Toll Roads Help Central Austin, Part IV

The city is talking about amending the agreements with TXDOT about right-of-way participation for some local highways which are now, obviously, being rebranded as toll roads. This applies only to US 183 (east of I-35), US 290W, and SH 71 (east of I-35).

Note carefully the following facts:

  1. The city of Austin was on the hook for tens of millions of dollars for these roads, if they were to be built as freeways. The chance that this money would be extracted from Austin is 100%.
  2. The money for these contributions from the city to the state was authorized by the City Council in past cost-sharing agreements with TXDOT, which would require that bonds be floated like these examples in which voters authorized the city to borrow money for other recent highways.
  3. That borrowed money must be repaid by taxpayers in the form of property taxes, sales taxes, and other sources of revenue (mainly utility kickbacks). There is no contribution from gas taxes to the City of Austin budget. None.

What this means, in effect, is that the people in Central Austin who are disproportionately taxed on their properties (due to higher land values, not necessarily higher incomes) are paying these bills, and those are the people who drive the LEAST. Residents of the more sprawling parts of Austin are somewhere in the middle (pay less than Central Austin, get some benefit), and the real winners are people living in Dripping Springs, Bastrop, etc who pay nearly nothing and get most of the benefit of these particular roadways.
Now that the roads are being re-floated as tollways, the city is free (pending this agreement) to use this money (again, property and sales tax and utility dollars, NOT gas taxes) within the city limits of Austin for the needs of actual Austin taxpayers. And the people who most benefit from the roadways will actually have to pay for them.

What a communist idea.

Summary: toll roads are a winner for residents of Austin.

Toll Roads Help Central Austin

Sal Costello is pissed that TXDOT has bribed the City of Austin with rebates on previously spent right-of-way money if they agree not to oppose these roads’ tolling.

As I’ve noted in draft form (I now hopefully have the motivation to go back and finish those posts – as I do, see the bottom of this post for links), huge chunks of bond money approved between 1997 and 2000 by City of Austin and Travis County voters were designated for “local participation” in projects like SH130, SH45, Loop1, US183, SH71, and US290 freeway and tollway extensions and expansions. This “local participation” boiled down to (in most cases) 10% of right-of-way costs + utility relocation. Doesn’t sound like much, but it added up to tens of millions of dollars each time.
What’s the rub? The city and county don’t get any money from gasoline taxes. These bonds will be repaid using city and county funds, which effectively means property and sales taxes (or in the city’s case, utility slush funds paid back by electric customers).

Note: You pay this bill no matter how much or how little you drive; no matter how efficient or inefficient your car; no matter whether you take the bus, ride your bike, or walk.

And guess who pays the most, proportionally, in property taxes? Here’s a hint: My small lot in central Austin is valued far higher than the comparatively vast Steiner Ranch lot of one of my cow orkers; more than the huge lot of one of my friends on “The Mountain”; heck, more than Sal Costello’s lot in Circle C. Most of the costs associated with city and county spending are related more to the size of the area covered rather than population density, by the way. And Sal’s getting far more lane-miles and far wider streets for his $0.50 than I am for my $1.35.

Accepting this rebate from TXDOT helps Central Austin. Of course, it requires Sal and his Circle C buddies to start paying more of their fair share instead of being subsidized by the central city (we’ll still subsidize you with our gasoline taxes when we do drive, but the property and sales tax subsidization will drop dramatically). So you can understand why the southwest and northwest Austinites are so ticked off, even if they hide behind the baloney claims of “double taxation” (I paid to park at Zilker Park last weekend; was I “double taxed”?)

Responsible City Council members should ignore this caterwauling and do what’s best for the fiscal interest of the city – which means tolling roads used disproportionately by people who either don’t pay any city taxes (because they live outside city limits) or pay relatively little. If you want less sprawl and a healthy center city, please make your voice heard.

Past highway spending in bond elections (added as I finish them over the day):

You’d better be hedging

Some fairly respectable analysts are beginning to join “kooks” like Kunstler, although in a far less inflammatory way, in predicting that high oil prices are not only here to stay, but likely to get quite higher. The latest “Occasional Report” from CIBC World Markets lays out the case. Older “Occasional Reports” are also highly recommended, as they seem to cut through a lot of baloney and show how and where higher energy costs will hurt (without going flat-out lunatic like the idiots who think every N% increase in gas prices means an N% increase n the price of everything delivered by truck, for instance).

I’ve been hedging higher energy prices for a long time now – we paid a hefty premium for our house in central Austin, and part of the reason was that we could, much more easily than your average suburbanite anyways, drastically reduce our driving and/or switch to jobs better served by public transportation. (my current office is served about as well as any out here in the ‘burbs, which is to say that I can take the bus each day by spending only about 40 extra minutes – as sad as that is, it makes me the winner here by far). We also bought a Prius in February of 2004 (after waiting five months) – again, a hedge; if we do end up having to drive a lot, at least it won’t kill us. Well, as it turns out, we’re only driving about 10,000 miles a year combined anyways, but every little bit helps.

The only problem is that hedges like this are largely a loss-amelioration strategy – they don’t gain us anything unless inflation makes wages go up. The same group above thinks it won’t this time, unlike in the 1970s, so the best we’re really able to do is attempt to be a bit less screwed than the average suburbanite will be.

This hedging logic (whether you believe in local kook Roger Baker’s Kunstler-like rants or not) should also apply to public infrastructure spending. I happen to believe that building the toll roads is a way to do this – the ‘hedge’ being that since the roads are going to be built either way (an assertion the environmentalists disgree with), it’s better to have them paid back with tolls rather than with property and gas taxes (even if the tolls come up short, the impact on central-city residents is still less than with the typical free highway payment mechanism – remember, you still pay gas taxes while driving around central Austin, but none of that money goes to those roads – in fact, urban areas all over the country are screwed by the gas tax’s bias towards suburban and particularly exurban areas). In other words, paying for the new toll roads with gas taxes simply makes things better for people at the far edges of Leander, and far worse for people living in Central Austin.

A better hedge, of course, would be a gradual overall increase in gasoline taxes with a mandatory minimum payback for major urban areas similar to what the Feds do with ‘donor states’. But with the average suburbanite convinced that they’re undertaxed rather than subsidized, it’s simply never going to happen. Toll roads are, in this sense, the best hedge we can manage at this point in time.

For those interested – ways to hedge on energy costs which are easier if you live in an urban neighborhood than out in one of the soulless sprawlburbs:

  • I can bike to work (up to 5 days a week) – right now I average once a week; mainly due to scheduling difficulties, but we could change this if we had to.
  • I can take the bus to work – at a 40 minute or so penalty per day (which as mentioned above puts me ahead of pretty much anybody else here)
  • I can get a job downtown (easier said than done) and reduce the transit penalty to near-zero
  • We’re within a (long) walk of 5 grocery stores – right now this means we have a very short drive; we only occasionally walk, but at least we CAN walk if it becomes expensive enough to drive
  • We can walk to a battery of other shopping and dining choices (we do this quite frequently now)
  • In an era of higher fuel prices, the places we shop are going to be less impacted than the strip-mall businesses, due to efficiencies of scale (cheaper to deliver to 5 grocery stores that are very close together than 5 that are very far apart)
  • Our house is small – less air conditioning and heating costs
  • Our house is old enough that it was designed before air conditioning – meaning we have enough windows for good ventilation most of the year

For these hedge privileges, however, we pay through the nose:

  • The house price is far higher, per square foot, than in the ‘burbs — this is not purely because of location, but also because post-WWII zoning laws have artificially restricted the supply of walkable urban neighborhoods. Most of the homes on our street are illegal under current zoning code for various bogus reasons.
  • Our city, county, and schools tax mainly through property taxes, which are a double whammy – not only are we appraised proportionally higher, but the property tax itself is often used in ways which subsidize suburban development – providing city services is far more expensive per acre in Anderson Mill than it is in Central Austin, but the Central Austinites pay orders of magnitude more property taxes.
  • Those property (and also sales) taxes are often grabbed by the state and spent in ways which not only subsidize the suburbs, but hurt central cities – things like requiring local ‘donations’ in order to expand freeways. (The 1998 and 2000 bond elections floated tens of millions of dollars in bonds which were used to pay for right-of-way and other costs for roads like the far north extension of Mopac, SH45, SH130, etc – none of which provide any use for central Austin at all, yet central Austin is where most of that tax money comes from – and when a project IS proposed which affects central Austin, it ends up being a destructive force like the ridiculous proposal by TXDOT to double-deck Mopac).

