Sunday, January 07, 2007

"Selling our state highways to anyone is terrible public policy. It's up to the Legislature to make some changes in the law."

Viewpoints, Outlook


State's game? Highway extortion

Harris County is getting held up on toll road funding

Jan. 6, 2007

Houston Chronicle
Copyright 2007

Question: When is it more appropriate to call a proposal "highway extortion" rather than "highway robbery"?

Answer: When the Texas Department of Transportation (TxDOT) negotiates with the Harris County Toll Road Authority (HCTRA) and makes demands such as TxDOT is now making on how new toll roads will be built in Harris County.

TxDOT wants the county to pay TxDOT $1.234 billion for the right to use or cross the state's right of way for the construction of possibly three new tollways. The county will then be responsible for all other right of way and construction costs. When the project is completed and tolls are being collected, 8 percent of the gross tolls will be paid to the state.

This extortion, of course, is not acceptable to the county. The county has offered to pay the state $1.2 billion, payable over 40 years with $350 million of that being paid up front. I believe even this is too generous to the state. Remember: the county has already paid the state $250 million to build part of the Katy Freeway.

When I (as Harris County judge) negotiated with TxDOT in 1983 for the right to build the Hardy Toll Road and West Belt (which became the Sam Houston Toll Road), the state highway commission was great. Again in 1990, the commissioners were supportive in the construction of the south and east belt, along with the county taking over the money-losing toll bridge at the Houston Ship Channel. We were able to complete all of those projects ahead of schedule and below projected budget.

The agencies that rate the county bonds have rewarded Harris County by improving ratings because of the toll road authority's strong financial position. I don't believe we can keep our favorable rating if the state prevails in its current demands.

This present state commission for TxDOT has a different attitude than the commission I dealt with in the past. The current TxDOT commissioners want to do in Harris County what they've done in central Texas. In the Austin area they took proposals from private groups to build and operate some toll roads. TxDOT accepted the proposal that offered the most money to the state. Great for the state; bad for the users. Although the private group has to pay large amounts to the state, they don't care because they can pretty much charge what they want to the users.

Instead of building public projects based on the best low bid, the state is adopting a policy of building major projects based on the best high bid. When the state enters into one of these agreements called a "comprehensive development agreement," or CDA, the state agrees to limit competition. The investor gets a guarantee that other roads will not be built to compete in any way with the CDA toll read.

Who knows what effect this will have on future development? This has already happened in Pflugerville, on Texas State Highway 45, where an exit was denied in order to maximize revenue, thus hurting local business.

California did a CDA on a state road in the Los Angeles area and later decided more capacity was needed. However, before they could proceed they had to buy back the CDA from the investors. The buy-back cost the state a lot of money. Apparently, this procedure will be used by TXDOT to build FM 1604 in San Antonio.

I believe the state is being unreasonable with Harris County, because it knows it can receive proposals from private entities for as much or more. If that happens, the roads will still be built. The tolls will be a lot higher. Local control will be lost. The private entity will make large profits and those profits will leave the area, probably going overseas to Spain as has happened in the Austin area.

This is not just a Harris County problem. A similar concern is developing in North Texas with the North Texas Toll Authority. The move there by TxDOT could be that the state takes over the toll authority's toll roads, including the existing ones. TxDOT is asking for legislation that will allow this to happen. San Antonio will soon be facing the same issues.

Texas should continue past policies that encourage the development of its transportation system in the most efficient manner with as much participation with local agencies as possible.
There are better options available to the state to improve our mobility problems. A gasoline tax pegged to inflation with bonding ability, along with efficient toll roads with local control, would go a long way; and we would not be sending our money to overseas investors — money that should be invested locally, which is what the Harris County Toll Road Authority does. Selling our state highways to anyone is terrible public policy. It's up to the Legislature to make some changes in the law.

Lindsay, a Republican, has represented State Senate District 7 in Houston since 1996. Prior to that, he was Harris County judge for 20 years.

© 2007 The Houston Chronicle:

To search TTC News Archives click HERE