Saturday, June 03, 2006

"Heavy on rhetoric and light on real action."

Perry, Texas GOP seize border as issue

At state convention, delegates split with Bush on immigration

Saturday, June 3, 2006

The Dallas Morning News
Copyright 2006

SAN ANTONIO – Gov. Rick Perry joined his fellow Texas Republicans in railing against illegal immigration Friday, telling the GOP faithful the Bush administration has failed to control a "porous and unsecured border."

"There is no homeland security without border security," Mr. Perry told thousands of delegates to the party's state convention.

The delegates cheered, but the party was at the same time striking a defiant tone against the policies of its leadership in Washington and, in some cases, Mr. Perry himself.

The party's platform – its statement of official positions on various issues – calls for construction of a border-long "physical barrier" between the U.S. and Mexico and deployment of military troops to stop unlawful entry.

In a direct rebuke of the White House and GOP-controlled Senate, a plank titled "No amnesty. No how. No way" rejects President Bush's proposal to provide a path to citizenship for illegal workers.

The Republican governor, who favors a guest-worker program, seized on the immigration issue in a convention-opening speech to about 4,000 delegates, who have demanded a get-tough approach on the border.

"The debate on immigration reform is meaningless until the federal government secures our southern border," Mr. Perry said. "Texas is not waiting on Washington to act."

To that end, Mr. Perry said he has already dispatched the National Guard and provided more money to local law enforcement. And he again touted a program to put surveillance cameras on private property "so that concerned Americans can help protect our nation through online neighborhood watch programs."

Mr. Perry did not mention the delegates' call for a border-long barrier, which he opposes.

His camera initiative sparked uproarious applause from delegates, many of whom support volunteer citizen patrol groups monitoring the border. And he drew cheers by announcing that Texas will start requiring Medicaid applicants to verify they are in the country legally.

Strayhorn responds

Comptroller Carole Keeton Strayhorn, a Republican challenging Mr. Perry's re-election as an independent, said the governor had come late to the debate on illegal immigration with "window dressing that is heavy on rhetoric and light on real action."

From committee meetings to the convention floor, Texas Republicans staked out a strong position on immigration apart from the national party, which controls the White House and Congress.

Although the state party platform does not refer to Mr. Bush by name, it is a barbed renunciation of his immigration initiative – and of state and federal laws adopted with bipartisan support.

The platform calls for repealing laws that grant citizenship to the children of illegal immigrants born in the U.S. and that require hospitals to give nonemergency care to illegal immigrants.

In addition, the delegates object to a state law allowing in-state tuition for illegal immigrants, a bill that Mr. Perry signed into law. Republicans also want federal funds withdrawn from colleges that provide such tuition discounts.

Robert Black, a Perry spokesman, said that despite opposition by delegates, the governor still supports the in-state tuition law.

Outside the convention hall, two Democratic legislators from San Antonio denounced the convention's tone.

"Governor Perry and the Republican Party have used immigration as a wedge issue to divide people," said state Rep. Joaquin Castro, D-San Antonio.

His San Antonio House colleague, Trey Martinez Fischer, said the state GOP platform "is in stark contrast to the national platform that President Bush embraced in 2004," which advocated a guest-worker program and a path to citizenship.

Mr. Perry faces as many as three high-profile challengers. Mrs. Strayhorn and fellow independent Kinky Friedman have petitioned to be on the ballot, and former U.S. Rep. Chris Bell of Houston is the Democratic nominee.

In his speech, Mr. Perry took a shot at Mrs. Strayhorn by dismissing his "shrillest critic" and by elevating Mr. Bell as "my principal opponent."

Mr. Bell, meanwhile, noted that Mr. Perry is being targeted by some GOP delegates for advocating increased taxes on business to offset property tax cuts in the school finance legislation.


The revamped business tax is designed to offset some of the $15.7 billion in school property tax reductions that Mr. Perry says are coming in the next three years.

Perry allies beat back a call for repeal of the business tax. Instead, the platform calls on the Legislature to reconsider it when lawmakers convene next year.

"Rick Perry hasn't even convinced the delegates at his own convention that he has Texas on the right track," said Bell spokesman Jason Stanford.

Mr. Perry defended his school finance package, casting the business tax increase as a reform that more evenly applies the levy and produces a lower overall tax burden for most Texans.

The governor also touted a provision that forbids employers to deduct the payroll expenses of illegal immigrants. The sponsor of that provision, though, was a Democrat – Rep. Rafael Anchia of Dallas.



© 2006 The Dallas Morning News Co


Rick Perry ignores the Republican Party platform

I'll take political platforms seriously when the candidates do


Jaime Castillo
San Antonio Express-News
Copyright 2006

Unless you're a political reporter or a Republican Party loyalist, chances are you had no idea the state GOP convention kicked off Friday in San Antonio.

That's because political conventions, whether they involve Democrats or Republicans, have lost all relevance to larger society.

They don't decide which candidates run for office. They tend to be controlled by the extreme factions of their respective parties.

And they are so tightly scripted and predictable that they are devoid of any real drama or intrigue.

That doesn't mean the 11,000 GOP activists who will pack the Convention Center this weekend and the like number of Democrats who will venture to Fort Worth next week won't take it seriously.

They will expend an amazing amount of energy molding, shaping and approving modifications to party platforms that arguably will be irrelevant before the ink is dry on the precious documents containing their hard-fought words.

I don't say this lightly, because every organization should have a set of guiding principles that dictates its reason for being.

But how is everybody else supposed to take these party platforms seriously when the candidates don't adhere to them?

Since the Republicans happen to be here, let's focus on their candidate questionnaire that was based on the 2004 version of the state party platform. The 2006 version won't be made official until sometime today, but it is not expected to change dramatically except in the area of illegal immigration.

GOP delegates are supposed to toughen an apparently weak immigration stance that only calls for the use of military forces on the border, the end of automatic U.S. citizenship for children born to undocumented immigrants, the denial of non-emergency medical care to undocumented immigrants and the strong opposition to any form of amnesty or legalized status for immigrants.

So what would the national landscape of elected officials look like if, as suggested by some Republicans, every GOP candidate had to adhere to every plank of the Texas platform?

Put it this way. There would be no President George W. Bush or Gov. Rick Perry.

Bush is a multiple offender of the platform, starting with his support of a guest worker program that would provide a path to legalization for some undocumented immigrants.

He also would flunk based on the party's call for "fiscal responsibility." The federal debt has gone from $5.6 trillion to $8.2 trillion since Bush took office.

Perry's biggest offense is his support of the Trans-Texas Corridor, a multibillion-dollar network of highways and railways, which, the platform warns, would involve the "confiscation of private land."

You can also say adios to Senate Majority Leader Bill Frist for his support of stem cell research. And the same goes for U.S. Sen. Kay Bailey Hutchison, whose abortion views violate the party's strict pro-life stance that doesn't allow for exceptions in the case of rape, incest or the life of the mother.

Hutchison supports allowing a woman to make a choice about abortion until the unborn baby is viable outside the womb but supports states' ability to impose restrictions such as parental consent or notification for minors.

The list of "unworthy" Republicans could go on and on. But if the candidates aren't going to lose sleep over it, we shouldn't either.

To contact Jaime Castillo, call (210) 250-3174 or e-mail His column appears on Mondays, Wednesdays and Saturdays.

© 2006 San Antonio Express-News:


Friday, June 02, 2006

NEWS FLASH: Rogue Transportation Commissioner has a thin skin

TxDOT attempts to suppress coverage of state sponsored forum

TxDOT declines application for media credentials to report on the Texas Transportation Forum.

JUNE 2, 2006

Copyright 2006

David Stall has written as a freelance reporter for many years. He was issued his first Press Credentials by the Harris County Sheriff's Department under Sheriff Jack Heard in 1976. Additionally his photographs have routinely appeared in more than a half-dozen daily and weekly newspapers across Texas.

Over the last three years Stall has reported on numerous meetings and events such as the Texas Transportation Summit in Irving (now being boycotted by TxDOT). While covering transportation issues Stall has worked along side journalists from Time Magazine, The New Yorker, Dallas Morning News, San Antonio Express News, Houston Chronicle and the Fort Worth Star Telegram, just to name a few.

In response to a recent request for media credentials for Stall to cover the Texas Transportation Forum (sponsored by TxDOT) was notified that "applications for media credentials are being accepted only for mainstream news media." In the message from TxDOT Public Information Director Randall Dillard, Stall was told Friday (6/1/06) via e-mail that he could attend the forum by paying the non-governmental rate ($330.00) at the door.

This is the first time Stall has ever been denied media credentials to cover a transportation function.

The TxDOT rebuff tends to indicate that is somehow fringe, illegitimate, or perhaps without readership. Yet TxDOT routinely credits us with improving public attendance and participation in their own public meetings. The Texas Transportation Commission appointed founder Linda Stall to the Trans Texas Corridor Citizen's Advisory Committee, a position she still holds. David Stall and TxDOT Turnpike Authority Director Phillip Russell have appeared on NBC television affiliate KCEN together to discuss the TTC. And, certainly Randall Dillard knows who Stall is as they have appeared as radio guests together to discuss the same topic.

Oh sure, isn’t network television, nor are we major print or radio. But, we do publish an Internet newsletter with thousands of subscribers who are particularly interested in Texas transportation issues.

We are a recognized Internet publisher.

