Houston Tx EZ TAG transponder tolls up 5%, cash stable - rounded indexing

September 12, 2009

Harris County (Houston) Toll Road Authority (HCTRA) are raising their transponder tolls - brand: EZ TAG - by a nickel (5c) at mainline plazas on the Sam Houston, Hardy and Westpark tollroads today. Tolls go from $1.25 to $1.30 for cars.

Cash tolls remain the same at $1.50.

Harris County commissioners adopted a policy in 2007 of adjusting toll rates annually based on the change in the local consumer price index, or two percent, whichever was the larger in the previous full year.

2007 to 2008 the increase in the price index for the Houston area was 3.752%.

The policy is to round to the nearest nickel for transponder tolls and to the nearest quarter (25c) for cash tolls.

The 3.75% adjustment to $1.25 gives $1.297, hence $1.30 is the new toll.

The same adjustment to $1.50 cash toll gives $1.556 which under the quarter-rounding rule stays at $1.50.

There will have to be an 8.34% rise in the index before the cash toll rounds up to $1.75.

2009/2008 inflation would have to be >4.442% to trigger the rounding up to $1.75 for cash.

What are the bets?

TOLLROADSnews 2009-09-12

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