Cars’ FRR is often zero

Say you’re riding the #3 bus up Burnet Road. You pay 50 cents to get on the bus. That’s your “fare”. As it turns out, if you consider all the money taken in and all the money spent out by Capital Metro, and divide the difference equally per trip, it actually costs the taxpayers a couple of bucks for your ride. (The #3 bus, because ridership is high, ends up subsidizing some other routes, but we’re taking a simplistic view here). Your “farebox recovery ratio” is something like 20%.

Now say you’re driving your Ford Explorer down Lamar Blvd. As I’ve been recently discussing in the transportation funding topic, no gas tax money is spent on roads like this in Austin (basically major roads that don’t have a route shield on them).
Your “fare” for this trip is thus $0.00 (the road doesn’t have tollbooths, of course). In other words, the only cost you pay directly at the time (“user fee”) is the gas tax, but as noted, neither this road nor other major roads of this type in the city of Austin can be funded by gas tax dollars.

The cost of providing you with your rejuvenated driving surface was substantially more than zero (12.6 million dollars, including utility work), and all that cost was most recently paid by city of Austin taxpayers via property and sales taxes (bond election in ’98). And don’t fool yourself – most of the cost for projects like this isn’t for pedestrians, cyclists, or bus riders. We’d have a much smaller and much cheaper transportation network if nobody drove — the fact is that most of the money we spend on roads like this is directly attributable to people driving their cars, alone.

Your FRR on this trip is 0%. That’s right, a big fat zero. The only time Capital Metro gets this bad is on Ozone Action Days. So, libertarians, perhaps you shouldn’t throw stones from your suburban glass houses.

What about highways, you ask? Well, it’s true the majority of funds required to build state highways do, in fact, come from the gas tax. There are other, less direct, costs of these roadways which are borne by society at large, but even when considering just direct construction and maintenance cost, you still don’t get off claiming that you’re paying the bills. A substantial portion (largest line-items, as a matter of fact) of both the 1998 and 2000 bond elections for Austin and Travis County’s 2000 package were to pay “local contributions” towards right-of-way for new and expanded state highways. IE: even on a brand-new highway theoretically built with gas taxes, the property-owners and goods-buyers are still subsidizing you, whether they drive a lot, a little, or not at all.

The “Exit Test”: Suburb vs. City: Major Roads, from I-35

The “Exit Test”:

Another way to show the discrepancy in road funding in our area is to look at freeway intersections. (In this case, our definition of “major road” is a road which is mentioned in a marked exit from the freeway – in some places due to the frontage-road-centric design of highways here, multiple major roads have the same exit).

Using a current list of exits, let’s look at Round Rock through Austin. To make things even more fair for the suburbanites, and not coincidentally to make it simpler for my transcription, I’m only going to use the part of Austin north of the upper/lower-deck split (which leaves out the densest part of Austin where 100% of the exits are for locally-funded roadways).
Round Rock:

  • Exit 256: FM 1431 (state-system)
  • Exit 254: Business Route IH-35 (state-system) and FM 3406 (state-system)
  • Exit 253A: “frontage road”
  • Exit 253: US 79 (state-system)
  • Exit 252B: RM 620 (state-system)
  • Exit 252A: McNeil Rd (local-system: Round Rock)
  • Exit 251: Business Route IH-35 (state-system)
  • Exit 250: FM 1325 (state-system)

Out of 7 exits with a road mentioned, only one is for a roadway which is locally funded; while 6 are for state-funded roadways.
Now, the exits between Round Rock and the city limits of Austin:

  • Exit 248: Grand Avenue Parkway (local-system: Travis County and Pflugerville)
  • Exit 247: FM 1825 (state-system)

Finally, the exits which are for roads which cross I-35 within the city limits of Austin:

  • Exit 246: Dessau Rd and Howard Lane (both local-system: Travis County and Austin)
  • Exit 245: FM 734 Parmer Lane (state-system) and Yager Lane (local-system: mostly Austin)
  • Exit 243: Braker Lane (local-system: Austin)
  • Exit 241: Rutherford Lane (local-system: Austin) and Rundberg Lane (local-system: Austin)
  • Exit 240AB: US 183 (state-system)
  • Exit 239: St Johns Ave (local-system: Austin)
  • Exit 238B: US 290 (state-system), FM 2222 (state-system)
  • Exit 238: 51st St. and others: all local-system
  • Exit 237: Airport Blvd (local-system west of I-35, state-system east of I-35 as Loop 111) and 38½ Street (local-system)

Out of 9 exits listed here, 8 are for roadways which are locally funded, and 4 are for roadways which receive state funding. (Obviously some exits are for both).
A reminder again: I used the part of Austin which has the MOST state-funded roadways in it (since I stopped short of the upper/lower-deck split two miles north of downtown where the arterials come fast and furious and NONE of them get state funding).
Resources used in this article:

The “HEB test”

What is the “HEB test”?

In central Austin, most people drive (or even, gasp, WALK!) from their home to the closest major grocery store (i.e. non-convenience store) without driving one inch on a roadway which is part of the state highway system because most major roads in central Austin are city-funded streetsnot so in Round Rock or other bedrom communities; the vast majority there would not only choose to but MUST head out to FM 620 or 1825 or 685 or even I-35 to shop for anything of consequence.

For instance, from my house north of UT, these major grocery stores are the ones we shop at more than once a year. We drive to EVERY SINGLE ONE OF THEM without using any part of the state highway system (yes, we shop at all of these, in order of frequency). (We sometimes walk to a couple of these, and have biked to one):

  • Central Market (38th/Lamar)
  • HEB at Hancock Center
  • Randall’s on 35th
  • Whole Foods (6th/Lamar)
  • Fresh Plus on Duval/43rd
  • Randall’s at Exposition across from Casis
  • Randall’s at Exposition/Lake Austin
  • Wheatsville Co-op (Guadalupe/30th)

Try the same test sometime in your neighborhood. When applied over a set of neighborhoods in a geographic area, I think the “HEB test” is a good indicator of how much (or how little) of your major street network is funded by the state. (Remember! Roads which don’t have a route shield on them, like FM 1325 or US 183, are not parts of the state highway system, and thus are ineligible for all state gas tax money and most federal gas tax money!)

This test is a useful proxy for the claim (made by me and others knowledgeable about urban planning) that gasoline taxes effectively subsidize the suburbs – the typical dweller of the suburbs spends a much higher percentage of his “drive” on roads which actually get money back from the gas tax than does the corresponding center-city resident.

Many More Major Roads In The Suburbs DO Get Gas Tax Money

Same exercise as the last entry of this type. I couldn’t get the scale exactly right – this section of Round Rock / Pflugerville is actually quite a bit larger than the corresponding section of Central Austin. (There’s a “zoomed in” PDF of central Austin which I used for the original source – if I zoom in with a similar scale to this section of Round Rock, the lines are so thick as to be unusable).

Arterials which are part of the state highway system and thus get gas tax money:

  • IH-35
  • Parmer Lane (FM 734)
  • RM 620
  • SH 45
  • FM 1825
  • US 79
  • FM 1431 (olive green in far upper left corner)
  • FM 685 (north-south road colored olive green lower right corner)

(I can’t list all the roads on here that aren’t part of the state highway system because I don’t know many of their names – some of them don’t even currently exist – they are planned to be built sometime in the future by Round Rock and Williamson County).
Note that a much higher proportion of major roads in the southern Round Rock area are maintained by the state. In fact, it is unlikely that a resident of a neighborhood in this area will be able to pass the “HEB test”.

Most Major Roads In Cities Don’t Get Any Gas Tax

This entry is going to serve as background for a future entry about the gasoline tax, new proposed “miles driven tax”, and tolls. It will probably be of little interest in isolation, so you might want to wait for the commentary later.

This map (click for larger version) is from a map of central Austin from the 2025 CAMPO plan. Every road which is colored something other than black is classified as an arterial (major roadway). Note that the axis of Austin’s grid is off – north-south in these comments refer to the roads that go diagonally off to the northeast.

The following arterial roadways on the image are part of the state highway system, and thus, eligible for gasoline tax money from the state:

  • Mopac Expressway (north-south thick green line on left)
  • I-35 (north-south thick red line on right – leaves screen)
  • FM 2222 / Koenig Lane (east-west road at north end of image which starts as purple on the west end and switches to blue at Mopac)
  • FM 2244 (small segment in extreme lower left of image colored olive green)

The following arterial roadways on this image are not part of the state highway system and have typically not received any gas tax money, either state or federal, for construction or maintenance:

North-south roads, roughly from left to right:

  • Westlake Drive (pinkish road near Lake Austin on far left)
  • Redbud Trail (small segment of pink crossing Lake Austin)
  • Exposition Blvd (pink and purple road west of Mopac)
  • Burnet Road (blue road starting at 45th St and heading north – at US 183 it turns into FM 1325 which is part of the state system
  • Lamar Blvd (blue then purple then blue then olive green covering entire map segment)
  • Guadalupe St. (purple then blue then purple then joining Lamar Blvd north of 45th St)
  • Lavaca St. (forms one-way couplet with Guadalupe downtown)
  • Congress Ave. (brown street in downtown grid)
  • Colorado St., Brazos St. (two purple streets in downtown grid not otherwise mentioned)
  • Red River St. (purple street just west of I-35)
  • Chicon St. (I think) – pink north-south street on extreme lower right

East-West Streets, roughly from top to bottom

  • Justin Lane (I think) – purple/pink at very top, ending at Lamar
  • Hancock / North Loop – purple road starting at Mopac and heading east
  • 45th St. – purple road starting at Mopac, changing to blue between Lamar and Guadalupe, then back to purple
  • 35th / 38th St. – starts as purple west of Mopac, changes to blue east of Mopac and then pink
  • Dean Keeton / 26th St – starts as blue/purple then changes to green, crosses I-35 and turns blue.
  • Windsor / 24th St – starts as purple at Exposition, crosses Mopac and ends at Guadalupe
  • MLK / 19th St – starts as pink at Lamar, changes to purple and crosses I-35
  • Enfield / 15th St – starts as pink at Lake Austin, changes to purple at Exposition, crosses Mopac and turns into 15th St.
  • 12th St. – starts at Lamar as purple then changes to blue, ends at Capitol, restarts after Capitol as blue, crosses I-35 and heads northwest as purple.
  • 11th St. – starts as purple at Guadalupe, heads east to I-35, turns pink after I-35.
  • Downtown grid: 8th, 7th Sts
  • Lake Austin Blvd – from Enfield Road at lake, turns into 5th and 6th sts.
  • 5th and 6th sts from Mopac to I-35
  • Cesar Chavez / 1st St from Mopac to I-35 (just north of Town Lake)
  • Barton Springs Road (small segment of blue in extreme lower left)



Keep in mind that, by terms laid out in the Constitution of the State of Texas, none of the roadways in the much larger list can receive state gas tax money. And in practice, none of them really receive federal gas tax money either, since the practice at CAMPO (the local board that disburses federal gas tax money returned to the state under various programs)is to disburse pretty much all of the available roadway funds to state highway projects.
In other words, when you drive on Lamar Blvd in central Austin, you’re paying gasoline tax to the state, but the city (who has to pay to rebuild the roadway when necessary, as just occurred over the last 2 years) doesn’t see one penny of that money. When you see construction on 38th St, the city is paying those bills with your property and sales taxes, not with the gas tax you incur while driving.
(corrected MLK / FM 969 on 2/23 – FM 969 does not start until Airport Blvd, which is off the map)