July 29, 2020
Florida TaxWatch generally supports state investments in transportation
infrastructure “but there is legitimate concern about the financial prudence of
the investment in the Suncoast Connector as a bond-financed toll road,”
President Dominic Calabro and Kurt Wenner, vice president of research, said in
a joint statement to The Bond Buyer.
TaxWatch performed its own analysis of the proposed toll road because the organization questioned its economic and financial feasibility, they said.
“If there is not sufficient demand on this proposed corridor to generate the revenue needed to make the project financially sound, the decision to move forward could have a negative and lasting impact on the turnpike system and, ultimately, Florida taxpayers,” the men added.
“Toll revenue has fallen considerably since the COVID-19 crisis began in Florida,” they said. “So the feasibility studies will be especially important in determining risk,” of the Suncoast project.
In a 32-page paper called “The Suncoast Connector: What We Still Need to Know,” TaxWatch found that although no official cost estimates have been developed for the road since the exact route hasn’t been determined that construction of the Suncoast Connector could range in cost from a low of $4 billion to a high of $10.5 billion – or between $25 million and $70 million per mile.
If the cost fell at the midpoint of Florida TaxWatch’s estimated range, and only 70% of total costs are financed with bonds, the Connector would need to generate $2.37 million in toll revenue per mile to satisfy projected bond costs, which is 10% more than the average revenue per mile of the entire Florida Turnpike System, the study said.
After reading the executive summary of the Florida TaxWatch report, Robert Poole, director of transportation for the Reason Foundation, said he agrees with some of its findings.
“I think the Florida TaxWatch has raised exactly the right questions about this,” he said in a phone interview with The Bond Buyer Monday. “We don’t actually have much of a plan yet, although the Legislature seems to think this is a fait accompli.
“I’ve never seen a project originate or be planned in this manner,” he said.
Poole pointed out that no traffic and revenue study has been done, nor have project costs been estimated. Toll and fuel tax revenues probably have declined due to the impacts of the coronavirus pandemic, and both FDOT and the Turnpike Enterprise have major projects to fund, he added.