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Follow TURFFitch warns driving declines will hurt toll revenues
Yet what is Texas' plan? Tolls, tolls, tolls to 'relieve' congestion. They're referred to as 'managed lanes' added to congested urban corridors. None are toll viable, all need public subsidies and even the public subsidies are running out. So what's Perry and lawmakers' answer? End gas tax diversions and dedicate ALL existing road taxes to roads (like vehicle sales tax that's going to general revenue not roads), which is exactly how much money TxDOT needs to get back to pay-as-you-go? No, it's raid the money going into the Rainy Day Fund so they can keep issuing MORE TOLL ROAD DEBT to subsidize LOSER toll projects and triple tax Texans to drive on our public roads.
PRESS RELEASE
Fitch: U.S. Driving Declines Could Negatively Affect Toll Roads
NEW YORK--(BUSINESS WIRE)--June 03, 2013--
The revenue of some toll roads may come under pressure if the driving decline trend continues for the long run, according to Fitch Ratings. Americans have driven less each year since 2004 and those ages 16 to 34 have reduced their driving more than any other age group.
Toll roads with meaningful un-tolled competition, especially those designed to relieve congestion, could be vulnerable because their value would diminish with slower traffic growth. Expressway system expansions and standalone projects built to meet new growth needs in particular have a greater dependence on the nature of future infrastructure funding development.
We would expect the important corridors for interstate commerce to see small effects. We also expect bridge systems that are essential to cities like San Francisco and New York City to be only marginally affected, given the existing capacity constraints and transportation options.
In our view, these trends could have an impact given the U.S.'s current dependence on the user-fee infrastructure development model. If these reductions persist, greater public subsidies would be required to fund still-needed new projects and provide credit stability.
A study by U.S. Public Interest Research Group called "A New Direction" found that Americans drove more miles nearly every year between the end of World War II and 2004. However, today Americans drive no more miles today than in 2004. The study also showed that people ages 16 to 34 drove 23% fewer miles on average in 2009 than 2001.
The recession and increase in gas prices only partially explain this broad trend. We also believe millenials' quality of life priorities, technology, working from home, and other flexible work options are contributing to this trend.
Acceleration of the trend of populations shifting from suburban to urban areas would further increase its effects. New census estimates show city populations grew and suburban populations shrank for the second straight year in 2012.
All of these trends are in their formative stages and we believe they will require years before their effects will be felt materially. In the meantime, caution remains warranted when future projections are the basis for investment.
Additional information is available on www.fitchratings.com.
The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.