"Private toll road advocates have done a terrible job of selling the idea to fellow Texans."
Fort Worth Star-Telegram
During this year's legislative session, Texas had an "oh, wait, hold on, don't do that" moment on privately funded tollways. Fair enough, but now it's time to figure out what the state should do, including how to pay for what the state's highway czar calls a $100 billion shortfall in money needed for essential highway projects.
Ric Williamson, the Weatherford businessman who is chairman of the Texas Transportation Commission, says "the entire future of the state transportation system" depends on potential revenue from private toll road investors. Without it, staffers with the Texas Department of Transportation told commission members at a meeting last month, the state soon will have only enough money to maintain existing roads, with nothing left for new highways to relieve congestion.
In May, the Legislature -- bowing to a buildup of constituent outrage against private toll road proposals and the thought that some of those projects could go to foreign companies -- slapped a two-year moratorium on new toll partnership contracts. There were a few notable exceptions, including the Texas 121 tollway planned for Denton and Collin counties.
Lawmakers also said a legislative study committee should be named to determine whether heavy reliance on private toll roads is a good idea. The committee is to have nine members, with the governor, lieutenant governor and House speaker each appointing three. Five months later, only Speaker Tom Craddick has made his appointments.
Come on, Gov. Rick Perry and Lt. Gov. David Dewhurst. This problem is not going away on its own. Even after members are named, legislative study committees are often slow to start their work and slow to move forward. This one will have some heavy lifting to do before writing its required report for the 2009 legislative session.
There's no time like now to get this committee started.
How we got here
It's clear that private toll road advocates have done a terrible job of selling the idea to fellow Texans. Now it's in deep trouble. If the concept is to be salvaged, the legislative study committee will have to gather the right data and sell the whole thing anew -- in a way that constituents can believe is independent of political pressure or influence from those who want to make money from toll roads.
Perry was the first to push private toll roads in 2002, when he proposed a 50-year plan to build the 4,000-mile, $175 billion Trans-Texas Corridor. That February, as if to emphasize the point, Fluor Enterprises of Sugar Land submitted an unsolicited proposal to build one of the corridor's priority projects.
By 2003, the Transportation Commission was touting the potential of public-private partnerships to build new roads, saying investors would be willing to pay billions upfront for contracts to build new roads, then collect tolls and share that revenue with the state for as long as 50 years.
The Legislature climbed on board in 2003, passing House Bill 3588 -- a massive rewrite of state transportation law that authorized private toll road contracts, which it called comprehensive development agreements (CDAs).
The Transportation Commission also adopted the Texas Metropolitan Mobility Plan, changing the way it distributed money for highways. For decades, construction projects had been selected and funded one at a time from Austin. The new plan was to allocate money by region and let regional mobility authorities, created under HB 3588, decide how to spend it.
Where things went wrong
In effect, local officials who were named to positions leading those regional mobility authorities (in Dallas-Fort Worth, it's called the Regional Transportation Council), were left to solve their own problems. At the same time that they were given the freedom to spend transportation dollars, it became clear that there were far from enough available.
Highway construction in Texas traditionally has been funded primarily from motor fuel tax revenue. But more and more of that money is needed to maintain existing roads. And Williamson says that costs for labor, asphalt and related materials, right-of-way and engineering work have escalated 65 to 70 percent in the past 10 years. Meanwhile, legislative leaders refused to raise the tax.
And the state's congressional delegation continues to have a hard time increasing the state's share of revenue from the federal motor fuel tax. Texas only gets back about 90 cents out of each fuel tax dollar that it sends to Washington.
It's almost as if local decision-makers are being pushed down a funnel that leads to only one source of money to meet future needs: private toll road contracts.
Opportunity or nightmare?
Williamson says that in 2003, the transportation commission had identified 56 projects in the state's highway plan that private companies would be interested in bidding on because of their potential toll revenue. That number has grown to 87.
Toll roads clearly don't work everywhere. They work best in heavily populated metropolitan areas such as Dallas-Fort Worth. But Williamson and others are saying that the money that investors are willing to pay upfront for toll road contracts, plus the portion of the annual toll road revenue that they would be willing to share, is the best source of money for other new roads.
If that's the case, so be it. But Texans clearly still need convincing.
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