The Paradox of the Dulles Airport Toll Road

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(Washington, D.C. -- David Schultz, WAMU) Nowadays, the cash toll roads generate is often put toward more than just the maintenance and upkeep of the road itself.

That's what's happening in Northern Virginia: the Dulles Toll Road connects the D.C. region to Dulles International Airport. The local Airports Authority here is using money from the road to pay for a new rail line that will run parallel to the road.

But how much money are they using? Therein lies the rub...

Proposals for the new rail line out to Dulles Airport have it weaving through 23-miles of suburban and urban areas. As you might imagine, it's a pretty expensive project; some estimates have the final price tag north of $5 billion. And, as of this moment, the federal government is contributing less than 20 percent of the funding, so state and local officials have to come up with the rest.

Consequently, more than half of the funding for this massive public works project will come from Dulles Toll Road revenues. Rather than wait for that toll money to pile up, the Airports Authority has instead borrowed against future revenues. They estimated how much revenue they'll earn for the next 35 years or so and sold bonds based on that estimate.

The problem with this: what if they're wrong?

What if the Airports Authority's estimates are overly-rosy and the Dulles Toll Road isn't the cash cow they think it will be? They'll still have to pay back the amount they've bonded and their principal will be long gone by then, spent on building the rail line itself. If that happens, seemingly the only thing the Airports Authority will be able to do is raise toll rates.

But there's a problem there too: supply and demand. The more the Airports Authority raises tolls, the fewer people will be willing to pay them. So even that might not work. And, as this WAMU story details, the tolls might not have much more room to rise before the Airports Authority has to face down those market forces.

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