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Follow TURFDFW: Automatic toll increases here to stay
This is what happens when un-elected boards get control of tax rates - they get pegged to go up AUTOMATICALLY FOREVER unless elected officials stop them. Taxation without representation at its worst!
North Texas Tollway Authority's automatic toll increases appear to be here to stay
Officials on the Regional Transportation Council had urged the NTTA for years to adopt higher toll rates.
By TOM BENNING, Staff Writer
Dallas Morning News
Published: 30 June 2013
The North Texas Tollway Authority’s policy of automatically raising tolls every two years is likely to remain in place, even as several new faces have joined NTTA’s board since the policy was adopted in 2009.
On Monday, toll rates go up 5.9 percent, to 16.2 cents per mile. NTTA says the scheduled hikes provide a dedicated revenue stream, allowing the agency to reassure its creditors.
The automatic hikes will continue every two years unless the board votes to stop them.
The Dallas Morning News sought to survey NTTA’s nine-member board and found little interest in reconsidering the scheduled toll increases. (Six of those board members were appointed since the policy was approved four years ago.)
Five board members declined to comment or didn’t return requests for comment, underscoring the politically sensitive nature of a policy that increases prices without a new vote or public hearing.
George “Tex” Quesada, a 2011 Dallas County appointee, and David Denison, a 2005 Denton County appointee, failed to return repeated telephone calls.
William Elliot, appointed last year by Gov. Rick Perry, said he would let chairman Kenneth Barr speak for the board. Bill Moore, a 2009 Collin County appointee, deferred to NTTA’s staff. Mojy Haddad, appointed just this year from Tarrant County, declined to comment because he’s so new to the board.
Barr, the chairman, said that while he doesn’t “blame people for complaining,” the price hikes ultimately provide a benefit to North Texas drivers.
“Nobody likes rate increases, period,” said Barr, a Tarrant County appointee and former Fort Worth mayor. “So part of what we did with this policy is to say: ‘Here’s the long-range game plan. It’s predictable. It’s reasonable.’ ”
NTTA staff members add that the increases are critical to keep pace with inflation and growth.
The latest increase, from 15.3 cents per mile to 16.2 cents per mile, will mean an extra $47 a year for a commuter who rides 20 miles of toll roads each day. By 2019, the rate will be 19 cents per mile.
NTTA’s board approved the price schedule with an 8-1 vote in 2009.
Officials then and now said the planned increases are an important way to beef up the agency’s budget, particularly in terms of meeting bond obligations and maintaining an A-level credit rating.
The agency owes about $9.4 billion to bondholders, officials said. A good portion of that debt relates to the Sam Rayburn Tollway, a project that included a $3.2 billion payment from NTTA to local governments for the right to collect tolls on the road.
The toll authority has maintained strong credit ratings — and, therefore, pays lower interest rates on its bonds — in part because it has pledged to creditors that revenue will remain at least 1.5 times as high as the payments it makes each year on its senior debt.
Those annual debt payments are projected to grow in coming years, to more than $540 million by 2019, officials said. And scheduled toll increases are slated to bring in more than $722 million that year.
“That gives a sense of confidence that the authority is going to be able to pay its bills and meet the obligations that we’ve made to the people who’ve lent us billions of dollars,” said Michael Nowels, a Denton County board member who voted for the planned increases.
Still the policy has its critics — and not just among North Texas motorists frustrated by higher toll bills.
Texas Sen. Bob Deuell, R-Greenville, said he’s met with NTTA officials to express concern over the scheduled increases and the agency’s heavy reliance on debt.
He made it clear that he’s not down on NTTA and said the toll agency has been forced to do more in part because state lawmakers haven’t properly funded transportation improvements. But he said he feared that the toll hikes would eventually price drivers out of riding the toll system, if it hasn’t already.
Deuell suggested that NTTA instead look to boost revenue by increasing traffic volume, particularly on some of the agency’s new roadways.
“Otherwise, you’re looking at diminishing returns,” he said. “I’ve talked to people who have quit using the toll roads because of the cost.”
NTTA spokesman Michel Rey said the price schedule creates an “incremental, manageable increase for customers.”
Regarding Duell’s suggestion, Rey said: “NTTA cannot, from a financing standpoint, simply rely on additional traffic” because “if that growth didn’t materialize, the trust agreement with bondholders would then mandate an unscheduled rate increase to cover the deficiency.”
Indeed, the planned increases nay actually benefit drivers’ budgets, NTTA officials said, because they ensure that there won’t be a large, unexpected toll hike down the road.
But Bob Day, the lone dissenter on NTTA’s board in 2009, said he still has reservations about the policy. The former Garland mayor — who is no longer on the NTTA board — noted that cities often rely on bonds for financing, yet they don’t have “preset, automatic” tax increases.
“You have to justify it every time,” he said.
Unlike Dallas Area Rapid Transit, which is required by federal law to hold hearings and to vote at least twice on each proposed fare increase, NTTA can set rates as it chooses.
And NTTA’s board is appointed, not elected. So motorists who don’t like the toll hikes have no chance to replace the leaders responsible for authorizing those hikes.
Each of the four counties within NTTA’s service area — Collin, Dallas, Denton and Tarrant — appoints two NTTA board members. The governor appoints the ninth member, from a county adjacent to the service area. Board members serve staggered two-year terms.
Rey, the NTTA spokesman, contended that the increases every two years are “planned” rather than “automatic,” since the board “votes to affirm projected increases whenever they approve the NTTA’s annual budget.”
He added that all NTTA meetings are open to the public, and that board members “invite comment on any issue.” ---- https://www.ntta.org/Pages/default.aspx
Some board members likewise bristled at the “automatic” label, saying they can and will stop the increases if that becomes appropriate.
“If there’s a time when a scheduled increase isn’t necessary, I believe the members of this board understand the responsibilities they have to keep the cost as low as we possibly can,” said Barr, the board chairman.
But that time doesn’t appear to be coming soon.
While Barr and Nowels unhesitatingly endorsed the policy, Matrice Ellis-Kirk, a 2011 Dallas County appointee and the wife of former Dallas Mayor Ron Kirk, said she wasn’t sure if she would support it in the future, but “it’s our policy and that’s what we have to live with.”
Jane Willard, a 2010 Collin County appointee, said the policy gives board members a clearer understanding of future revenue and expenses. And while she, too, said “nothing’s forever,” she said it’s a good setup for now.
“I know the consumer may look at it as ‘They’re just being greedy and trying to make more money,’ ” Willard said. “Well, no.”
The benefit to NTTA and its customers, she added, is: “We know what we’ve got. We know what we’ve got coming.”