Additionally, Stall has written a number of articles for that have been published in periodicals ranging from association newsletters and community newspapers to national magazines. One such guest article appears in the August 2005 issue of Robb Report’s Worth Magazine.

This is a state sponsored forum, hosted by a state agency; with many speakers that are fulltime public agency employees. Accordingly, we believe that there is a greater responsibility to allow for openness and public disclosure. Is this action by TxDOT an attempt to discourage from reporting on their new forum? Is it perhaps their goal to suppress critical coverage? We think so.

The harsh reality is that TxDOT knows that isn’t a fan of the Trans Texas Corridor. Under the leadership of Transportation Commission Chairman Ric Williamson TxDOT has been directed to squash opinions not shared by the Commission and Department. Chairman Williamson was very direct when he said that the Texas Transportation Summit organizer (David Dean) was working at cross-purposes to TxDOT in consulting for the River of Trade Corridor Coalition. As a direct result, and at Williamson's direction, TxDOT has boycotted the state’s largest and best established transportation forum (sponsored by local government) and now created their own. [ BACKGROUND ]

We believe that the information TxDOT shares at their $300 per person forum is of significant public interest and should be widely and freely reported. newsletter readers are uniquely interested and should have the opportunity to enjoy the benefits of a free press. has a larger readership than many community papers and perhaps other newsletter and trade organizations being granted media credentials by TxDOT. I believe it's a serious threat to freedom of the press to exclude the reporter from any publisher, even an Internet publisher, if such is based on their critical perspective.

TxDOT should not deny media access to report on this important forum.

© 2006 CorridorWatch:


Thursday, June 01, 2006

Government "where the sun don't shine."

Strayhorn scolds Perry for toll pact's secrecy

Governor's spokesman accuses opponent of 'trumped-up attack'

June 1, 2006

Associated Press
Copyright 2006

AUSTIN – Independent gubernatorial candidate Carole Keeton Strayhorn chided Republican Gov. Rick Perry on Wednesday for keeping secret the details of a state contract with a private company building Texas' colossal toll-highway system.

It's been exactly a year since Attorney General Greg Abbott ruled a contract between the state Transportation Department and Cintra-Zachry is public information, Mrs. Strayhorn said.

"We need government in the sunshine," she said. "I'm calling on Governor Perry to order his Transportation Department to drop its lawsuit and release to all Texans the secret contract with a foreign company."

Cintra-Zachry – the Spanish and American partnership working on the first phase of the Trans Texas Corridor highway system – and the Texas Department of Transportation went to court to keep parts of the deal sealed.

Robert Black, a spokesman for Mr. Perry's re-election campaign, said Mrs. Strayhorn is merely keeping up her tactic of criticizing the governor. "We've all been down this road before: Carole Strayhorn is angry and wants attention so she launches a shrill, trumped-up attack," Mr. Black said.

Uproar over the governor's Trans Texas Corridor has emerged as a leading campaign issue for Mrs. Strayhorn, who has appeared at anti-toll-road rallies. On Wednesday, some anti-toll activists and officials from Hill County joined Mrs. Strayhorn at a news conference, nodding in agreement with her.

She denounced the recent statements of Texas Transportation Commission chairman Ric Williamson, who told North Texas leaders that, "if you aggressively invite the private sector to be your partner, you can't tell them where to build the road."

"Texas property belongs to Texans, not foreign companies; Texas freeways belong to Texans, not foreign companies," she said, adding that Texans won't sit by and let the governor "cram toll roads down our throats."

Mr. Black said that in 1999, Mrs. Strayhorn praised foreign investment in Texas. He also said most of the Cintra-Zachry contract is available online to the public, minus the company's proprietary information.

© 2006 The Associated Press:


Strayhorn: "Apparently, the governor and his transportation chairman believe that what a foreign company wants, a foreign company gets."

Toll-road issue growing heated

Jun. 01, 2006

Fort Worth Star-Telegram
Copyright 2006

AUSTIN - Comptroller Carole Keeton Strayhorn, running for governor as an independent, was teed off Wednesday over Republican Gov. Rick Perry's state transportation commission chairman's remarks that a foreign-owned company could supersede local officials in deciding where new toll roads are built.

Commission Chairman Ric Williamson, a Perry appointee and longtime friend, rejected pleas by North Texas leaders last week that a road-building consortium partly owned by a Spanish firm be forced to locate a new tollway system closer to the population centers in Fort Worth and Dallas. When courting private companies to construct highway projects, Williamson told about 100 officials, "you can't tell them where to build the road."

Strayhorn emphatically disagreed.

"To me, that is absolutely shocking," Strayhorn said during a news conference at her campaign headquarters. "Texas property belongs to Texans, not foreign companies. Texas freeways belong to Texas companies.

"Apparently, the governor and his transportation chairman believe that what a foreign company wants, a foreign company gets," she added. "And Texans have no say over our freeways and critical infrastructure."

Williamson said Wednesday that his remarks, which were first reported Friday in the Star-Telegram, were intended to make clear that private companies in the toll-road business must have the latitude to ensure that their ventures with the state are profitable.

Perry's campaign spokesman Robert Black said that a private contractor working with federal environmental regulators would narrow down proposed routes for any new tollways, but that state officials will determine where the roads are built.

"Ultimately, the state of Texas will have the final call," Black said.

The North Texas officials, including Fort Worth Mayor Mike Moncrief and state Sen. Kim Brimer, want Cintra Zachry to rethink its plans to route new toll roads well east of Dallas. Such a move would encourage so-called leapfrog development away from the urban centers and into rural prairie, officials told the commission.

Cintra is a Spanish-owned company; Zachry is based in San Antonio.

Strayhorn used her news conference not only to chide Williamson's response, but also to demand that Perry instruct the transportation commission to release all portions of its contract to build toll roads connecting San Antonio to North Texas over the next decade. The projects would be built with private funds and would be worth an estimated $6 billion to the consortium, which would pay the state $1.2 billion to collect tolls for 50 years.

A year ago, Texas Attorney General Greg Abbott ruled that the contract must be made public. But the consortium and the transportation commission have filed suit to overturn that ruling on grounds that it contains sensitive proprietary information.

Black said that the bulk of the contract is accessible on a state-operated Web site. But like any state deal with a private concern, information that could compromise a company's profitability is protected, he said.

"Carole Strayhorn is angry and wants attention so she launches a shrill, trumped-up attack," Black said.

Black also resurrected Strayhorn's archived news releases from the late 1990s and early 2000s that show Strayhorn -- then a Republican -- had been an early champion of toll roads to ease urban congestion and an advocate of increased foreign investment to boost the Texas economy.

In January 2001, her office urged the transportation commission to "adopt innovative financing tools, such as Grant Anticipation Revenue Vehicle (or GARVEE bonds), build more toll roads and tap into a new line of credit through the Transportation Infrastructure Finance and Innovation Act," according to one document distributed by Black.

Strayhorn said that Perry's toll-road plan, the Trans-Texas Corridor, is far more aggressive than anything she has proposed.

"Perry's ... Trans-Texas Corridor, which I call a trans-Texas catastrophe, is going to be 4,000 miles long," she said. "More mileage than Texas' 3,200-mile share of the interstate system."

Perry has touted the proposal as a visionary strategy involving highway and rail construction projects designed to ease Texas' burgeoning traffic congestion.

John Moritz, 512-476-4294

© 2006 Fort Worth Star-Telegram:


Wednesday, May 31, 2006

Strayhorn needles Gov. Perry and his TxDOT appointees for withholding public information about the Trans-Texas Corridor

Strayhorn blasts Perry over toll road contract

May. 31, 2006

Associated Press
Copyright 2006

AUSTIN - Independent candidate for governor Carole Keeton Strayhorn chided Republican Gov. Rick Perry on Wednesday for keeping secret the details of a state contract with a private company building Texas' colossal highway toll system.

It's been exactly a year since Attorney General Greg Abbott ruled a contract between the state transportation department and Cintra-Zachry is public information, Strayhorn said.

"We need government in the sunshine," Strayhorn said. "I'm calling on Gov. Perry to order his transportation department to drop its lawsuit and release to all Texans the secret contract with a foreign company."

Cintra-Zachry, the Spanish and American partnership working on the first phase of the Trans Texas Corridor highway system, and the Texas Department of Transportation went to court to keep parts of the deal sealed.

Robert Black, a spokesman for Perry's re-election campaign, said Strayhorn is merely keeping up her tactic of criticizing the governor.

"We've all been down this road before: Carole Strayhorn is angry and wants attention so she launches a shrill, trumped-up attack," Black said.

Uproar over the governor's Trans Texas Corridor has emerged as a leading campaign issue for Strayhorn, who has appeared at anti-toll road rallies. On Wednesday, some anti-toll activists and Hill County officials joined Strayhorn at a news conference, nodding in agreement with her.

She denounced the recent statements of the Texas Transportation Commission chairman who told North Texas leaders that "if you aggressively invite the private sector to be your partner, you can't tell them where to build the road."

"Texas property belongs to Texans, not foreign companies; Texas freeways belong to Texans, not foreign companies," she said, adding that Texans won't sit by and let the governor "cram toll roads down our throats."

Black, Perry's spokesman, said that in 1999 Strayhorn praised foreign investment in Texas. He also said most of the Cintra-Zachry contract is available online to the public, minus the company's proprietary information.

Cintra-Zachry reached a $7.2 billion deal with the state last year to develop the first phase of the Trans Texas Corridor - a traffic route running roughly parallel to Interstate 35.

