"Strayhorn has found an issue that unites rural farmers and ranchers with anti-toll activists and environmentalists."
by Christine DeLoma
The Lone Star Report
Volume 11, Issue 4
How to fund Texas highways is rapidly becoming one of the most controversial questions in Texas politics.
Gov. Rick Perry’s private-public partnership to build the Trans Texas Corridor (TTC) would rely on a significant portion of toll revenue to pay for new roads. Independent gubernatorial candidate Carole Keeton Strayhorn pledged to break the state’s contract with Cintra/Zachry and use all available resources to build free roadways.
Are toll roads the future of Texas?
Strayhorn’s pledge might be hard to keep. Last year, Congress made it easier for states like Texas to build new toll roads by providing the flexibility to enter into public-private partnerships. Congress’s actions represented a fundamental shift in the way state and federal highways are typically financed.
States can now issue up to $15 billion in tax-exempt private activity bonds (PAB) to privately finance toll roads and railroad projects. PABs allow state and local governments to issue bonds that will be repaid by a private entity.
Anticipating Congress’ action, state lawmakers passed HB 2702 by Sen. Todd Staples (R-Palestine) in the 79th Regular Session, allowing the state to issue private activity bonds for highway facilities in accordance with federal law.
The federal government also expanded the use of transportation development credits (toll credits), allowing states that use federal money to build toll roads to accrue toll credits on a pro rata basis. Expanding the use of toll credits effectively frees up state matching dollars for other transportation programs.
States are now allowed to combine the design and construction of a toll road project into one contract. Most states currently use the traditional “Design-Bid-Build” method that requires separate contracts for each phase of a construction project, a procedure that state officials say is often costly and time consuming.
The bill removes federal restrictions on state procurement procedures for Design-Build contracts, allowing the work of property acquisition, design and construction to be undertaken simultaneously.
Texas is one of only 15 states experimenting with the Design-Build method in procuring highway contracts. Texas’ first public-private partnership, under a comprehensive development agreement (CDA) is the 90-mile State Highway 130 toll project.
Despite the toll road controversy, the Legislature paved the way for more tolls in Texas. Last year’s omnibus transportation bill, HB 2702 authored by Rep. Mike Krusee (R-Round Rock) and sponsored by Sen. Todd Staples (R-Palestine), makes it easier for the Texas Department of Transportation (TxDOT) and counties to acquire financing to build toll roads.
The Legislature raised from $800 million to $2 billion the ceiling on TxDOT expenditures for “toll equity” grants, which are funds from gasoline taxes used to pay for toll roads.
The legislation also allows particular counties to issue bonds to construct, maintain, and operate toll or non-toll roads or facilities. Counties that choose to take on a toll road project can leverage revenue bonds to potential toll revenue.
The bill codified the state’s authority to enter into CDAs with private companies to build and operate both tolled and non-tolled projects. The CDA can include the setting and collection of tolls and penalties. TxDOT must approve the methodology for the determination of toll rates. The length of the contract cannot exceed 50 years.
Freeways or tollways?
Strayhorn, in getting aboard the anti-toll road bandwagon, has found an issue that unites rural farmers and ranchers with anti-toll activists and environmentalists. She has railed against the Trans Texas Corridor, citing concerns about toll roads, property rights and contracting by foreign companies.
She has crisscrossed the state to attend more than a dozen public hearings held by the TxDOT on the proposed path of the 600 mile long portion of the Trans Texas Corridor (TTC-35) that will parallel I-35 from Mexico to North Dallas.
Over 10,000 concerned citizens have attended the TxDOT hearings throughout the state. In appealing to the hundreds of concerned property owners who may be affected by the proposed corridor, Strayhorn repeats her mantra that Perry’s plan is “the largest land grab in Texas history.”
“Texas property belongs to Texans, not foreign companies,” Strayhorn said. “To meet our transportation needs, we need freeways not tollways, and we must use existing rights of way and increase efficiency of existing roadways and ports. We must not destroy our precious farmland.”
Perry spokesman Robert Black said Strayhorn was sending mixed messages. Pointing to her January 2001 report, “Paving the Way,” Black said that the Comptroller recommended tolling existing roads, speeding up construction time with toll financing, and using taxpayer dollars to fund construction of toll roads. Strayhorn’s campaign says that she only listed tolls in the report as an option among many other methods of financing new construction.
As TxDOT wrapped up its public comment period on TTC Aug. 21, Strayhorn submitted her plan to address transportation problems - without tolls. “This agency is not listening to the people,” Strayhorn said. “At 56 hearings over 21 days, TxDOT ignored the overwhelming majority of people who testified against the Trans Texas Catastrophe. They even went so far as to tell Texans that they could not stop this boondoggle - even if they elected a new governor. Well, they’re dead wrong. I will blast this corridor off the bureaucratic books and replace it with a common-sense plan to address our transportation needs.”
Using the recommendations from TxDOT’s 1999 IH-35 Trade Corridor Study, Strayhorn has proposed adding lanes to IH-35 using existing rights-of-way and building double decking where possible. Other initiatives include:
* Improving and increasing capacity on Texas railways
* Encouraging telecommuting and staggered work schedules for state employees
* Appointing an independent inspector general at TxDOT to investigate waste and abuse and an ombudsman to listen to Texans’ concerns.
* Implementing the Ports to Plains initiative that would convert existing state roads to highways.
The Perry campaign called Strayhorn’s plan unrealistic, saying it provides no new money to pay for transportation projects. “Carole Strayhorn has been all over the map when it comes to transportation and her latest proposal amounts to unfunded promises that will leave Texans stuck in traffic for decades,” Black said.
Strayhorn has suggested using $4 billion in Texas Mobility Bonds and $3 billion in revenue bonds to pay for her plan. That money, Black said, was already designated for other projects.
Hillsboro Mayor Will Lowrance, who support’s Strayhorn transportation plan, spoke out against the Trans Texas Corridor at TxDOT’s public hearing in Hillsboro. Citizens are concerned that TxDOT will take their land, divide their farmland, and harm the environment, he said. Part of the problem for most people is the unknown. “Until they open the contracts with Cintra/Zachry to let us see what they’ve done, how do we know [what’s going on]?” asked Lowrance. Portions of the contract between the state and Cintra/Zachry has not been disclosed to the public. Last year, after the Attorney General issued an opinion saying the contract was subject to public disclosure law, Cintra and TxDOT filed a lawsuit to keep the documents private.
Toll roads and the use of eminent domain to acquire land for TTC have become such hot topics that the issue has also spilled over into the sleepy U.S. Senate race. This week Senator Kay Bailey Hutchison and her Democratic opponent Barbara Radnofsky both criticized portions the Trans Texas Corridor.
Hutchison told reporters last week she was “very concerned” about the Trans Texas Corridor and the taking of private property and didn’t see the need for a toll way between South Texas and San Antonio.
Radnofsky, using Strayhorn’s terminology to describe the plan, testified Aug. 17 at a Rockwall public hearing, calling the “boondoggle” plan the “biggest land grab” in history.
The anti-toll organization CorridorWatch recently filed a complaint with the Federal Highway Administration (FHWA) charging that TxDOT has suppressed public disclosure of environmental impact information that is necessary to comply with the federal National Environmental Policy Act. The group requested FHWA deny TxDOT’s Tier One Draft Environmental Impact Statement. It remains to be seen if their plea will carry any weight.
A former Perry aide, now lobbyist for Cintra/Zachry, Dan Shelley, came under fire this week making plans to take a few state lawmakers on an all-expenses-paid trip to Toronto, Canada, to visit a Cintra-operated toll road. After the Dallas Morning News broke the story, the trip was called off. The law does not prohibit former gubernatorial staffers from lobbying, and junkets are perfectly legal in Texas provided the costs are publicly reported to the Texas Ethics Commission. However, the projected trip provided ample fodder for Perry’s opponents. O
© 2005 The Lone Star Report: