Monday, November 19, 2007

TxDOT thinks it "imperative that they create the crisis so that you can solve the crisis their way."

Lawmakers Differ on TxDOT Budget Cuts

November 19, 2007

by Harvey Kronberg
The Quorum Report
Copyright 2007

Key Senators say the cuts reflect transpoortation funding crunch, a House member says TxDOT using cuts to get their way on private toll roads.

TxDOT announced last week that it was proposing significant cutbacks in spending, mostly in what the agency spends on engineering consultants and acquisitions of right of way for future highway projects.

The logic is that with the federal government taking back transportation funds (what is known in the bureaucratic jargon as rescissions), the rising costs of construction materials and the increasing inadequacy of the motor fuels tax, many highway projects currently on the books simply won’t get built. So if no new funding is in the offing soon, TxDOT argues that it doesn'’t make sense to hire those engineers or to buy that right of way.

In the Legislature, lawmakers who were active in the highway funding debate last session were alternately dismayed or allayed by TxDOT’'s proposal.

House Appropriations Chairman Rep. Warren Chisum (R-Pampa) said he received no word of the impending cuts, claiming that he didn'’t know anything about them until a reporter called him for reaction. Chisum said such a move was "typical TxDOT. They don’t tell anybody anything; they just do what they want to do."

Rep. Lois Kolkhorst (R-Brenham), author of the original amendment last session placing a two-year moratorium on public-private toll road partnerships, told QR that she, too, was not notified of TxDOT’s proposed cuts.

Kolkhorst was skeptical of TxDOT'’s stated motivation for the cuts. She said that she thought the transportation agency was trying to put the squeeze on lawmakers to force them toward public-private toll partnerships.

The agency thinks it "imperative that they create the crisis so that you can solve the crisis their way," she said. She added that the Texas 161 project in Dallas County was another example of TxDOT creating a crisis to force a resolution favorable to its position in favor of expanded private equity.

TxDOT and the local tollway authority, the North Texas Tollway Authority, are locked over how to come up with an agreed value of the toll project. SB 792 gives NTTA first shot at the project, but the two sides must agree on the value of the project. NTTA is accusing TxDOT of not sharing the methodology by which it puts a value on the project.

Time is ticking toward a Dec. 21 deadline. According to a Dallas Morning News report, TxDOT is threatening to yank the project as a toll project. That would force local transportation money to be used on Texas 161 instead of on other projects. NTTA said that the cost of such a decision could run up to $1 billion.

Kolkhorst suggested that TxDOT is using the market valuation provision to set up local tollway authorities to fail and not be able to take these high value transportation projects. She said that she expected lawmakers to respond at the committee level to the proposed budget cuts.

Two Senators contacted by QR, though, don’'t share Kolkhorst’s view of the cuts. Both John Carona (R-Dallas) and Robert Nichols (R-Jacksonville) said they were made aware of the cuts before they were proposed last week.

Carona, chairman of the Senate Transportation and Homeland Security Committee, agreed with the shift in funding to road maintenance given the federal funding climate and the constant erosion of the motor fuels tax’ purchasing power. "You have to take care of the maintenance," said Steven Polunsky, director of the Senate Transportation Committee, adding that the state can'’t afford to have a tragedy on the scale of the Minneapolis bridge collapse.

TxDOT is not to blame for the funding shortfall that is spurring the cuts, Polunsky said. "If it’'s a manufactured crisis, the factory was the Legislature over the past several sessions," he said. "(Carona) would not be advocating indexing fuel taxes if that was not the case."

Nichols, a former state Transportation Commissioner, agreed with Carona that TxDOT was being above board with its proposed cuts. The problem that TxDOT faces, he said, is that "people don'’t want to believe the truth that we have a tremendous funding shortage."

What TxDOT really needs is for lawmakers to provide a dependable funding system, Nichols said. One of the "backbones" of TxDOT’s funding over the years has been constitutional language flowing money to the agency. The flow is less than it used to be, Nichols said.

He and Carona agreed that TxDOT and the NTTA need to find a way to resolve their impasse on the Texas 161 project. Polunsky said that the Senator was confident that an agreement would be reached. Nichols said that he saw no reason why TxDOT couldn’'t share its valuation methodology with the local tollway authority.

The Legislature set up local tollway authorities specifically to allow local interests to own and control their toll roads, Nichols said. "They should be allowed to build toll roads," he said.

Nichols went on to add that he understood TxDOT’'s position because local authorities have in the past been slow to move on transportation projects. NTTA, for example, chose to pass on the Texas 121 project before entering a bid after the brouhaha erupted over the awarding of a contract this spring to Cintra.

Still, a deal "can be done by tomorrow, if they want to get it done," Nichols said. "I think you have a game of high stakes poker going on up there and the citizens are the ones who are going to lose" if the two sides don'’t agree on something.

Looking at the near term funding situation, voters this month approved $5 billion in bonding authority for TxDOT. Lawmakers, however, did not pass the enabling legislation this session that would allow for those bonds to be sold. The money won'’t be available until lawmakers meet again. With no special sessions looming on the horizon, those bonds most likely won’t be authorized until the 2009 session.

Comptroller Susan Combs has certified $300 million in immediate bonding authority for TxDOT, according to a Combs spokeswoman. The money was authorized through a budget rider penned by Senate Finance Chairman Steve Ogden (R-Bryan).

House Transportation Committee Chairman Mike Krusee (R-Round Rock) was out of town at a transportation conference and not immediately available for comment. A representative for the Lieutenant Governor did not immediately respond to e-mailed requests for comment.

House Speaker Tom Craddick spokeswoman Alexis DeLee said, "We regularly visit with TxDOT and respect the Commission's authority to shift resources to priorities."

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