The overall plan calls for 4,000-plus miles of tollways and railways across the state that would incorporate oil and gas pipelines, utility and water lines and even broadband.

Strayhorn, Democrat Chris Bell and independent Kinky Friedman, Perry's major opponents, all have criticized the toll road plan.

On another front, Bell criticized Perry Wednesday for allowing the recent special legislative session to focus more on property tax cuts than on school improvements.

"I'm all for property tax relief ... that is not where the debate about public school education here in Texas begins and ends," Bell said, speaking to a group of high school students with the Junior Statesmen of America.

Bell said the state must give schools more money for increasing access to technology and reducing class size. And, though the Legislature approved a $2,000 raise for teachers, Bell said it would take $6,000 to bring teacher pay in Texas to the national average.

"That is not a serious approach to trying to attract or retain or teach our young people here in the state of Texas," Bell said.

In response, Perry's Black said Bell has never offered a plan to pay for a $6,000 teacher pay raise.

When signing new school funding legislation in Houston earlier in the day, Perry said the law rewards all teachers and, with its merit pay system, provides additional money for teachers who have "the greatest impact" in the classroom.


Associated Press writer April Castro contributed to this report.


Kelley Shannon has covered politics and government in Austin since 2000.

© 2006 The Associated Press:


“Leaders of both major political parties can't be taken seriously.”

Dobbs: President, Congress ignoring crises

May 31, 2006

By Lou Dobbs
CNN, Copyright 2006

NEW YORK -- Libertarian fatalism has infected and afflicted the leaders of both political parties, and none of us should take seriously the partisan posturing from either the Republicans or Democrats.

President Bush believes in the mystical power of free markets to solve seemingly every domestic public policy issue, and the president's faith-based economic policies, including so-called free trade, have led us to higher record trade and budget deficits.

Sen. John Kerry, D-Massachusetts, is still in a post-election campaign that is attracting the amount of attention today that it did in his failed attempt for the presidency in 2004. And while he's still fighting the swift boat controversy, he has not articulated a national economic strategy.

The Senate Majority Leader, Sen. Bill Frist, R-Tennessee, says he wants border security first and then pushes through an illegal immigrant amnesty bill. The Minority Leader, Sen. Harry Reid, D-Nevada, between attending boxing matches for free, believes requiring that English be our national language is racist.

Sen. John "Straight-talkin' " McCain, R-Arizona, is beginning to take on the form of a political pretzel as he shapes his pandering for a run for the 2008 presidential election. And Sen. Ted Kennedy, D-Massachusetts, is now lined up with corporate America in supporting the onslaught of cheap foreign labor into this country while forsaking his party's historical alliance with working men and women and their families.

These men are jaw-dropping, awe-inspiring symbols of their respective party's lack of commitment to truth, the American Dream and our nation's middle class. How are we supposed to take these political leaders and the parties they represent seriously?

The answer is obvious.

As the midterm elections approach, both political parties will be treating us to their usual propaganda blitzes on wedge issues such as gay marriage, abortion, gun control and the pledge of allegiance. But it's unlikely either party will articulate policy positions on the issues of urgent importance to our middle class and those that aspire to it. Those issues include, of course, a number of outright crises that the president and Congress are ignoring, rather than resolving.

The war in Iraq continues to cost American lives and about $6 billion a month. And rather than enunciate a clear strategy for victory, the president asks us for patience while assuring us there will be more losses and challenges ahead. The Democrats stand all but mute.

Our public education system is failing nationwide. While SAT scores decline, teachers in every state fail competency exams, and our high school dropout rate shows no sign of real improvement. Both parties point to their bipartisan bandage, No Child Left Behind, rather than propose real and immediate solutions.

Both parties are looking upon border security as bargaining leverage in corporate America's quest for cheap labor and amnesty for illegal immigrants. The skyrocketing cost of health care and a college education continues to put undue pressure on the already constrained budgets of most middle-class families. And still there is no national plan for the urgent development of alternative energy, nor even a call from either party for conservation.

As we move toward the midterm elections, there is little question that these critical issues will be foremost in the minds of most voters. And the months ahead provide an opportunity for both political parties to commit themselves to true governance and the development of public policies that resolve issues rather than perpetuate them.

We can only hope and, ultimately, vote.

© 2006 CNN:


Tuesday, May 30, 2006

"Increasing frustration with congestion trumps privacy."

truth be tolled - pt. III

Oregon may get some mileage out of fee experiment

The innovative, high-tech exploration of making drivers pay for when and where they go may make cents as states look to wean themselves from the gas tax.


By Jeffrey Leib
The Denver Post
Copyright 2006

Oregon has started a program to charge select motorists in the Portland area a fee of 1.2 cents for each mile they travel within the state instead of the 24-cents- a-gallon state tax on gasoline.

Oregon's experiment with mileage-based road pricing - which goes well beyond traditional tolling - may be the model that allows states to wean themselves from the gas tax in the next decade or two, transportation experts say.

Later in the year, some volunteers in the state's road-pricing experiment will be separated into a group that is charged 10 cents a mile for driving during rush hour on weekdays anywhere in metro Portland, and 0.43-cents-a-mile for other in-state travel, said Betsy Imholt of the Oregon Department of Transportation.

For more than 50 years, federal and state taxes on gasoline have been the primary means of paying for highway construction and maintenance in the United States.

Yet the federal gas tax of 18.4 cents a gallon has not been increased since 1993, allowing inflation to steadily erode its buying power.

Similarly, legislators in many states, including Colorado, have been unwilling to raise state taxes on gasoline. In Colorado, it's 22 cents a gallon.

Other factors have eaten into the value of the gas tax, including improved fuel economy and consumers' growing acceptance of alternate-fuel vehicles.

"We need a system we can count on," said James Whitty, manager of the Office of Innovative Partnerships and Alternative Funding in the Oregon Department of Transportation.

In the state's experiment, 280 volunteer motorists have allowed their vehicles to be outfitted with Global Positioning System devices that rely on satellite signals to tally miles driven.

The devices, which distinguish between miles driven inside Oregon and outside the state, will bill motorists only for in-state miles.

They also can verify miles driven in metro Portland during rush hour, Whitty said.

To bill drivers participating in the test, Oregon officials have installed electronic-data readers at several gas stations, so when motorists stop at the pump for fuel, there will be a wireless transfer of the mileage data.

That data plugs instantly into the gas station's point-of-sale system, levying the mileage fee and deducting the state gas tax, Imholt said.

State officials will review whether the participants "change their habits" and drive less at rush hour, or even less overall, to reduce their road-use charge, she said.

Oregon officials acknowledge that because the test substitutes either a flat 1.2 cents a mile, or the 10-cent rush hour/0.43-cent charge, for the state gas tax, it doesn't differentiate between vehicles getting good or poor fuel economy.

If the test of mileage-fee technologies is successful, the Oregon legislature could install a more complex system of road- use fees that could vary the charge based on fuel economy or other factors, Whitty said.

Collecting mileage charges at the fuel pump ensures that everyone pays something for using the roads.

The gas station will bill drivers the mileage fee if their account is current. Alternatively, the state gas tax will be levied at the pump for those who don't have the tracking equipment or are delinquent in their payments to the state.

Non-residents driving on Oregon roads would pay the state tax until a nationwide system of mileage fees can account for interstate travel, officials said.

The technology is available to account for lots of variables in auto usage, said Joseph Giglio, a professor of management at Northeastern University in Boston who has written extensively about transportation funding.

"We can vary the rates depending on how much air pollution their vehicles generate and whether they choose to make their trips during periods of heavy travel demand ... or when demand is lower," Giglio said.

The task of switching to road-use charges should get easier by the end of this decade as auto manufacturers install electronic transponders and GPS devices as standard equipment in vehicles, proponents of mileage- based pricing say.

Some say widespread installation of transponders and GPS devices in vehicles could infringe on the privacy of drivers, by allowing someone in a control room to monitor and track a car's movement.

Whitty, who leads Oregon's experiment, said the state responded to concerns about satellite monitoring by ensuring that the GPS receivers in vehicles do not send out signals that can be tracked.

The devices are merely repositories for stored mileage data, he said.

"No location data is transmitted anywhere or stored in the device or elsewhere," according to the program's fact sheet. "The only data collected and transmitted is the mileage, which is sent to the gas-pump reader through a radio frequency that can only travel about 8 to 10 feet."

Northeastern's Giglio and other transportation experts say threats to privacy are exaggerated and can be managed.

He adds: "Increasing frustration with congestion trumps privacy."

Staff writer Jeffrey Leib can be reached at 303-820-1645 or

© 2006 The Denver Post:


"Tolling plan depends on continuing congestion in the free lanes to lure motorists into the pay-for-use lanes"

truth be tolled - pt. III

A fork in C-470

May sway how state adds lanes

By Jeffrey Leib
The Denver Post
Copyright 2006

The battle over an aging 12.5-mile section of C-470 could determine the future of toll roads in Colorado.

For the Colorado Tolling Enterprise's first major project, transportation officials have targeted the stretch of C-470 between Interstate 25 and South Kip ling Parkway for new toll lanes costing $325 million.

Yet local officials and many residents in the C-470 corridor say the state's proposal takes an expensive approach to congestion that favors a minority of motorists who can afford high tolls, leaving most drivers mired in clogged, adjacent, free lanes at peak travel times.

Consultants hired by Douglas County say the Colorado Department of Transportation's C-470 toll plan has no national precedent and is based on inflated traffic and toll-revenue forecasts.

