Fitch Ratings Forecasts the Need for Massive Toll Increases

Fitch Ratings Forecasts the Need for Massive Toll Increases: "A major credit rating agency yesterday released a report reinforcing a negative outlook on the financial stability of the toll road industry. Fitch Ratings analyzed the performance of forty US toll road facilities during 2007 and 2008. It predicted that the roads would not see a recovery from the recession until 2011 at the earliest and that motorists would be paying more money in tolls as a result.

'Fitch expects the cost of highway travel to increase in real terms -- something that generally hasn't happened in the US historically,' the report stated. 'In other words the days of declining real toll rates may be gone. And while beneficial in the near term, higher toll rates over time could present challenges in the next downturn as the value of a low toll rate has borne itself out in this recession.'

The report emphasized how industry performance is at an all-time low. Traffic on thirty-three toll facilities dropped 4 percent in December 2008 compared to 2006 -- the largest such plunge since data was first collected in 1970. Revenue did not fall as sharply as traffic because most of the toll roads introduced sharp rate hikes to cover losses. During the same period, stand-alone toll road revenue dropped only 1.5 percent. For some roads, that may not be enough."
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Libertarians think toll roads are great, but there is that little problem of surviving recessions.