A Standard & Poor’s Ratings Services report published on April 10th,2012 shows that tighter government budgets force officials to seek methods to fund new projects for the highways.
From around 75,000 miles of U.S. highways, only about 5,000 require tolls. The growing demand for new roads, together with rising operating and maintaining costs, will make toll roads remain a key financing option for the U.S. road system.
“High toll rates could have credit implications for public toll road operators, who have traditionally enjoyed significant capacity to raise rates with little or no price elasticity,” said Standard & Poor’s credit analyst Ben Macdonald.
After the 2008 recession, U.S. highway traffic volumes declined by 2% year-over-year after consistent 1% to 2% annual growth through the previous 10 years. Revenue growth may be generated by high toll rates, but the growth rate may slow until regional economies recover and congestion builds. That is why future revenue on these roads is expected to grow with traffic volume and not with toll increases.
The effect of universally high tolls on regional economies hasn’t been seen in the U.S. in the past century, so the road down which this trend could lead is not yet clear.