Bloated predictions turned other toll projects across the country into precarious ventures, they say.

The C-470 plan "relies upon a risky, untested financing scheme that ... is unlikely to succeed," Douglas County representatives said in an April 28 letter summing up the county's dissection of a state study favoring toll lanes.

A default by the Colorado tolling authority "on the repayment of bonds is a likely result," they added.

"Our study shows that, financially, this roadway will never pay for itself," said Douglas County Commissioner Melanie Worley, a leader of the opposition to C-470 toll lanes.

A draft of a new Federal Highway Administration study on U.S. toll projects, obtained by The Denver Post, says tolls for express-lane ventures "are presumed only to contribute a portion of the cost of construction and operations."

Most of the express-toll-lane projects surveyed "are not self- supporting," the study said.

Peggy Catlin, deputy executive director of CDOT and acting director of the toll authority, said C-470 toll lanes would be built with "non-recourse" bonds, so private investors who buy them would suffer from a default, not taxpayers. It's also likely the bonds would be insured, officials add.

The plan calls for new toll lanes in the median of C-470; current untolled lanes would remain free.

Douglas officials have proposed an alternative to the toll scheme: a regional sales-tax increase that would pay for new non-tolled lanes on C-470 and other area highways.

Of congestion on C-470, Worley said, "Adding even one general-purpose lane in each direction and improvements to local roadways improves the situation better than two toll lanes in each direction."

CDOT disputes that claim. If only one new non-tolled lane is added in each direction, they might be jammed at rush hour by the time they're finished, said CDOT spokeswoman Stacey Stegman.

The fight between state and local officials over tolling is part of a larger national debate over how to pay for road construction and maintenance when the gasoline tax is losing its value.

Better fuel economy in cars and increased sales of alternate- fuel vehicles are eating away at the tax's usefulness.

CDOT expects to be short $40 billion for road construction and repair over the next 25 years.

The agency and its tolling offshoot have turned to pay-for- use highway lanes to make up a portion of the shortfall.

The toll proposal for C-470 has received the most attention, but state officials also are looking at adding new toll lanes to Interstate 70 east of the Mousetrap, Interstate 270, Interstate 225, Interstate 25 north of 80th Avenue, U.S. 36 and a new highway link between C-470 and the existing Northwest Parkway toll road.

Colorado is proposing "open- road tolling," a system gaining favor nationally that means all tolls are collected electronically through the use of vehicle transponders. There are no toll plazas and no cash transactions.

High-tech cameras are used to capture license-plate images of cheating motorists who try to use the toll lanes without transponders.

Can't keep adding lanes

The state's recently released $8 million environmental study of possible C-470 improvements says express toll lanes are the quickest way to get relief for frustrated commuters in the congested corridor.

A public-opinion survey commissioned by the toll authority found three-quarters of respondents prefer tolled lanes over the option of raising taxes to build new free lanes.

Colorado plans to selectively add toll lanes to some of the state's busiest highways because the old model for expanding roads is outdated, Catlin said.

"You can't continue to build your way out of congestion; you can't keep adding lanes," she said. With "managed" toll lanes, the state can control traffic volumes by varying pricing and "you always have a part of the system that is uncongested."

Before Colorado officials can proceed with the C-470 proposal, they need the Denver Regional Council of Governments to include the toll lanes in the regional transportation plan.

If DRCOG approves, the tolling authority still needs to spend up to $1 million more on a detailed traffic and revenue, or T&R, study of the C-470 toll lanes.

The T&R analysis will decide whether Colorado can win top ratings for bonds that will pay for construction of the new lanes, Catlin said.

High ratings are needed to sell the bonds to private investors.

Wilbur Smith Associates has been the toll authority's traffic and revenue consultant on earlier reviews, and it's expected the firm would bid to do the detailed, "investment grade" T&R study.

The company is one of three in the country that do the bulk of toll analyses.

A Denver Post review of 23 toll projects prepared by Smith and the other two firms found that 15 of the 20 that had been open three years had failed to reach the companies' projections.

Knowing it has been relatively easy for toll authorities to get traffic and revenue forecasts that favor construction of the roads, Douglas County officials set out to strangle the toll concept for C-470 well in advance of a final traffic study.

The county hired its own highway experts to examine the state's environmental review, and Douglas County's consultants say CDOT's high-priced toll proposal will more likely perpetuate gridlock than alleviate it.

The C-470 toll plan is unique in the country in that the express toll lanes will have a series of entry and exit points along their length, said Norman Marshall, Douglas County's lead consultant, who heads a Vermont- based transportation firm called Smart Mobility.

Numerous access points will create a "weave" of vehicles between entry ramps, free lanes and toll lanes that is likely to slow traffic and introduce backups and accidents to a system that was supposed to relieve congestion and improve safety, Marshall said.

Critics of the C-470 plan say construction of toll lanes will only cut in half the number of daily hours that motorists are stuck in bumper-to-bumper congestion in adjacent, free lanes - from 10 hours a day if no improvements are made to five if toll lanes are added.

If the same number of non- tolled lanes are added instead of express toll lanes, peak-period congestion is eliminated, the state's study shows.

In commenting on CDOT's C-470 study, the U.S. Environmental Protection Agency noted the tolling scheme would leave non-tolled lanes congested, "making the express-lane alternative reliable only for those that can afford the toll."

Douglas officials say they too are troubled that the tolling plan depends on continuing congestion in the free lanes to lure motorists into the pay-for-use lanes.

Arapahoe County, Lone Tree, Aurora, the Highlands Ranch Metropolitan Districts, Highlands Ranch Community Association, Highlands Ranch Chamber of Commerce and Park Meadows Metropolitan District have joined Douglas County in opposing the C-470 toll plan.

When compared with the alternative of adding non-tolled lanes to C-470, tolling "is significantly more costly, provides a lower quality of service, increases congestion and delays, and has more impacts on the area's citizens, businesses and local governments," Lone Tree Mayor Jack O'Boyle said in an April 27 letter opposing the state's proposal.

"The congestion essential to successful toll lane revenue production will have the effect of redirecting traffic away from Lone Tree retail stores in the vicinity of C-470.

"... The congested nature of the facility will create a strong disincentive to businesses considering locating within the affected area."

The South Metro Denver Chamber of Commerce is one of the few entities that hasn't panned the toll option.

"The chamber wants something done; we have to widen that road," said John Brackney, the group's president and a former Arapahoe County commissioner.

Tolling would allow C-470 to be widened "sooner rather than later," but if Douglas County and other local governments are willing to put a sales-tax increase before voters to pay for widening with non-tolled lanes, the chamber is open to that option, Brackney said.

Douglas County's own public- opinion survey contradicts the state's findings that citizens favor tolling over taxes by a 3-1 margin. The county's survey shows 51 percent in support of raising the sales tax for more free lanes on C-470, while 39 percent support a toll lane alternative.

Douglas and state officials have criticized each other for skewing their surveys to get the results each side wanted.

Not everyone can benefit

Some analysts say open-road tolling plans such as Colorado's can cause hardships for those without credit cards needed to acquire transponders.

"A significant number of potential users do not have the credit card and bank accounts required to obtain electronic transponders and benefit from them," said transportation engineer Emily Parkany, who has written about transponder use, road pricing and "environmental justice."

About 20 percent of U.S. households do not have a credit card and 10 percent lack a bank account, said Parkany, who studied the issue while she was assistant professor of civil and environmental engineering at Villanova University.

Still, motorists of all income levels can benefit from express toll lanes such as those proposed for C-470, Parkany said, especially when someone is in a hurry to catch a plane or get to their child's soccer game.

"They are a good option for people, an option that is not forced on us," she said.

CDOT's Catlin echoes that theme.

"It is about choice," she said.

State officials acknowledge that their toll plan would still leave drivers in C-470's non-toll lanes jammed in traffic at times.

But adding express lanes is better than doing nothing when there is no money available for constructing non-tolled pavement, they say.

And because privately funded toll road construction would most likely not require an expensive and time-consuming environmental impact statement, new lanes could be built much sooner - as early as 2009 - than non-tolled lanes, Catlin added.

Jim Brady, a consultant to CDOT and project manager on the C-470 environmental study, rejected Douglas County's contention that the weave of motorists between toll and non-toll lanes will not work, leading to backups and accidents.

Engineers selected sections of C-470 for the weave where motorists will have adequate distances to make the move between lanes safely, Brady said.

"We're satisfied it's designed appropriately," Brady said.

Some transportation experts say Colorado's effort to promote open-road tolling should be only an interim solution before states move to a model that charges motorists directly for every mile they drive.

Oregon is experimenting with mileage-based fees as a replacement for the state's gas tax.

Mileage-based road fees could be more a "flexible, equitable and useful" way of charging for highway use than the gas tax, which is a "blunter, inferior" instrument, said Martin Wachs, director of transportation, space and technology for the Rand Corp.

With road fees, "charges are more carefully aligned with costs," Wachs said. Mileage- based pricing can be varied to bill motorists more for travel at rush hour or for driving a vehicle with low fuel economy.

Before joining Rand last year, Wachs was professor of civil and environmental engineering at the University of California, Berkeley and director of its Institute of Transportation Studies.

Whether CDOT's toll plan is interim or not, some local officials in metro Denver question the strategy.

Golden is fighting CDOT's suggestion that toll lanes might be a good way to complete the missing link in a beltway around Denver, connecting the existing Northwest Parkway toll road with C-470's northern terminus.

The state calls proposed new lanes in this area the Northwest Corridor.

An ulterior motive seen

Golden City Manager Mike Bestor said the impetus for the road is not to relieve traffic congestion but rather to promote commercial construction along the corridor.

"Toll roads work when they are built to solve a traffic problem, not when they are built to spur development," he said.

Bestor also criticized the "induced congestion" on adjacent roads that state officials need to make toll lanes economically feasible.

Aurora officials say CDOT's proposal to widen I-225 with toll lanes from South Parker Road to I-70 also is ill-conceived.

Adding toll lanes to the median of I-225 may fit well with the state's plan to build a network of pay-for-use highways in metro Denver, but it would not be good for businesses and residents in the I-225 corridor, Aurora Mayor Ed Tauer said.

For Aurora residents and business owners, access to the area would be "permanently crippled" by construction of toll lanes that favor through traffic and push more congestion onto local arterials, Tauer said. "We think it's a bad idea."

For the past 15 years, E-470 has been the model of tolling in Colorado. Two and a half years ago, the Northwest Parkway opened with a similar design.

The ribbons of tolled asphalt were carved through empty land, and each found that traffic lagged optimistic projections, like so many other U.S. toll projects in recent decades.

The two toll highways expected to generate economic growth in their corridors, which in turn would add vehicles to the roads. But growth came slower than anticipated for E-470, and the Northwest Parkway still is waiting for development that could crowd the road with cars.

In contrast, Colorado's plan for new toll lanes aims to relieve jams on some of the state's busiest highways.

"We think this is a very important congestion-management tool," CDOT executive director Tom Norton said at a meeting of local government officials last week.

There is limited experience with such a model nationally.

In Southern California about 10 years ago, express toll lanes were added to a 10-mile stretch of State Route 91, linking Orange and Riverside counties.

But Marshall, Douglas County's consultant, says the California road amounts to a tube, with entry and exit only at each end - unlike the plan for C-470.

Without on- and off-ramps along its length, a toll highway is far easier and less expensive to construct, maintain and operate, he said. With the State Route 91 model, motorists avoid the weave across lanes.

To build non-tolled lanes instead of express toll lanes, cities and counties in Denver's south-metro area are looking at forming a regional transportation authority that could levy its own taxes or fees to pay for the expansion.

Instead of paying $325 million for two toll lanes in each direction of C-470, one non-tolled lane each way could be built for as little as $25 million to $50 million, Marshall said.

CDOT answers that the price tag for non-tolled lanes does not include ongoing operating and maintenance costs or money to upgrade C-470's existing lanes, while the toll alternative does.

Worley, the Douglas County commissioner, said local officials only want time from the state to pursue the non-toll option.

CDOT officials say they must know by October if the regional taxing authority will be a viable alternative to tolling.

"I would like to encourage CDOT or the tolling enterprise just to back off and allow the local governments to proceed with this investigation," Worley said. "If we come up with a solution, explain it to citizens and they vote yes, it will take care of the problem."

Staff writer Jeffrey Leib can be reached at 303-820-1645 or

© 2006 Denver Post:


Monday, May 29, 2006

"Is there fraud invlolved? I think there is."

truth be tolled - pt. II

No 2-way street

When landowners help pay the toll


By Chuck Plunkett
Denver Post
Copyright 2006

Greenville, S.C. - A four-lane toll road cuts through what used to be Katherine Ashmore's five-bedroom brick home.

From the double-wide manufactured house she bought with the relocation money - she says it wasn't enough to rebuild with brick - Ashmore watches the intermittent traffic rumble past and marvels at the sight.

She has lived in the countryside outside Greenville all her 86 years. Since the road opened five years ago, she has been on it only once, she says, adding that few of her neighbors can tolerate spending the $2 fee to drive its 16 miles.

"Nobody thought it was a good idea," Ashmore said. "Nobody believed that it would work. Nobody believed that it would pay."

Nobody, that is, except the companies that performed the traffic and revenue projections for the road and had an even larger financial stake in seeing it built.

Ashmore's story and the story of the toll road called the Southern Connector have been repeated in similar forms from Florida to Colorado as developers and governments increasingly turn to toll roads to spur growth.

In Greenville, an authoritative but flawed set of traffic and revenue projections prepared by the nationally known company Wilbur Smith Associates helped persuade investors in 1998 to loan a newly created toll authority $200 million. Greenville's Southern Connector was born.

From that $200 million, Wilbur Smith collected more than $12 million for a pair of contracts the authority promised the company if the bonds were sold - even as the company prepared the revenue projections that justified the loan.

The arrangements raise questions about the objectivity of the traffic and revenue study, experts and critics say. A Denver Post review of 23 toll roads built or under construction since 1985 found that five of them sold bonds based on projections prepared by companies promised or granted future business after their projections made sense to investors.

Wilbur Smith, Vollmer Associates and URS Corp. were the only forecasters hired in the projects reviewed. While five of their projections came out at or better than the revenues expected by the third year of the roads' existence, the other 15 open that long left toll authorities scrambling to refinance or cover their debt in other ways. In the worst case, taxpayers got stuck with what was supposed to be a private road that, at the current rate, may take decades to pay for itself.

"Something as major as the traffic study being done by a company maybe having a conflict of interest is pretty significant," said John Macko, who bought $20,000 of Greenville's uninsured bonds as part of his private retirement account and has since watched the value of that investment drop to nothing on the secondary market, where he has failed to find bidders.

The upstate New York bankruptcy lawyer says he read the Southern Connector's "official statement" sent to prospective investors. Though it discloses Wilbur Smith's various roles, it does not specifically spell out that the dual roles might be considered a conflict.

Macko didn't connect the dots until asked about the arrangements in a recent interview.

The revelation left Macko feeling betrayed.

"I thought they were objective," he said. "I certainly would have taken that with several grains of salt."

Now he's hoping the authority can sell new bonds - and pay him off.

Uprooted and upset

When the Southern Connector was built, it took away the farmland Ashmore and her husband, James, had tilled with a horse and plow in their youth. The road took away the home they had shared since 1941.

The road took 152 properties and meant 42 families or individuals had to move, including two of Ashmore's three sons.

One of those sons, Odell, had saved for 20 years to put in a sod airstrip on his land for a 1960 Cessna 182, a beater plane he bought in 1990, refurbished, certified and learned to pilot.

"That was my dream," he said. "To own my landing strip on my own little property and my own plane."

Six months after he had it all together, toll road officials gave him his condemnation papers. Some people, like Odell's mother, sold, fearing the process. She got $88,000 for property valued as high as $140,000, Odell said.

It was supposed to be all for the greater good, to promote economic development in a rural area and provide better access to an industrial park.

But so far, Katherine Ashmore said, "it's not turned out the way they thought it would."

The road has struggled ever since it opened in March 2001. Though Wilbur Smith forecast that revenue in 2005 would be $13.2 million, actual collections were only $4.7 million - or less than 36 percent of projections.

George Price, who fought the road, says the missed projections were a clear result of overreaching.

"They needed numbers in order to be able to match the bond- revenue figures," Price said.

The former Lakewood police sergeant lived in Greenville during the road's financing and construction, and he reviewed hundreds of documents after filing a lawsuit to fight the project. He still keeps them in stables on his new property in Charlotte, N.C.

"Why else would you become (part of) a team that's bidding the project?" Price said. "Where's your independence?

"Is there fraud involved? I think there is."

Wilbur Smith forecaster Ed Regan said fraud was certainly not involved. The company normally avoids deals with companies it also is providing with traffic studies, but in this case he said he established a firewall between his office in New Haven, Conn., and the company's headquarters in Columbia, S.C.

But critics ask how sturdy that firewall might have been, considering that Wilbur Smith's then-chief executive and board chairman, Robert "Bud" Hubbard, worked with other investors to bring the Southern Connector to town and was considered the "kingpin" to the project's success by the president of the construction company that built the road.

Significant connections

In early 1995, Hubbard - who is now deceased - called Robert Farris, a former head of the Federal Highway Administration and deputy administrator for Presidents Reagan and George H.W. Bush.

Hubbard had gotten to know Farris before his stint in Washington, as Wilbur Smith had opened an office in Tennessee during the time Farris served as its highway commissioner.

A regional salesman of swimsuits for competitive teams, with no road-building experience, Farris had run Richard Nixon's campaign in Tennessee and remained an active Republican backer.

He accepted then-Tennessee Gov. Lamar Alexander's request to leave sales for highways from 1981 to 1985.

Farris later joined the Reagan administration.

Not long after Hubbard called to talk about a toll road in Greenville, Farris became president of the company assembled to build it.

Farris and other key players held a meeting near the end of 1995 in Wilbur Smith's Columbia headquarters with Hubbard and three other Wilbur Smith officers.

By that time, it already had been decided that Wilbur Smith would provide revenue forecasts and get a contract for designing the road's toll- collection system, and a subcontract to do significant engineering work, according to documents Price obtained.

One of those documents was an agreement reached in July 1995 that explained Wilbur Smith would update preliminary feasibility studies, stating that the company would provide "an
array of analyses for traffic and revenues to embellish the feasibility studies undertaken"

One of the Wilbur Smith officers at the meeting was Herman Snyder, who then supervised the company's South Carolina projects. Also present were Samuel and Thomas Thrift, who ran the Thrift Brothers construction company that would build the road.

