Toll hike likely, but rival plan to be debated, too

All indications are tollway drivers should prepare for a rate hike effective Jan. 1.

With a discussion scheduled for today on the Illinois tollway's proposed $12 billion, 15-year capital plan, insiders said it appears the votes are there to pass the increase, which ranges from 35 to 45 cents at the average plaza for I-PASS users in cars.

The project is estimated to create 120,000 permanent jobs and thousands of temporary construction jobs.

But before tollway directors vote on the issue, a debate is expected on a Plan B. Director Bill Morris of Grayslake thinks raising tolls by 15 cents at 40-cent plazas with comparable increases elsewhere will fund a 10-year capital plan.

Here's a look at the differences between the proposals.

The basics#376; Illinois State Toll Highway Authority leaders say raising fees is essential to pay for $8 billion of needed maintenance and rebuilds plus widening the Jane Addams Tollway (I-90) from Rockford to O'Hare. The other $4 billion would pay for an interchange at I-57 and the Tri-State Tollway (I-294), extend the Elgin-O'Hare Expressway east to the airport and build a bypass on the western end of O'Hare linking with the Tri-State to the south and I-90 to the north. It would also fund studies on expanding Route 53 into Lake County and the proposed Illiana Expressway, connecting I-55 near Joliet to I-65 in northwest Indiana.In addition to raising rates at tollway plazas, fees at tolled ramps will also increase anywhere from 15 cents to 45 cents to fund the work.#376; Morris says his proposal allows for maintenance of roads, widening the Jane Addams and beginning work on the Elgin-O'Hare and I-57/Tri-State interchange. He acknowledged that projects such as Elgin-O'Hare and the interchange likely will require an additional rate hike. He recommends reviewing expenses and revenues every three years to see if more toll hikes are needed.The Morris plan also seeks a share in revenue generated by economic development resulting from the Elgin-O'Hare and I-57/Tri-State projects through special taxing districts to capture new sales or amusement taxes.Another Morris recommendation is to implement congestion pricing #8212; in which drivers pay more during peak times to use express lanes #8212; on new construction. His plan also assumes the eventual extension of Route 53 north of Lake-Cook Road, providing that Lake County communities reach a consensus on the design of the controversial project.Tollway concernsIllinois tollway administrators contend Morris' idea falls short, saying it provides for $900 million of spending in the first three years while the tollway's plan would allow for $1.9 billion in the same time frame. Without that extra money, the agency would have to delay work on the Elgin-O'Hare, interchange and other projects, which would cost more in the long run, Finance Director Mike Colsch stated in a memo.In addition, Morris assumes that the cost of construction will go up by 2 percent a year while the tollway uses a rate of 5 percent in its calculations. #8220;The construction industry escalation rate has been 5 percent annually over the past 10 years,#8221; Colsch said.Regarding Morris' suggestion of revisiting rate hikes periodically, #8220;toll increases every three years that are not agreed upon by the board until after the capital plan starts are unlikely to be viewed favorably by the financial community,#8221; Colsch noted.Plan BMorris, a retired investment banker, disagreed with the agency's projections, noting the volatility of the economy makes a 10-year plan more pragmatic. #8220;It's ridiculous to drill down the numbers 15 years into the future,#8221; he said. Regarding the cost of construction, he noted that right now a 2 percent increase per year estimate reflects the realities of the recession and its impact on the industry.#8220;One reason for doing the (capital) program is that's there's no work for construction (workers) and we're going to get better prices,#8221; Morris said.Morris also questioned tollway estimates of interest rates on loans of around 6 percent, saying the current rate is about 4.5 percent to 4.75 percent. Fluctuations in interest rates make a significant difference when dealing with the amount of money the agency is considering borrowing. #8220;Assuming a rate of 6 percent is ridiculously high,#8221; he said. #8220;There's way too many assumptions and we have to crawl before we run,#8221; Morris added.