sections of the Sam Houston Tollway.
Construction cost with interest: around $978 million
The approval of the Harris Country Tollway Authority (HCTRA) by voters in 1983 with $900 million bond funding authorized the construction of the original three sections of the Sam Houston Tollway and the Hardy Toll Road. Section 1 from US 59 (Southwest Freeway) to I-10 (Katy Freeway) opened in June 1988, section 2 from I-10 to US 290 opened in June 1989 and section 3 from US 290 to I-45 (North Freeway) opened in July 1990. One lane in each direction was added in the early 2000s.
| Original cost, 1980s, millions* | $420 |
| Interest, estimated 5% for 30 years | $400 |
| Widening, early 2000s** | 81.1 |
| Interest, estimated 5% for 30 years | 77.2 |
| Estimated Total Cost | $978 million |
*Press report **HCTRA document
Three-year revenue: $1.04 billion
Looking at the three most recent HCTRA financial statements for 12-month periods (there was a transitional 7-month fiscal year in 2022), these three sections of the Sam Houston Tollway generated $1.038 billion in revenue.
| 2021 (millions) | $351.45 |
| 2023 | $342.39 |
| 2024 | $344.25 |
| Total Revuene | $1.038 billion |
HCTRA data for the original three sections is available back to 2001. Since 2001, these three sections have generated $5.95 billion in revenue, which is $7.97 billion in today's dollars.
Of course, there are operation and maintenance expenses. If this expense is $10 million per year, it is only 3% of annual revenue. Other improvement costs were also incurred, such as connection ramps to the SH 249 Tomball Parkway and Westpark Tollway, ramp modifications, toll plaza modifications and miscellanous work like lighting. This HCTRA document shows they are all small costs over the last 25 years, adding up to less than one year of current toll revenue.
A previous blog post reported on the huge diversions of toll revenue to the Harris County budget, which has amounted to $1.486 billion in the last 5 annual reports, averaging $297 million per year.
With tolls in place 35 to 37 years, high toll rates and heavy traffic, the typical toll payer on the original three sections of the Sam Houston Tollway is surely thinking that the toll road paid for its construction cost long ago. Yes, this is correct. Now the tolls are being used to finance diversions of toll revenue to Harris County.
Should tolling at high rates continue perpetually?
If you are a toll payer, the answer is almost surely no. If you are a government official distributing "surplus" toll money or an entity receiving the money from toll payers, you surely want tolling to continue.
Of course, work-from-home employees can avoid tolls. These workers are usually higher-paid professionals. Lower paid service workers don't have the option to work from home, such as those working in warehousing, education, health care, construction, industrial and Bush airport operations. These lower-paid folks are paying the price for perpetual tolling on the original three sections of the Sam Houston Tollway.
Labels: governance, government transparency, toll roads
posted by Max Concrete @ 1:01 PM
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