In 1991, Snyder resigned as the state's chief highway engineer after he pleaded guilty to a minor misdemeanor charge in response to a charge that he improperly accepted a $2,000 cash gift from Thrift Brothers.

The construction company lost its licenses to bid for state projects for several months. The brothers were fined and required to perform community service.

Now Snyder was at Wilbur Smith, working with Thrift Brothers to bring the Southern Connector to Greenville.

In an interview at his Greenville home, Farris defended the arrangements. He said that Thrift Brothers was well- regarded and did excellent work. He said Wilbur Smith - as well as Vollmer and URS - were excellent companies with enough professional integrity to resist any external pressure.

"I would not want to be party to any charge of an ... optimism bias," Farris said, adding that researching such arrangements was "a waste of time."

The financing system, he said, is filled with checks and balances, chief among them the bond-rating agencies, which scrutinize the projections carefully.

And during the Southern Connector's meetings with the rating agencies before releasing their official statement to investors, Farris said the bulk of the questions focused not on the projections but on whether the road could be built with the money loaned it.

"My concern was, 'Could I get it built with that kind of money?"' Farris said.

Regan, the Wilbur Smith officer in charge of the forecasts, said he was completely unaware of the arrangements - by choice.

"We did the study exactly like we did every other study," Regan said. "We always do the study independently."

So, with all those precautions in place to prevent bias, how did Wilbur Smith's projections miss by 65 percent?

Regan blames a downturn in the local manufacturing economy, which was closing textile mills. Using federal labor statistics, Regan shows that when the traffic study was done in 1997, there were 60,000 manufacturing jobs in the Greenville area, and nearly that many still existed when the road opened in 2001.

Soon after, the employment level started to fall. As 2006 started, there were only 44,600 manufacturing jobs.

"I would never, never, never overestimate anything," he said.

But a longer view of federal Bureau of Labor Statistics records shows that manufacturing jobs were falling in Greenville long before Regan started on the projections for the Southern Connector.

From 1990 to 1996, manufacturing employment in the area fell by 4,300 jobs, from 64,300 to 60,000.

Still, as Regan prepared the projections for the road, he used job-growth assumptions provided by local governmental forecasters that proved to be optimistic.

And those statistics played a key role in the traffic model he built for Wilbur Smith.

"It's a very uncertain process," he said. "The biggest risk factor is uncertainty about economic growth."

But Regan had agreed with the local forecasters - and even found their projections to be conservative - in Wilbur Smith's 1997 traffic and revenue study.

"Not only were the (local officials') forecasts below the historical trend line," the study said, "but there is at least one other forecast that future employment growth will exceed the historical trend."

Sticking with URS

In Florida, the state tolling authority has worked with

URS since it opened the Florida Turnpike in the 1950s. In 1988 the authority hired URS to serve as its in-house consultant, and over the next 14 years the state paid the firm more than $50 million to help it build its contemporary system. At the same time, URS generated projected-revenue figures for several planned toll roads - and on some of them gained additional work.

Florida continued to renew its contract with URS even as the company missed projections.

The Seminole Parkway's first section, which opened in 1994, missed its first full-year projection by more than 54 percent.

The Veterans Expressway, which opened in 1995, missed its first full-year projection by 42 percent.

URS got one right, with Florida's Southern Connector Extension (unrelated to the South Carolina road of a similar name) - which joined another toll road near Kissimmee - and surpassed expectations in 1997 by 2 percent. The company then missed on the Polk Parkway a few years later by 32.5 percent.

The state's tolling officials hired the company to do other work on the roads being built based on URS's optimistic projections.

The state gave URS $9 million for engineering work for the Polk Parkway and an extension of the Seminole Parkway.

Further, the consultant bought another company that was designing tollbooths on the Polk Parkway and was paid $5.3 million to finish the work - though its revenue studies had been used to justify the road's existence.

In the fall of 2003, URS released a traffic study used to sell bonds on the Western Beltway Part C, a toll road now under construction.

The state already had granted URS a contract in the summer of 1997 for design work on the road.

In that 1997 Western Beltway contract, the state said it could stop the work with 60 percent of the designs completed if the authority decided that the project wasn't economically feasible. That didn't happen.

The bonds sold, and URS has been paid $5.2 million to date for its design work on the project.

URS declined to comment.

The director of the state's tolling authority, James Ely, said in an interview that Florida would not allow its traffic consultant to gain additional work on a road it was studying, adding: "You don't want them to color their estimates."

Asked about the dual roles URS assumed on the Polk Parkway, Seminole Parkway and Western Beltway, Ely dismissed any questions about possible conflicts of interest.

"This notion that URS, if they do a traffic and revenue study, might be more liberal if they might get work, I don't buy that," he said.

Ely also said that URS got its estimates "on the money," until asked about several misses documented in this series.

In contrast to the opinions of several Wall Street analysts, Ely said, "I think it's shortsighted to look at its projections in its first years."

Because Florida's authority benefits from a large, statewide system, money it collects from stronger, established roads has been able to cover the shortcomings of the others, he said.

The state also has engaged in several refinancings and recalibrated its traffic model more conservatively for those roads that missed.

A dramatic failure

Outside the border town of Laredo, Texas, a toll road cuts through 91 acres of Adolph Puig's 2,580-acre ranch.

"How'd you like to see a country club right here?" Puig said, standing on the road's shoulder and pointing to a stretch of red dirt, prickly pear cactus and mesquite, freshly green the second day of spring.

Puig donated the 91 acres to the private toll road venture and added some Texas-style sweat equity. With a surveyor in tow, Puig, now 74, spent weeks on a tractor carving the path of the highway's centerline through 22 miles of ranchland under a summer sun.

Opened in October 2000 by several local families, including Puig's, the Camino Colombia toll road failed so dramatically that it actually closed for five months.

In this case, the forecaster - URS - wasn't hired to do additional work, but its projections proved wildly optimistic. Investors who bailed out of the project say they doubted the projections from the beginning and worried that supporters were being too optimistic about their chances.

Even Puig, who donated land and stayed in hoping that someday he or his grandchildren would get a cut of toll profits, shakes his head at the projections.

"Let me put it this way," he said. "They say they were going to build the road and get the money. They got the money and built the road."

The two-lane highway - built with $75 million in loans from a pair of East Coast life-insurance and investment companies, and another $15 million in donated land and capital by families such as Puig's - missed its revenue projections by an estimated 94 percent, by far the biggest miscalculation of the 23 roads reviewed for this series.

By January 2004, New York Life Insurance Co. and John Hancock Life Insurance Co. had foreclosed on the road. John Hancock bought it for $12.1 million at an auction on the courthouse steps.

And though during that auction the state's Department of Transportation had stopped bidding when the price exceeded $11.1 million, transportation commissioners changed their minds a few months later - after John Hancock closed the road.

The state bought the Camino Colombia for $20 million and reopened the road that August.

The $20 million investment means the state gained "an asset" in the Camino Colombia, said Gabriela Garcia, a spokeswoman for the Texas Department of Transportation, adding that it would cost much more to build the road now.

But at its current rate of collections - $504,270 in 2005 - it would take nearly 40 years for the road to pay for itself.

Now it is possible to stand on the road at high noon and not see a car or truck pass by for four minutes.

The road's frontman, Carlos Y. Benavides III, of a politically connected South Texas family that invested substantially in the project, told investors the road would benefit from the North American Free Trade Agreement and see 1,500 trucks a day in its first year.

"Ultimately, it's about getting people to feel comfortable about lending you the money," he said.

But in the road's first year, fewer than 75 truckers used the road daily.

"It's not a perfect science," he said.

Benavides blames the Laredo World Trade Bridge - which opened shortly before the Camino Colombia and doesn't charge a toll - for siphoning away the truckers he expected.

He says the state took too long to approve his project, which prevented the Camino Colombia from establishing itself before the city's new bridge opened.

And he blames the city for not requiring trucks hauling hazardous materials to use a bridge closer to the Camino Colombia - which he says the city had promised to do.

But the area got a road, and eventually, enough development will come to support it, he says.

As far as the lost money is concerned, folks here are somewhat circumspect.

"You tell me that people in New York are losing money," Puig said. "I lost 91 acres. ... They invest in everything. But I got a highway."

Staff researcher Barbara Hudson contributed to this report.

Staff writer Chuck Plunkett can be reached at 303-820-1333 or

© 2006 Denver Post:


Texas legislators have been more responsive to the lobbying of powerful developers than to average citizens


The pain of eminent domain

May. 28, 2006

Fort Worth Star-Telegram
Copyright 2006

It's been almost a year since the Supreme Court decided in Kelo vs. New London that bureaucrats may seize homes and businesses through eminent domain and transfer the land to private developers in the name of economic progress.

Although the Constitution says government may condemn land only for "public use," the court held that this term means the same thing as "public purpose" or "public benefit." Thus whenever a city council thinks it would "benefit the public" to snatch a house or small business and give it to Costco or Home Depot or any other company, it may do so, and courts will not intervene.

Americans reacted with outrage to the decision and urged state officials to pass laws protecting them from eminent domain. But so far this backlash has achieved mixed results.

Of the 16 states that have acted since Kelo was decided, only six -- South Dakota, Georgia, Indiana, Pennsylvania, Minnesota and Florida -- have imposed meaningful restraints on government power. Other states have either done nothing or have enacted laws so riddled with loopholes that they allow government to seize whatever property they consider "blighted."

