A global bond rating agency has recommended that future toll hikes be pared back on the Indiana Toll Road, as big increases in the first years of private operation drove traffic off the road.
"In 2010, traffic on the highway was approximately half the originally projected level, due in part to the high original forecast and significant toll increases," the commentary from Fitch Ratings states.
The 75-year-lease for the Toll Road is now the object of a bidding war between international investors, following a federal judge's approval of a bankruptcy sale last month. The current operator, Indiana Toll Road Concession Co., declared bankruptcy in September.
That company was formed by the Spanish-Australian consortium that paid the state of Indiana $3.8 billion in 2006 for the right to operate and collect tolls on the 157-mile road.
The Fitch Ratings credit market commentary released Monday also states that there could be "potential political fallout" to the state if tolls are increased above the inflation rate, even though the 75-year-lease for the Toll Road grants the operator that right.
"Aggressive increases could divert traffic to the state-run network, leading to greater congestion on other routes," the commentary warns.
Under the lease now up for bid, the Toll Road's operator can raise tolls each July 1 to the greater of 2 percent, the increase in the consumer price index or the increase in U.S. Gross Domestic Product (GDP).
GDP in the U.S. in the second quarter of this year was 4.6 percent and a preliminary estimate of third quarter growth came in at 3.5 percent. Numbers like those would significantly boost the toll increase that could take effect in July.
Inflation has been bumping along at a much more moderate pace of about 1.7 percent during the last 12 months.
In the first few years of the Toll Road lease deal, tolls increased by unprecedented amounts for many users.
From 2006 to 2009, the toll for semi-trailer trucks increased 120 percent, zooming upward to $32 in that time from $14.55 a month before the lease went into effect. Those trucks currently pay $38.70.
Car and motorcycle cash customers got hit with their toll increase in 2008, when the toll for a trip from the Illinois border to the Ohio border was hiked to $8 from $4.65. That toll is now $10.
The Fitch Ratings commentary did not deal directly with what will be one of the largest one-time toll increases in the history of the road for those driving cars and motorcycles in 2016.
That is when the state will stop paying for the discount for those with E-ZPass transponders. The toll for someone with a transponder will leap to more than $10 from its current $4.65.
The transponder discount was part of a political deal engineered by then Gov. Mitch Daniels in 2006 to win the support of northern legislators, who had complained their constituents would bear the brunt of toll increases. It was estimated it would cost the state $250 million.