Friday, August 24, 2007

"Listening to Gov. Rick Perry and Commissioner of Transportation Ric Williamson talk is like reading a cheap imitation of a George Orwell novel."



Sound Transportation Policy

August 24, 2007

by William Lutz
Volume 12 Issue 4
The Lone Star Report
Copyright 2007

The Texas Department of Transportation (TxDOT) says it needs to spend $9 million in taxpayer money to sell its vision of transportation policy to the public.

Maybe if TxDOT pursued rational transportation policies, the public support would follow, and it could spend that $9 million building and maintaining roads.

Listening to the state’s transportation officials, including Gov. Rick Perry and Commissioner of Transportation Ric Williamson, talk is like reading a cheap imitation of a George Orwell novel.

Borrowing money and deficit spending are called “innovative financing techniques.” The term “public-private partnerships” is used to describe mortgaging public property. Tax hikes are called “market-based” or “value-based” tolling or “market-valuations.”

Government-sanctioned monopolies are referred to as “introducing competition to transportation financing.”

Here’s why Texans ought to be concerned.

  • Borrowing carries a price tag. The Texas Constitution has traditionally eschewed deficit spending and required existing revenue to pay for existing spending. Now, the state wants to build most of its roads by borrowing, either publicly or by getting a private firm to agree to borrow money, build a road, and collect tolls. There’s no such thing as free money, and often bond lawyers request concessions in exchange for the money fronted to the state. Many of these private financing arrangements prohibit the state from building free roads near a toll road, or require it to pay a stiff penalty if it builds a competing free road or wants out of the deal.
  • Secrecy. A 2005 transportation bill exempts draft copies of many road deals from public disclosure - even in the face of criminal subpoenas. Prior to 2007, the terms of these deals weren’t even public until after the contracts were signed, and the terms set in stone. In 2007, the Legislature provided some additional transparency, but more sunshine is still needed to ensure informed consent from the public.
  • No checks and balances. The ability of TxDOT to rent state highways to private vendors without a legislative appropriation basically gives TxDOT a license to print money, without going though the usual appropriations process. The Constitution wisely gives the Legislature the power of the purse, and state assets should be pledged only in response to a public legislative appropriation. The state also takes some highway spending “off-budget” by allowing the creation of regional mobility authorities to build state highways. Even the state auditor cannot precisely calculate how much the state spends on roads.
  • No fiscal restraint. TxDOT officials often claim that it would require a $1.20 increase in the gasoline tax to build needed infrastructure without tolling. This figure is a cost estimate of every project that a region might want to build in the next few years. Both the Governor’s Business Council and the State Auditor have taken issue with TxDOT’s calculations. It also shows a lack of priorities at the agency. Most Americans would love a longer vacation, a fancier home, and a nicer car. But their wallets get in the way. Every day, Texans take their limited resources and differentiate between wants and needs. The government should do so also.
  • Tax hikes. Remember when Bill Clinton referred to taxes paid by the well-to-do as “contributions,” as if payment of taxes were somehow voluntary? Remember how much fun Republicans had lampooning all the rhetorical games Clinton played to avoid referring to his “deficit reduction” plan as a tax hike? Well, it’s happening again. In the 2007 transportation compromise, Perry insisted on “market-based tolling,” whereby the tolls for new highways are set above the cost to build and maintain the road. Perhaps one could call a toll a “user fee” if the amount of the toll reflected the cost of building and maintaining the road (though even that’s debatable). But when money is taken from a government-sanctioned toll road monopoly and used to build other free roads, that’s a tax.

Simply stated, Perry is raising taxes.

These bad transportation policies are being promoted not only here but also by the U.S. Department of Transportation and in other states like Indiana, New Jersey, and Pennsylvania. But just because George W. Bush likes something doesn’t make it right or conservative.

There is a better alternative. It starts with the recognition that building roads is a legitimate function for government, as recognized by the U.S. and Texas constitutions.

Further, user-based fees such as gasoline taxes and auto registration fees are appropriate ways to fund that service, provided that all revenue from those fees goes to roads.

Then, the state should do for transportation what it is already doing in health, education, and welfare policies - look at costs. Why has the cost of building roads increased so quickly? Is this legitimate? Are there ways to reduce these increases?

Registration fees should be adjusted so that overweight trucks pay their fair share. The relationship between damage to a road and weight is exponential, and the registration fees and taxes should reflect that. The gas tax should be adjusted to acknowledge that, on a per-car basis, the gas tax has declined due to improved fuel economy in cars and trucks.

Once the state has gone though that process, then and only then should discussion of tolling begin.

It’s time to stop pushing public policies that primarily benefit a select few highway contractors and investment bankers at the expense of the motoring public.

Instead, let’s put a spirit of public service back into TxDOT and enact transportation policies that provide accountability and frugality. Those policies wouldn’t take a $9 million PR campaign to sell to Texas voters.

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