Tolls in Perpetuity

By Terri Hall l June 17, 2011

Texas tolling authorities got their every wish granted under the moniker of ‘local control.’ Two bills recently passed by the Texas Legislature represent a huge policy shift away from traditional turnpikes, where the toll comes off the road when it’s paid for; instead, these bills grant authority to keep tolls in place to fund other projects. HB 1112 introduced by Rep. Larry Phillips allows toll entities, in effect, to toll in perpetuity and use borrowed money to secure more borrowed money — a virtual ‘House of Cards’ – the same multi-leveraging methods that helped cause the subprime mortgage crisis.

It’s like building roads using credit cards, and such risky multi-leveraged debt also means Texans will be tolled in perpetuity by un-elected toll boards (with the exception of El Paso’s tolling authority board), making it one of the most anti-taxpayer bills of the session.

SB 19 introduced by Sen. Robert Nichols, known as the ‘primacy’ bill, gives state toll entities the right of first refusal on all toll projects in its jurisdiction. However, when these state toll entities exercise a right of first refusal, under Nichols’ bill, they also get development rights for ALL future segments of the project, similar to the development rights granted to private corporations with the Trans-Texas Corridor. Of course, this is by design and it’s meant to take the decisions about toll taxation out of the hands of taxpayers and their elected representatives and gives them to un-elected toll authority boards.

SB 19 also grants toll entities ownership of the road in perpetuity. This virtually guarantees tolls will be charged in perpetuity and that these projects will never become non-toll roads. These bills effectively grant a limitless power to tax far into the future to UN-elected toll entities controlled by bureaucrats.

Robin Hood tax grab

Some have dubbed this practice known as ‘system financing’ as a Robin Hood tax grab, since it steals toll revenues from one corridor and pledges it to yet another corridor (that those same users may never use). It can also involve increasing the toll on one segment to gain so-called ‘surplus revenue’ to pledge to another project and so on, making it impossible to ever take tolls off the original road. Plain and simple, this amounts to perpetual ‘highway robbery’, with drivers supporting a political spending habit.

The Texas Constitution currently prohibits perpetuities in Article I, Sec. 26, though Sen. Chris Harris advanced a constitutional amendment, SJR 13 (which died in the Calendars Committee in the House in large part due to the efforts of TURF), to change that.

State toll authorities even got the right to conduct their own environmental studies, which is like the fox guarding the henhouse, ensuring the preferred alternative is always a toll road, not a free road. This runs afoul of the National Environmental Policy Act (NEPA) that requires the study of all reasonable alternatives, both tolled and non-tolled, not mere window dressing of such.

In his November radio address, President Reagan talked about the proposed 1982 highway program saying how important it was to pay-as-you-go utilizing “user fees” collected at the gas pump. “Good tax policy,” he said, “decrees that wherever possible a fee for a service should be assessed against those who directly benefit from that service. Our highways were built largely with such a user fee – the gasoline tax.” Reagan believed in the freedom to travel, “One of our great material blessings is the outstanding network of roads and highways that spreads across this vast continent. Freedom to travel and the romance of the road are vital parts of our heritage, and they helped make America great.” But now that the Texas Legislature has depleted the state’s highway trust fund by raiding it for non-highway purposes, they have found new ways to reach into our pockets and require that we spend more of our own money on what they want, NOT what we choose – way into the future. And, the use of electronic transponders makes it appear painless, until drivers notice how much has automatically come out of their checking accounts each month.

It’s clear that the intent of the Texas governor and legislature is to levy taxes under the guise of ‘local control’ and ‘user fees’ in addition to and far more expensive than the gas tax despite grassroots opposition and despite no-tax pledges. The politicians can call these toll revenues whatever they want; but at the end of the day, they are still a form of taxation, however hidden they may be. With the constitutional ban on perpetuities surviving the legislative onslaught this year, it may be time to challenge the constitutionality of these Texas laws that grant authority to keep tolls in place in perpetuity.



Terri Hall is the founder of Texans Uniting for Reform and Freedom (TURF), which defends against eminent domain abuse and promotes non-toll transportation solutions. She’s a home school mother of eight turned citizen activist. Ms. Hall is also a contributor to

SFPPR News & Analysis.