BIKE: Cold Hard Slap Of Reality On Toll Roads

[Roger Baker]

[OK, I'm good for a round or two. -- R]


On Feb 24, 2005, at 8:29 AM, Mike Dahmus wrote:

> Roger uses US 183A as his example of a road which won't make its  
> revenue targets.
>
> Folks, was I not clear? The previous 3 toll roads (including US 183A)  
> are the ones to worry about, not the most recent batch. From my  
> original post:

[What does it say about the current planning process, if TxDOT has  
already started building risky roads, using billions in borrowed money,  
in a way that affects our credit rating on Wall Street, notwithstanding  
some no-responsibility clause the road lobby got passed in the Texas  
Legislature?

Does that encourage you to keep digging your hole deeper -- or to pause  
and question what the hell you're doing?

The reason that SOME of the proposed roads in the toll road plan would  
pay off -- is because some like central city US 183 are  heavily  
traveled free roads or in other cases a short section like the "toll  
bridge" (calculated to toll Circle C area travel).

The whole idea on the part of the road lobby was that we tax existing  
residents, especially commuter travel, to get the revenue stream to  
borrow money to build other heavily subsidized roads that benefit the  
special interests like US 183A.

But they didn't count on the amount of united political opposition  
coming from the suburbs, because of what is in effect a new commuting  
tax calculated to finance a bunch of special interests and land  
speculators. The real estate deals were cut back in the boom days when  
it was thought that the suburbs would not mind being fleeced through  
tolls, but things have changed.

Sooner or later, I think even Mike Dahmus might be tempted to ask about  
the cost to the city of Austin in accommodating CAMPO's  
toll-road-conducive planning process.

I'll repeat my important point: The new CAMPO plan will cause central  
city congestion to be far worse in 2030 than it is now, even if we  
build ALL the toll roads in the plan AND do all the rest of the $22  
billion envisioned to be spend on all the many city-responsibility road  
widenings and transit and bike stuff too. In other words the whole  
thing is an unworkable boom town sprawl fantasy, and that is why the  
mostly suburban-land-interest dominated CAMPO board voted down  
Couuncilman McCracken's call for an independent investigation nearly  2  
to 1. -- R]


>
> "Ironically, the three 'old' toll roads (US 183A, SH 45N, and SH 130)  
> which supposedly are in much better shape are the three LEAST LIKELY  
> to generate enough cars to pay off the bonds -- especially SH 130. (SH  
> 45N probably will; US 183A MIGHT but might not, I doubt SH 130 ever  
> will)."
>
> Again, simple and summarized:
>
> 1. All of the recent toll roads would have been built as free roads, a  
> few years later. There is no way that the current or near-future  
> political reality would allow them to simply not be built.

[That is nonsense. To say that all the sprawl-helper toll roads  
envisioned would get built anyway is indeed TxDOT's party line, but it  
lacks any plausible basis so far as I know. The facts are mostly on the  
other side.

First of all, your theory is that the land-developer generated and  
CAMPO-approved growth projections that TxDOT planned would be postponed  
and then be pulled off the shelf and restarted a decade or more in the  
future, no matter what happens.

But we are close to a peak in world oil production, and even now oil  
import costs are seriously threatening the dollar. I'll append a Forbes  
Magazine article at the bottom of this post, admitting the deep  
seriousness of our oil addiction problem. Plus here is a Morgan Stanley  
oil analysis link candidly admitting that the whole world is now at  
maximum oil production capacity:

<http://www.morganstanley.com/GEFdata/digests/20050221-mon.html>

TxDOT couldn't plan its way out of a paper bag. It was TxDOT's  
mismanagement of their road budgeting and planning that got us into  
this deficit financing mess so they are pressuring the public to borrow  
the money to keep building roads to serve sprawl growth. It now turns  
out that SH 130 toll road could put more cars on IH 35 than it takes  
off, even though it was sold to the public as a bypass for IH 35.]


>
> 2. Given the fact that they will be built, it is better for central  
> Austin that they be built as toll roads than as free roads. Less  
> subsidy to suburban sprawl and more direct user payments.

[Until you are willing to read the new CAMPO 2030 plan (page 183), you  
won't see that the central city is proposed to spend about $2.5 billion  
on road widenings to match the toll road traffic projections of future  
commuters criss-crossing the city. And you also won't know that Austin  
is proposed to hold a $400 road bond election next year to start paying  
for all the widenings (page G-7). There goes all our hopes for spending  
Austin taxpayer money on restoring library service and park maintenance  
and silly frills like that.]


>
> 3. There is enough traffic TODAY on the roads in the "new batch" (the  
> ones making all the stink) to pay the bills. Anybody who would choose  
> to disbelieve this is invited to call me, and I'll drive you out to US  
> 290 during rush hour, or to US 183 east.

[Sure you can make money off of taxing existing roads; that is exactly  
what TxDOT has in mind, as I pointed out above -- along with pointing  
out the problems that go along with doing that, and in the context of  
an obviously corrupt political process. It isn't for nothing that the  
road contractors have given Rick Perry over a million dollars since  
he's been governor.]

>
> The only thing you can do by aligning yourself with Roger in his  
> quixotic crusade against these roads is to make sure they get built as  
> FREE ROADS.
>
> - MD


                     ***************************************

<http://www.forbes.com/business/2005/01/10/cx_da_0110doomoil.html? 
partner=msn>


The Coming Oil Crisis
Dan Ackman,  01.13.05, 6:00 AM ET

The world economy has gotten fairly comfortable with oil at $45 a  
barrel. But how will it react to paying $100 a barrel three years from  
now? Or $150 in five years?

  That's what the future holds according to Stephen Leeb, president of  
Leeb Capital Management and author of The Oil Factor (Warner Books  
2004). The result, Leeb says, will be double digit inflation--if we're  
lucky. If we're not, it will be a severe depression. We asked Leeb to  
explain the gilding of black gold.

  You say the price of oil will rise much higher than it already has.  
Why?

"The problem we have is that there are 2.3 billion people in Chindia,"  
Leeb says, using shorthand for a combined China and India. "Today,  
China and India use the energy-equivalent of 5.5 barrels of oil per  
person per year, while rich nations use 39. No matter how rosy your  
thinking is as to the global supply of oil, there is no way there is  
going to be enough to satisfy the demands of an extra 2.3 billion  
people coming online."

As China and India become rich nations, the demand for oil could grow  
at 6% per year, compared to 2% recently. Currently, the world has  
almost no excess supply. The planet is operating at anywhere from 95%  
to 99% capacity, Leen says. "There is no margin for error." The only  
way the system can respond is continued price increases.

How bad will it get?

At the end of 1999, oil was trading for around $10 a barrel. Since  
then, it has risen by about 29% per year. Simply extending the trend  
line means that oil will be at $100 a barrel in about three years and  
at $160 in five years, Leeb says. If prices rise the way they have in  
the last year, the resulting levels will be even higher, and that's  
without any major geopolitical crisis in the Persian Gulf or anywhere  
else. "It's not a heroic position," Leeb says. "But I don't know how  
you avoid it."

What will the result be?

We'll see historically high inflation of 11% to 15%, according to Leeb.  
"That's not even so unusual," Leeb says. He notes that the U.S. has had  
bouts of inflation at that level during the two world wars and in the  
1970s at the tail end of Vietnam.

  "We're kind of overdue," he says.

  Economically, the U.S. is already on a kind of war footing, with the  
war on terror, Iraq, massive military spending and a shortage of a key  
commodity, specifically oil.

  "I hope I'm wrong," he says. "I've never wanted to look more like an  
idiot than I do right now. But I don't see it."

When and why will it bottom out?

"I don't see it bottoming out soon," he says. " I think it's a decade-  
or generation-long problem. A depression would stop it. But as long as  
the Federal Reserve keeps real interest rates negative, that can be  
avoided."

  The better outcome may be that "as energy prices continue to rise,  
we'll organize a worldwide effort to develop alternative energies,"  
Leeb says. "Maybe that will even bring the world together."



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