BIKE: Toll roads as national policy?

[alan_drake]

I see a flaw in Mr. Baker's skepticism.  He assume massive behavior change sin the face of $5/gallon gas.  I see more modest ones and look to the EU & Japan.

Tolls roads exist there with $4 & $5/gallon gas.  Smaller, more fuel efficient cars and public demand has created good urban rail in many (but NOT all EU nations) as an alternative.

I have heard that 27% of US disposable incoem goes to care & feeding of our autos & SUVs.  Gasoline is a smaller % of the total cost.  Depreciation, Insurance, added housing for it at home, extra costs when oen buys it, taxes, etc. will not change dramatically with still higher gas prices (insurance may even go down).

Now the "safety factor" in toll road bond financing will surely be tested.  Prior experience is that often toll roads with a surplus will subsidize their weaker brethren.  I would feel few qualms in buying a Loop 1 Houston bond for example.

That said, in the face of the collapse of the US $ (perhaps €50 barrel oil will translate into $100/barrel) I can see a stop in new toll raod construction after some point in time.  Capital markest will be in turmoil with much higher 30 year yields.

Increasing long term interest rates by 3% will do more to stop new toll roads that adding $3 to the price of gas IMHO (the #s don't add up any more).  Combined they will be a death knell.

This risk, higher long term interest rates, needs to be added to the CAMPO public comments.

Alan