Thursday, April 12, 2007

Would the TTC be the biggest 'victim' of a private toll road moratorium in Texas?

Texas House OKs Toll Ban

Veto-Proof Majority Likely in Senate

Posted 04/12/07

by Richard Williamson
The Bond Buyer
Copyright 2007

DALLAS — A two-year moratorium on most privately financed toll roads appears to have a veto-proof majority after clearing the Texas House yesterday.

With billions of dollars in private-public financing at stake, the Senate took up its version of the House measure that won a 134-to-5 vote Tuesday, with a final reading yesterday.

The two bills, HB 2772 sponsored by Rep. Lois Kolkhorst, R-Brenham, and SB 1267 by Sen. Robert Nichols, R-Jacksonville, are identical and are likely to face a veto from Gov. Rick Perry, a strong advocate of private financing of toll roads. But with 27 of 31 senators sponsoring the SB 1267 version, an override appears certain if the bill passes with enough time in the session for another vote.

Under the Texas constitution, the Legislature has no recourse if the governor vetoes a bill after the session ends.

The House version of the moratorium exempts projects in the Dallas-Fort Worth area that are already in the planning stages. The exemption was written into the House bill after government officials testified last month that the moratorium would have a devastating impact on critically needed projects.

The biggest victim of the moratorium would be the Trans-Texas Corridor, a $184 billion, 4,000-mile network of toll roads, rail lines, and utilities designed to relieve congestion on Interstate 35 and expand business opportunities in the state.

The project is headed by the Texas Department of Transportation with Spanish-American consortium Cintra-Zachry in a 50-year contract.

The Spanish firm Cintra Concesiones de Infraestructuras de Transporte has also won preliminary approval to build and operate the Highway 121 project in Collin and Denton counties north of Dallas. Cintra would provide a $2.1 billion upfront payment that could be spent on other traffic projects in the region. Under the House bill passed yesterday, that project would be spared the moratorium.

In a separate hearing, Ric Williamson, chairman of the Texas Transportation Commission, told House Transportation Committee members that the state’s growth and declining funding sources are forcing the state to use creative financing schemes.

Raising gas taxes to build and maintain roads is politically difficult, but several bills seeking a higher tax are pending. The tax has been 20 cents a gallon since 1991.

As an alternative to private financing, the Senate has already passed SB 1795, sponsored by Sen. Steve Ogden, R-Bryan. That bill doubles bond authorization for TxDOT to $6 billion.

The bond debt would continue to be backed by the state’s gasoline tax, and additional funds would come from diverting $150 million a year from the Department of Public Safety. Ogden, a former supporter of Perry’s proposed public-private toll road financing play, has changed his mind in favor of traditional public financing.

Robert Poole, director of transportation studies at the Reason Foundation and adviser to the Bush administration and others on transportation policy, called the moratorium “a huge overreaction.”

A two-year moratorium would really be a three-year or longer delay in starting projects, Poole said. During the hiatus, construction costs would rise as congestion increased in the state.

“Meanwhile, Florida and Georgia are welcoming private toll road investment, and bills are pending in Arizona, California, and Nevada to do likewise,” Poole said. “Colorado, North Carolina, Utah, and Virginia are among other fast-growing states with such laws on their books. So it’s not as if billions of dollars in toll road capital have no place else to go.”

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