Reason Foundation

Reason Foundation

Florida Toll Agencies Should Not Be Consolidated

OOCEA and THEA need to become fully independent, self-supporting local toll authorities, like MDX

Robert Poole and Daryl Fleming
January 30, 2012

The 2011 Florida legislative session saw several proposals that would have consolidated some or all of the local toll authorities into the Florida Turnpike Enterprise (FTE). Later that year, a Work Group of the Government Efficiency Taskforce (GET) produced a report calling for most of the functions of the local toll authorities of Orlando (OOCEA) and Tampa (THEA) to be consolidated with FTE. The purpose of this study is to assess the arguments for and against the consolidation of toll agencies in Florida.

Our Reason Foundation project team carried out a review of how toll roads and bridges are provided in Florida. Since most of the focus of consolidation proposals is on local toll authorities (LTAs) in the state’s major urban areas, we reviewed how other fast-growing states are using toll finance to add modern toll facilities to their urban expressway systems. We also reviewed two relatively recent toll agency consolidations, in New Jersey and Massachusetts. And we also analyzed the GET Work Group’s estimate of $24 million in annual cost savings from consolidation of OOCEA and THEA with FTE.

We found that:

Our review of Florida toll agencies uncovered a number of areas where reforms other than consolidation would bring about important improvements. This leads us to make the following six policy recommendations for the future: 

First, rather than consolidating local toll authorities into FTE, the legislature should free OOCEA and THEA from the constraints imposed by their “lease-purchase agreements” with FDOT, under which, in exchange for the state paying for their operating and maintenance costs, the LTAs must eventually turn over their toll roads to the state. Doing that would be inconsistent with our finding that there are many advantages of providing urban tolled expressways via locally controlled agencies, rather than centralizing all toll facility provision at the state level. Therefore, OOCEA and THEA should be “graduated” from this program and become independent, self-supporting urban toll agencies like the Miami-Dade Expressway Authority (MDX), which attained this status in 1996. This change should involve:

Second, on a longer-term basis, Florida should consider reorganizing the provision of toll facilities, so that FTE specializes in inter-city toll roads and the LTAs provide all the urban expressways in their regions. This would involve the transfer of several inter-city toll roads (e.g., Alligator Alley) from FDOT to FTE, as well as the acquisition (at a fair and appropriate valuation for a transfer of state assets) of a number of urban expressways and toll bridges from FTE and FDOT by MDX, OOCEA and THEA.

Third, legislators should be supportive of the creation or reactivation of additional LTAs in larger urban areas, such as Jacksonville and Southwest Florida, as transportation demand and congestion make tolled expressways useful enhancements of urban mobility.

Fourth, legislators should become familiar with the emerging “managed lanes network” in Southeast Florida, being developed incrementally by FDOT, MDX and FTE. Details of how this network should be governed and managed are under study, thanks to a Federal Highway Administration grant, under its Value Pricing Program, to FDOT District 6. Such networks offer great potential for congestion relief and region-wide express-bus/bus rapid transit in urban areas, and may be worth considering for Florida’s other large urban areas in coming years. Managed lanes and urban toll expressways should be considered building blocks toward future highway finance based largely on miles traveled, rather than fuel consumed, as the fuel tax declines as a sustainable funding source.

Fifth, we reviewed and recommend against a recent proposal that would “monetize” the Turnpike, bonding “excess” revenues to support labor-intensive (“job-creating”) non-highway infrastructure projects. In addition to depriving the Turnpike of capital needed to keep pace with growth, this project would, in effect, force Turnpike customers to pay for non-highway projects, putting at risk Turnpike users’ long-standing support for its tolls as pure user fees under the users-pay/users- benefit principle.

Sixth and last, we reviewed concerns about the compensation of LTA CEOs being greater than that of Florida’s Secretary of Transportation. Compensation of LTA management is based on benchmarking of compensation levels at comparable agencies nationwide. The problem is not that toll agency compensation is too high; rather, the Secretary’s compensation is below market levels, as pointed out by the governor-elect’s transportation transition team.

Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy

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