Most Texas bills targeting toll road payment problems failed this year

Sign up for The Brief, The Texas Tribune’s daily newsletter that keeps readers up to speed on the most essential Texas news.

Robert Witchel carefully avoids toll roads every time he drives from his home in Northwest Travis County to the Veteran Affairs clinic in Southeast Austin.

His way takes him half an hour longer — sometimes even an hour with traffic — but he swore off pay roads about five years ago, ever since he racked up about $600 in unpaid tolls and late fees he says he didn’t owe.

Despite having a TxTag electronic sticker issued by the Texas Department of Transportation for automatic toll payments, he wasn’t told for more than a year that his account was not being charged. It took several calls to customer service to find out that his payment method was outdated. In the end, he paid $120 to settle the debt and decided to leave Texas’ toll road system forever.

“It’s a scam,” said Witchel, a U.S. Coast Guard veteran.

For years, Texas drivers like Witchel have complained about toll payment problems like double billing, rejected automatic payments, erroneous charges and invoices with hundreds of dollars in late fees and fines. Toll authorities have acknowledged issues and solved some of them, but others have persisted.

Lawmakers have been hesitant to intervene in the state’s toll road system, a mishmash of agencies and contractors that generates more than $2 billion a year and has improved mobility in Texas’ largest metropolitan areas, but often forces drivers to pay to get from one point to another — and deal with the frustration of an unexpected bill.

During this year’s regular legislative session, lawmakers filed at least nine toll-related bills, including proposals that sought to cap fines and fees, eliminate misdemeanor charges for delinquent users and make toll roads free to use once the bonds issued to build them are repaid. Only one of those bills, House Bill 2170, became law. It requires toll entities to notify users with electronic tags when an automatic payment is rejected. The law takes effect Sept. 1.

The Texas Department of Transportation and the North Texas Tollway Authority said they took no official position on the failed toll-related bills discussed during the session.

Activist groups that seek reforms to the state’s toll roads say the new law will be an improvement, but they expressed frustration with the lack of a statewide limit on how high fees and fines can go. Toll operators, for their part, say they are receptive to user experience issues, but in the past they’ve argued for keeping harsher penalties to deter nonpayment. Transportation experts say regional authorities also resist changing how they operate toll roads because they’re a reliable economic resource that helps pay for other mobility improvements.

Fees, fines and the Texas Legislature

Texas has a fragmented tollway system. TxDOT operates 13 out of the 42 toll roads in the state, not counting border crossings and bridges or High Occupancy Vehicle lanes. The rest are managed by county or regional toll authorities, which are independent government agencies responsible for building, operating and maintaining certain roads in their jurisdiction. They can issue bonds to build roads and recoup the cost through tolls, or they can partner with a private company that pays for part or all of the building costs in exchange for a profit from future tolls.

The biggest toll entities in the state are TxDOT, NTTA in the Dallas-Fort Worth area, the Harris County Toll Road Authority in the greater Houston area and the Central Texas Regional Mobility Authority in the Austin metropolitan area. Some of them, like TxDOT, NTTA and HCTRA, issue their own electronic tags. Most of these tags can be used on any toll road in the state.

When a car with an electronic tag passes through a toll booth, an automatic charge is made to the user’s account. If the payment is rejected, the toll entity sends an invoice by mail. However, many drivers have complained that they didn’t receive their bill on time or that they didn’t know they owed any money because of a problem with their automatic payments. And if they don’t pay on time, late fees start accruing and may lead to bills of hundreds of dollars.

HB 2170, the only toll-related law passed this year, requires each toll entity in the state to notify users immediately by mail, email or text message when a payment is rejected. It also mandates toll entities to send the invoice by mail with a clear message outside the envelope indicating it contains a bill that must be paid.

“The public is not adequately notified that these hidden fees are getting into these bills,” said Rep. Bobby Guerra, D-Mission, who authored the bill. “They only know that they take their toll and all of a sudden they’re getting all these crazy bills and they are outrageous.”

The legislation received bipartisan support because it was the least controversial of the toll-related proposals filed this year, Guerra said. Other proposals failed to garner sufficient support because they affected the state’s tolling business model more directly, he said.

One of the failed bills was Senate Bill 316, authored by Sen. Bob Hall, R-Edgewood, and supported by Texans Uniting for Reform and Freedom, a group critical of the state’s tolling system.

The bill would’ve capped late fees to $6 per invoice and $48 over a 12-month period. The Legislature passed a similar law in 2017 capping late fees to the same amount, but it affected only tolls managed by TxDOT. This resulted in varying fee criteria among toll entities, sometimes subjecting drivers to different rules when moving within the same city.

In the Austin area, for example, there are five toll roads managed by TxDOT and six by CTRMA. Since 2017, TxDOT has charged a $4 late fee per invoice, less than the cap by law. By contrast, the CTRMA charges a $15 late fee per invoice. According to CTRMA’s website, a driver may face a bill of up to $550 in fees and fines, plus the unpaid tolls, after 120 days of nonpayment.

Following the approval of the 2017 law, now-suspended Attorney General Ken Paxton issued a nonbinding opinion saying the cap should apply to all tolling entities, but some like CTRMA and NTTA did not adopt it. When the law went into effect in 2018, CTRMA’s then-executive director Mike Heiligenstein told news station KXAN-TV that he agreed there should be some sort of cap on late fees but preferred to keep an amount that was “painful enough” to incentivize people to pay tolls.

SB 316 also would’ve eliminated misdemeanor charges for nonpayment, reduced them to civil offenses and capped fines to a maximum of $25 per unpaid toll. Under current law, a toll user can face criminal charges after 120 days of late payment. And drivers who accumulate 100 or more unpaid toll charges within a 12-month period can be listed as habitual violators. This might block drivers from renewing their vehicle’s registration or ban them from toll roads. A car that circulates on a toll road it has been banned from may be impounded.

TxDOT said in a statement it has not filed a misdemeanor case with the courts since 2017.

Terri Hall, founder and director of Texans Uniting for Reform and Freedom and no relation to Bob Hall, applauded the passage of HB 2170 but blamed toll entities for stopping SB 316.

“The entities don’t even try to reach out to drivers and tell them that there’s a problem because they have a financial incentive to let all those fines and fees start backing up,” Terri Hall said. “They can make tons of money off drivers by having this problem happen.”

House Bill 3843, which would’ve instructed the Texas A&M Transportation Institute to conduct a study of the state’s tolling entities focused on billing practices, error rates and customer complaints, also failed during this year’s regular lawmaking session.

Other failed toll-related bills include a moratorium on tolls for one year, a discount program for seniors and a proposal to eliminate tolls once tolling entities have earned enough to pay off the bonds they issued to build those highways. A similar bill to eliminate tolls also failed in 2021.

“Working hard to fix bugs”

Tolling entities said they have improved their services in recent years.

In NTTA’s case, customer service was the key, said Arturo Ballesteros, the entity’s director of government affairs. Ballesteros said NTTA had already implemented most of the measures in HB 2170 before the law passed, although it needs to further improve its text message notification system. One of the most recurring problems reported to NTTA was failed payments when users’ credit or debit cards expired. That was solved when banks started renewing cards automatically, he said.

TxTag has also been criticized by users and lawmakers for billing problems. Since 2013, it has changed software vendors multiple times and fined two of them for failing to comply with the terms of their contract.

In 2020, TxTag implemented a system upgrade that led to technical problems and user complaints. A year later, TxDOT canceled the contract with the vendor, IBM, and paid back $11.7 million to drivers for overcharges associated with the system upgrade.

TxTag has had problems with technology over the years but has been solving them since getting a new vendor in 2021, according to Randy Machemehl, professor in transportation engineering at the University of Texas at Austin and former director of the university’s Center for Transportation Research.

“Technology is getting better every year,” he said. “TxDOT is working hard to fix bugs.”

TxDOT said it is unaware of any widespread issues currently affecting drivers. TxTag notifies users when a payment is declined and alerts them 25 days before a credit card on file is set to expire via email, text or phone. The agency said that TxTag was already sending out these kinds of notifications before HB 2170 was passed and has made other improvements like hiring more customer service representatives, enabling web chat and providing additional training.

The Central Texas Turnpike System, which handles TxDOT’s toll roads in Austin, has also made improvements to its automated payment system, according to two studies released by the entity. In 2018, more than 600,000 payments with electronic tags were rejected; that number dropped to nearly 90,000 in 2022, representing 0.15% of all TxTag transactions that year.

Still, Machemehl, a self-proclaimed toll supporter, said toll operators should be careful when sending invoices for unpaid tolls. Drivers don’t respond well to receiving a bill for hundreds of dollars as a result of technological errors. Fines are meant for drivers who actually failed to make a payment and should not be sent out when the toll operator’s system made a mistake, he said.

“They should show respect for people,” Machemehl said.

“Its own money machine”

Tolls generate extra resources for regional transportation authorities, which explains why they resist getting rid of them, said Rob Stein, a specialist in urban policy and professor of political science at Rice University.

The current toll system “created its own money machine,” Stein said. “If you build more toll roads, developers and grocery stores will build in those areas. You not only get more people living around the toll but also sales tax revenues and property taxes.”

NTTA made more than $1 billion in tolls in fiscal year 2022, according to financial statements. HCTRA earned more than $800 million in the same period, TxDOT nearly $500 million and CTRMA about $175 million.

The money collected from tolls pays for road maintenance, operation costs and the bonds issued to build them. When private partners help build the roads, profits are also shared with them. And when there is still a surplus, it can be used in non-road projects. The Harris County Toll Road Authority, for example, approved a plan last year to use its surplus to build pedestrian and bike trails in the county.

Tolls were a solution to road expansion underfunding, said Andrew Waxman, a UT-Austin professor and economist who studies the links between environmental outcomes, urban policies and inequality. Waxman pointed out that gas taxes have historically been used to pay for road construction. But those taxes have a flat rate of 20 cents per gallon sold in the state, which means the money that comes from them does not go up with gas prices and is not updated for inflation.

Over time, the funds available for roads have lagged behind construction costs, and the gap has widened as electric vehicles become more popular, Waxman said. In response this year, Gov. Greg Abbott signed Senate Bill 505, which creates a fee for electric vehicle registration. Money raised from those fees will go into the state’s highway fund and is meant to compensate for the loss of gas-tax collection. The law goes into effect Sept. 1.

Toll roads are also promoted as a way to improve traffic flow, Waxman said.

“The conventional approach to reducing congestion is to add more lanes. The problem with building wider roads … is that the additional space is filled up with more cars,” he said. “Another way to address that is to charge people to use the road, increasing the cost rather than expanding the supply of space. That’s not something that people are very happy to hear.”

Toll roads in Texas continue to expand. According to a 2022 TxDOT report, there are more than 30 toll projects under construction or being planned, which would add about 300 more miles to the nearly 900 miles of toll roads that already exist in the state.

Disclosure: Central Texas Regional Mobility Authority (CTRMA), Rice University, Texas A&M Transportation Institute and University of Texas at Austin have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

The full program is now LIVE for the 2023 Texas Tribune Festival, happening Sept. 21-23 in Austin. Explore the program featuring more than 100 unforgettable conversations coming to TribFest. Panel topics include the biggest 2024 races and what’s ahead, how big cities in Texas and around the country are changing, the integrity of upcoming elections and so much more. See the full program.