Winston-Salem NC Journal October 8, 2012

Editorial: Costly study for the bad idea of toll roads is not needed

While prospects for operation of more North Carolina toll roads are rightly dimming, the N.C. Department of Transportation is about to waste another $1.6 million assessing the economic impact of tolls on Interstate 95.

DOT should forget that idea. Paying for the $4.4 billion upgrading of the major north-south route through Eastern North Carolina with tolls won’t work and has very little political support.

North Carolina now has only one toll road, an expressway that skirts around Raleigh to the south. But five other toll projects under DOT development — including I-95 — face enormous hurdles in either the courts or the Republican-dominated General Assembly, according to an assessment by The News and Observer.

The Journal editorial board has repeated its arguments against toll roads many times, but our primary opposition lies in the unfairness of double taxation. When motorists pay tolls on the Triangle Expressway, they are paying their second tax for driving on a state road. First they paid their gas tax, then the toll. Motorists on every other road in the state pay only once.

Maybe nowhere in the state is the idea of double taxation more unfair than on I-95, which cuts through the state’s poorest region. Workers who must use I-95 to get to work would be hit with big tolls, and many of those jobs don’t pay all that well in the first place. DOT has ideas for reducing the tolls on commuters, but those ideas don’t solve the problem.

The unfairness extends to businesses, too. Those in the eastern corridor would have to pay tolls for their deliveries and transports while those in other parts of the state would not. That’s not a recipe for bringing economic development to a wide swath of the state that desperately needs it.

In announcing the study, DOT said it wanted to get a better idea of how tolls would impact business. We can save the state right here with the obvious answer: Tolls would hurt.

DOT should save the $1.6 million and drop this whole notion of toll roads, too.

Published May 13, 2012 in the Fayetteville NC Observer 

Op-Ed re: Don’t Drink The Discount Kool-aid on I-95 Tolls

By Chuck Fager

Uh-oh, I said, when I read that some Fayetteville area leaders are ready to sign on with putting tolls on I-95 -- as long as us locals can get a "discount."

Memo to Commissioner Jimmy Keefe, state Reps. Rick Glazier, Elmer Floyd and other solons: Don't go there! That's like saying, "It'll be okay for Pandora to open her box, just halfway.” Or, “We’ll let the fox into the henhouse, but only halfway . . .”

Bad idea. Very bad idea.

To see why, let's look at some numbers: The initial toll rates are supposed to be $20 each way, border to border. Suppose us locals get a 50 per cent discount; $10 each way.

It sounds better. But that would just be an opener – as in, opening a big can of worms.

The toll plan has a built-in inflation escalator, which would jack up the initial tolls by billions of dollars. In fact, the plan figures to spend about $12 billion on the highway -- but expects to take in at least $30 billion in toll revenue.

Thirty billion. Out of our pockets.

Discount that, folks, if you can.

It's been rightly said that tolls on I-95 will amount to a heavy tax on the citizens of the I-95 corridor. The planners just don't want to call it that.

And why do they plan to take in $30 billion if the road work will “only” cost $12 billion?

Here's where it gets very interesting. Because a search for answers led me to study what's happened to other toll roads. And the answer that popped up again and again was simple, and shocking:

The toll roads get sold off, usually to foreign corporations.

That's where all that extra toll (tax) revenue will most likely go: to some overseas companies' bottom line.

Think I'm kidding? Check out the Indiana Turnpike (part of Interstate 90): it was sold in 2005 to a joint venture from Australia and Spain. Or the South Bay Expressway in San Diego; same deal.

It was easy enough to do. After all, putting tolls on a freeway “monetizes” the road. That means it can be bought and sold, just like your mortgage.

Did somebody say "mortgage"? Wasn't there a lot of trouble about bad mortgages recently?

Funny thing: the foreign companies “bought” these US roads with borrowed money -- that is, mortgages. But then the Southwest Expressway in San Diego went bust. And the Indiana Turnpike’s new owners are teetering on the edge. Lots of other toll road deals have had to be, um, “renegotiated” to avoid bankruptcy.

But who's on the hook if such a deal goes sour? Repeat after me: we are. Carolina taxpayers.

How do these fiascoes happen?

The basics are simple: the promoters claimed to know the future. But in fact, they didn’t. Their crystal balls were a dud.

The road planners and corporations all figured American drivers would never stop crowding their lanes and dropping ever more dollars into their toll boxes.

Didn’t happen. Traffic – and toll revenue – went down, not up. The companies raised tolls repeatedly, to cover the shortfall. Didn’t work.

Looking back, it seems obvious: when the crash threw millions out of work, they quit commuting. Then $4 gas made lots of us cut back on car trips; and lots more drivers, royally ticked off by ever-rising tolls, stayed off those roads entirely. Ah, 20-20 hindsight.

But that’s all over, right? Tomorrow is another day, right? And NCDOT is confident their new crystal balls are way better.

Well, maybe they can’t tell us if it will rain tomorrow. But they’re confident they know what traffic on I-95 will be, twenty, even thirty years from now.

Really? There’s some very colorful Sandhills slang for such ideas. I’ll stick with one from my Yankee mother: malarkey.

And add an anguished appeal to our local politicos: Glazier, Keefe, Meredith, Floyd, and all the others, from both parties (I’m looking at you, Senators Hagan and Burr):

Please. Put down that cup of discount Kool-aid, now. Next, step away from that I-95 tolls can of worms. Shove it back on the shelf. Way back.

And then tell NCDOT to go back too: back to the drawing boards. Don’t let them turn Interstate 95, our lifeline, into the road to disaster.

Pandora, shut that box, before it’s too late!

http://zope.fayobserver.com/article_archive?year=2012&id=1376169&q=Chuck,Fager