Take Alabama, for example. When Gov. Bob Riley signed SB 68A into law, he proclaimed his state the leader of a "property rights revolt." Yet even though the law prohibits government from taking property merely for economic development, that restriction does not apply to property that is declared blighted. Blight is defined as "buildings ... which, by reason of dilapidation, obsolescence, overcrowding, faulty arrangement or design, lack of ventilation, light and sanitary facilities, excessive land coverage, deleterious land use or obsolete layout, or any combination of these or other factors, are detrimental to the safety, health, morals or welfare of the community."

Under such vague standards, virtually any neighborhood can be declared a blight, and any home or business located there can be seized and given to developers.

Compare this with Florida's new law, signed this month by Gov. Jeb Bush. It declares outright that "the prevention or elimination of a slum area or blighted area ... and the preservation or enhancement of the tax base are not public uses." If government wants to clean up bad neighborhoods, it has to do so in other ways -- by lowering taxes, for instance, or by making it easier to start new businesses, or by buying the land it wants fair and square.

Redevelopment officials insist that they need to be free to seize property to fix bad neighborhoods, but this just isn't true. Major developments routinely succeed without eminent domain: Disneyland was built without condemning property. Seattle just redeveloped much of its downtown without eminent domain.

Worse, government routinely causes "blight." By subsidizing idleness, failing to protect property rights and stifling job creation through burdensome regulations and taxation, government often chokes economic growth. And its anti-growth policies sometimes make it prohibitively expensive to construct new housing anywhere but on land already owned by someone else. There's something amiss when developers find it easier to cannibalize existing owners than to build new homes or shops on vacant land.

Voters in California, Michigan and Florida soon will have the opportunity to vote on ballot initiatives to protect their homes and businesses from eminent domain abuse. These initiatives are carefully crafted and contain no loopholes for "blighted" property. Alas, legislators in many other states have been more responsive to the lobbying of powerful developers than to the worries of average citizens who simply want their rights respected.

This is unsurprising. Eminent domain, after all, is a big industry. But if home and business owners are dedicated enough, they may once again gain control over a government that is currently more interested in directing the economy than in protecting our rights to the things we've earned.

Timothy Sandefur is a staff attorney at the Pacific Legal Foundation.

Timothy Sandefur's book, "Cornerstone of Liberty: Property Rights in 21st Century America," will be published this June by the Cato Institute.

© 2006 Fort Worth Star-Telegram:


Sunday, May 28, 2006

Governor Perry spins "tax cut" of $2.00 per month

Guv's funny tax numbers

May 28, 2006

Houston Chronicle
Copyright 2006

Memo to the average homeowner:

Don't spend that $2,000 Gov. Perry is promising you.

If you own a television and haven't seen the political commercials in which Perry touts recently enacted school property tax cuts, you soon will.

His campaign spokesman says they'll be running in a lot of markets for a long time.

Standing in front of a pleasant, modest house (or a school in another version), the good-looking governor touts the accomplishment.

As he speaks, large print echoes his words:

"$15 billion tax cut."

"Governor Rick Perry."

"$2,000 tax cut."

That last line accompanies him saying, "The average homeowner will receive a $2,000 tax cut."

If you, like many television viewers, turn away during commercials, you'll miss the small print on screen: "Over first three years."

Playing with funny money

On a radio ad making the same claims, Perry's first line refers to a "$15 billion tax cut over three years," but a bit later he doesn't mention that period when he touts the $2,000 cut for the average homeowner.

But it turns out even if you catch the three-year bit, the governor is playing with funny money.

It mainly has to do with how he values the "average homeowner's" house.

Perry chose to use the average sales price, as calculated by the Real Estate Center at Texas A&M University. That is $180,000 statewide.

But the average appraised value on which taxes are actually calculated is about $123,000 statewide.

The new tax law projects a cut of 17 cents per $100 of appraised value (not sales price) for the first year, and 50 cents in subsequent years.

The higher the value of the house, the greater the value of the tax cut.

One Coke a week

In Harris County, the average appraisal of a home is $140,578, says Guy Griscom, assistant chief appraiser for the Harris County Appraisal District. But the latest average sales price for the Houston area is $190,800.

The reason, explained Griscom, is that older houses at the low end of the price spectrum don't tend to sell. New homes, mostly priced between $200,000 and $250,000, make up a large portion of sales, he said.

"They're not building a lot of low-end housing," he said.

You can understand Gov. Perry's unfamiliarity with this notion. He doesn't get together much with people who live in the kind of houses that don't sell.

Texas Comptroller Carole Keeton Strayhorn said at a press conference the governor's numbers are nonsense. The average tax cut the first year will be just $52, or enough "to buy one more Coca-Cola out of a vending machine each week," she predicted at a press conference.

But Strayhorn is running against Perry for governor, so let's look at the figures of a non-candidate: Harris County Tax Assessor-Collector Paul Bettencourt.

He's even more pessimistic.

Bettencourt projects an average savings of a miniscule $23 next year, less than $2 a month, or about the tax increase on two packs of cigarettes.

The next year, Bettencourt predicts an average savings of another $268.

To reach these figures, Bettencourt factors in two real-world factors that Perry does not.

The first is that this year's average appraisal is up nearly 7 percent, which will eat up part of the tax savings. He figures next year's average will rise another 7 percent.

Bettencourt also expects school districts to raise their tax rates 4 cents the first year. It is a reasonable expectation.

The new law not only allows districts to enact that raise, it encourages them to do so.

Under the law, that amount of raise is not covered by "Robin Hood." Property-rich school districts can raise their rates that much without sending money off to poorer districts.

And if poorer districts raise their rates that much, the state will match the raise with state funds.

Most boards will take advantage of this provision, especially since any hike above that will require approval by the voters.

So the bottom line is this:

Only the sort of people who appear on Rick Perry's campaign contributor lists are likely to get the $2,000 he promises.

The average homeowner should listen to Bettencourt.

You can write to Rick Casey at P.O. Box 4260, Houston, TX 77210, or e-mail him at

© 2006 Houston Chronicle:


Hired pork doctors inflate toll road revenue forecasts

truth be tolled -first in a three-part series

Roads to riches
Paved with bad projections


By Chuck Plunkett
Denver Post Staff Writer
Copyright 2006

As Colorado, other states and federal officials increasingly look to toll roads to spur growth or clear clogged highways, a review of 23 new turnpikes nationwide shows that a clear majority are failing to meet revenue projections to justify their costs.

Even with adjustments for the break-in period in the opening years, 86 percent of new toll roads in eight states failed to meet expectations in their first full year.

By year three, 75 percent - 15 of the 20 that have been open that long - remained poor performers.

Despite that history of flawed forecasts, Colorado officials are promoting tolling as a way to build new roads or express lanes in an era in which other funding sources for roads are shrinking.

Three companies nationally do most of the revenue projections relied upon to sell bonds to cover road construction costs. Their representatives offer several possible explanations for consistent overestimates of road popularity.

Two scenarios never mentioned are troubling to securities experts:

Cases where the consultants doing the revenue and traffic forecast either had an interest in seeing the road get built or were later awarded additional work on that road.

Cases where the road's revenue projections were used as a negotiating tool to secure favorable financing terms rather than as an impartial scientific study.

Both situations apply at metro Denver's Northwest Parkway.

The $416 million, 11-mile parkway from Broomfield to E-470 has attracted just half the cars forecast since it opened in 2003.

Its director, Aurora City Councilman Steve Hogan, said that before seeking outside investors in the road, he didn't believe the optimistic forecasts for its profit potential. But, he said, he treated those estimates as a tool to persuade bond experts to give the debt a favorable rating, not as a solid predictor.

"My personal opinion was that the numbers were probably a little high," said Hogan, who thought the projections for the critical, early years could be as much as 25 percent above the mark. He expected bond raters to trim the revenue estimates and base their ratings for investors on more realistic projections, but they did not.

In the modern world of financing toll roads, those are the rules of the game, he says. Others agree.

"Big numbers win big prizes," said Robert Bain, a London- based analyst for bond-rating agency Standard & Poor's who has conducted international studies of toll roads. "Quite often, people shop around until they find the people who provide the numbers."

But if that's the case, it's a game that former enforcement officers with the Securities and Exchange Commission say should not be played. Inflated numbers expose investors to more risk and lower returns than they should be getting.

"To believe that they're 25 percent off - I would be extremely concerned about that," said Carr Conway, a former SEC enforcement officer, who spoke after current SEC officials declined to comment.
"That's just flat wrong. ... It's not a negotiation. It's not anything like that."

Though consultants say they abhor mistaken studies, a review by The Denver Post of tolling projects in eight states finds there is no incentive for the estimates to be accurate. Even when wrong, the bonds are simply refinanced and the consultants are paid again for their work on new studies to support the new bonds.

New investors, now earning a higher return, pay off the old investors and hope that enough development follows the new road to make good on the payments. Even in a worse case, such as a Texas toll road that defaulted on $75 million in bonds, taxpayers or insurers can be counted on to bail out the lenders. And the same consultants are hired again and again.

Additionally at the Northwest Parkway, a consultant on the traffic study was promised a lucrative job - paying $350 an hour - if the road was built. Another consultant on the study was promised a contract to serve as oversight engineer if the deal went through. That contract proved to be worth $5.7 million.

Similar situations have occurred elsewhere.

In South Carolina, the company hired to prepare projections for Greenville's Southern Connector also was promised a pair of contracts worth millions of dollars if the bonds sold.

In Florida, too, the state's tolling officials hired their traffic consultant to do additional work for three of the roads funded by its studies.

One of those five roads will open this year, so its performance can't yet be measured against the projections.

In each of the other four cases, actual use of the roads ranged from 34.5 percent to 67.5 percent of their estimated traffic in their first year of operation. The projections remained dramatically off in the third year, where toll collections were from 35.3 percent to 78.4 percent of the forecast amount.

Consultants said their revenue projections were never influenced by the prospect or promise of future work. Instead, they said, estimating use is a tricky business, subject to the vagaries of development, the economy, weather and even terrorist acts.

Ed Regan, who directs forecasting at South Carolina engineering firm Wilbur Smith Associates, said bias is not an issue for his company. As proof, he pointed out that not every road idea gets to market.

Five times in the past 21 years, his company was paid for comprehensive studies of proposed roads and concluded that a reasonable tolling scheme would not work.

But Wilbur Smith's president and chief operating officer acknowledges that traffic consultants are under pressure from project sponsors to supply numbers that sell bonds.

"Some of them will come directly to us and say, 'Your numbers are too low,"' said Hollis A. Walker Jr. "It is not a rare situation to have clients try to influence the numbers, and we refuse. We make our best estimates, and then we stick by them."

Still, critics bristle at a process they say lacks the oversight of traditional road-building.

"It's a no-lose situation for the state," said George Price, who opposed Greenville's Southern Connector. "If the bonds sink, the bondholders are left holding the bag, but you will have a road.

"No matter what happens, you will get a road. And that's how they're selling them across the United States."

Missing projections

When planning a new toll road, backers usually turn to one of just three companies to conduct the traffic projections: Wilbur Smith, URS Corp. and Vollmer Associates, which did the projections for the Northwest Parkway.

Although each company worked on a project reviewed by The Post that surpassed expectations (the only three that did), collectively the three companies missed first-year projections on 19 of the 22 operating roads.

Several tolling officials said they had little choice in picking a traffic consultant because Wall Street analysts expect experienced firms. But the analysts say they have wondered about the errors.

"The track record for startup toll roads has been spotty," said Scott Trommer, a senior director at Fitch Ratings.

So much so that investors increasingly demand greater returns on the bonds, forcing toll authorities to borrow more money to use as a hedge against roads that don't perform as expected. The extra money is set aside to cover payments in early years should the toll collections not be sufficient.

But traffic and revenue consultants say many toll roads do finally come around and produce, once the new houses and businesses they make possible move in.

Colorado's E-470 is a good example, Hogan says, adding that he expects the Northwest Parkway to emulate the road he led for several years before taking over the Northwest Parkway.

But E-470 is still lagging well behind its original projected toll revenues. Vollmer predicted in 1995 that E-470 would collect $97.9 million in 2005. The road collected $77.8 million, a miss of more than 20 percent. But the miss is bigger than it seems. Vollmer's 1995 predictions were based on an E-470 only 34 miles long. The toll road opened to its present 47 miles in the first days of 2003.

Consultants at the Northwest Parkway blame missed forecasts on the terrorist attacks of Sept. 11, 2001, which occurred after the bonds were sold that summer, and caused a drop in the expected trips between Denver's northern suburbs and Denver International Airport.

The collapse of the high- technology industry also hurt employment in the corridor, they say, and plans for a nearby housing development are just now getting underway.

But traffic at DIA is higher than it has ever been, and the tech-industry collapse had started well before Sept. 11. Yet the road has failed to come close to its projections.

The projections Vollmer gave to investors predicted that in its first full year, 2004, the Northwest Parkway would collect $6.3 million before expenses. Instead, the new road collected $4.2 million.

Vollmer said that toll plazas would collect $10.4 million in 2005. Instead, they collected $5.6 million.

Hogan predicts the authority will take in between $6.3 million and $8.5 million in 2006. Vollmer predicted $17.3 million.

Vollmer officials declined repeated requests to comment.

Analysts say that at its current rate of collections, the authority could be in danger of default when it is required to begin repaying debt in 2008. Hogan says that the money it saved in construction costs and some reserve funds could carry the authority until 2009.

"A reasonable basis"

In 1994, the SEC first warned that anyone selling municipal bonds should make sure they were giving potential investors the full picture.

"Municipal dealers must have a reasonable basis for recommending the purchase of securities," the SEC said.

Former SEC enforcement attorney David Zisser said the federal agency could easily become concerned about the failure of a tolling authority to disclose doubts about their revenue forecasts.

Hogan's admission that he doubted the numbers struck rating-agencies analysts as surprising. Analysts said they expected good-faith, rigorous estimates.

"It's interesting to actually hear an open acknowledgment of it, because when we sit here, we wonder if that's going on," said Tom Paolicelli, a senior analyst at Moody's, one of three agencies that gave the parkway strong initial ratings. "We wonder if there is an inflation because they expect us to cut (the revenue estimate) down."

Hogan, who earns in excess of $166,000 annually as the authority's director and whose signature is on the official statement, said his doubts wouldn't have mattered to investors.

"If I were buying the bonds, ... I would say, 'Well, here's an executive director whose job it is to be cautious, whose job it is to be careful ... but who has never issued bonds on his own."'

His explanation is echoed by others in the industry who say that the bonds are purchased by sophisticated investors who understand what they are getting into. And the official statements warn that the revenue projections could be in error and that the bonds are for the consideration of experienced investors.

"These are not mom-and-pop people," said Pamela Bailey- Campbell, a consultant Vollmer hired to help it prepare the traffic study.

But Colorado mutual-fund manager Chris Johns, who buys Colorado tax-exempt bonds for Kirkpatrick Pettis Smith Polian, says had he known of Hogan's doubts, he would have returned to the bargaining table.

Hogan's concern that the numbers might have been 25 percent too high means "more risk," Johns said. "Which means we would require a higher return."

Startup costs covered

One of the major differences between a traditional, taxpayer- constructed road and the public- private partnerships that create toll authorities such as the Northwest Parkway is that the contractors hired to build the toll road are required to cover many of the startup costs.

Because of this arrangement, the firm chosen to build the Northwest Parkway was required to cover the costs of hiring various consultants, including the contract with Vollmer to conduct the traffic and revenue study.

The firm, now known as Washington Group, also paid most of a $1.1 million fee engineering firm Carter & Burgess charged for an environmental-impact study.

The result is that Washington Group knew upfront that it would lose the money it spent if the bonds didn't sell and the road wasn't built.

If the bonds did sell, however, the construction company would win an immediate fee of $7.75 million, and the company would move forward on a project worth $191.6 million.

Washington Group partnered with another contractor in 2001. Its cut plus the $7.75 million would be worth $83.7 million in gross revenues.

Hogan says Washington Group's work was kept separate from Vollmer's work to prevent any undue influence on the studies that gauged the project's feasibility. But he acknowledged that the contractor, with so much to gain from the sale of the bonds, had key meetings with the consultants as the critical projections were being crafted.

A year before the bond sale, and with the blessing of Northwest Parkway officials, Washington Group representatives went to Vollmer's New York offices to get the preliminary picture on whether revenue generated by the road would be enough to persuade bondholders to invest. They returned and informed Hogan that the projections looked good.

The bonds sold. The Northwest Parkway Public Highway Authority was suddenly flush with cash. But officials discovered soon after it opened that it might not be able to repay that money. Now, because traffic has fallen so far short of expectations, some of that cash is being spent again in preparation for refinancing the bonds through sale to new investors who probably will have to accept more risk.

The authority paid $500,000 to Vollmer last year to recalibrate its traffic model in a failed start at refinancing, and another $42,465 to Bailey-Campbell's consulting firm for work on the refinancing. The authority abandoned the effort when it learned the interest costs would be too high.

The canceled bond sale cost the authority an additional $324,071 in payments to rating agencies and disclosure attorneys.

For its next attempt, the authority has agreed to pay Vollmer another $625,000 to update its traffic and revenue study. Bailey-Campbell, the rating agencies and attorneys will all be paid again.

The result could be that the authority doesn't default on its loans but that users of the road could pay tolls 10 more years beyond the expected bond payoff date of 2041, Hogan says.

The Northwest Parkway, like some others, paid to insure its bonds. It paid about $16 million to two insurance companies from the money it borrowed from investors.

So even if the authority fails to refinance and can't make payments, bondholders should get their money.

Johns, of Kirkpatrick Pettis, which bought $2 million of the Northwest Parkway bonds, said he knows what the insurance meant to him: Without it, his company would not own the bonds.

The policies, Johns says, give an extra advantage to his clients, whom he describes as mostly working people adding to their retirement savings and young couples saving for their children's college educations.

But Johns predicts that the certainty the insurance provides isn't so certain for future bond issues. The insurers may not wish to maintain or increase their coverage, he said.

"Would you insure the new bonds?" Johns said. "Here's what will happen: The existing bondholders aren't going to lose anything. ... When the new ones are issued, they will find a new group of investors who have to analyze the risk to determine whether to invest.

"It's going to be a kind of 'eyes wide open."'

Johns' point is all too clear to Hogan as the Northwest Parkway tries again to sell new bonds.

Hogan says he's thankful the toll road managed to save $20 million in construction costs it set aside as a rainy-day fund.

"If we hadn't done that, we would have been in trouble," he said. "Big, big trouble. There's no two ways around that."

Staff writer Jeffrey Leib and staff researcher Barbara Hudson contributed to this report.

Staff writer Chuck Plunkett can be reached at 303-820-1333 or

© 2006 Denver Post: