Friday, April 25, 2008

"Perry's not budging on transportation issues --foreign-operated toll roads and the rest."

Perry throws down gauntlet on transportation


by William Lutz
Volume 12, Issue 35
The Lone Star Report
Copyright 2008

Gov. Rick Perry had a clear message for lawmakers at the Texas Transportation Forum in Austin April 22: He's not budging on transportation issues --foreign-operated toll roads and the rest.

"This is progress, and it works," the Governor said.
The transportation forum was created by TxDOT as an alternative to industry conferences less friendly to the agency's agenda.

"While I am looking forward to addressing this issue [transportation] when the Legislature meets in 2009, " Perry said, "the state cannot afford to repeat 2007. Members of the Legislature must understand that 'no' is not a solution to this challenge. It is an abdication of responsibility." Perry made clear his determination to defend the renting of state right-of-way to private companies in exchange for a fee and building and operating a toll road.

He also defended foreign and private-sector capital, saying, "In Texas, we pursue private money to build our communications infrastructure, we leverage private money to build our rail infrastructure, and we welcome private investment from overseas if it means putting in a new Samsumg plant or a new Toyota manufacturing facility. So why in the world shouldn't we pursue private funds to help us build roads?"

Toyota and Samsung, to be sure, face competition in their industries. Nor do they hold government-issued exclusive franchises to build and operate toll roads--a point neither included in Perry's speech nor lost on many legislators.

Perry also reiterated his opposition to issuing any more bonds against future gas tax revenues until a long-term transportation finance plan has been adopted.

Perry's key point: Even while the state is growing, highway contract lettings are declining, due to dwindling state and federal gas tax revenues. "[T]he simple truth," said Perry, "is, when it comes to roads we need more of them."

Besides Perry's speech, the forum furnished interesting panels, of which the most worthwhile, possibly, dealt with transportation finance. Texas Department of Transportation director Amadeo Saenz, chief financial officer James Bass, and assistant executive director for innovative financing Phillip Russell provided one of the clearest explanations to date of current TxDOT policy.

Bass, discussing problems with transportation finance at the federal level, noted that when the last federal transportation bill was passed (called SAFETEA-LU by the Washington crowd), the federal highway trust fund had a positive balance, which was distributed to states in a lump-sum in the bill.

Now, said Bass, that balance is gone, and the federal highway trust fund is in financial trouble.

Bass said the last round of rescissions (cuts in previously appropriations disproportionately affected the federal government�s equity bonus program. That program ensured that all states received a minimum percentage of their gas tax dollars back. Texas, historically a donor state, disproportionately benefits from the program. Thus it was disproportionately hurt by the rescissions, Bass said.

The panelists estimated that over the next 10 years, traditional financing sources will yield $28.2 billion, which they called a fraction of the amount needed to pay for the state�s transportation needs. Hence, the need for new approaches to transportation finance.

Meanwhile, Perry wasn't alone in refusing to back down on a transportation agenda. Republican U.S. Sen. Kay Bailey Hutchison said she's not budging in her opposition to tolling existing highways.

At a hearing of the Senate Commerce Committee April 22, Hutchison made clear she still opposes converting freeways to toll roads.

"I am concerned about the views on tolling that were put forward," she said, "I do support the right of local communities to build new infrastructure through tolling. I support tolling if it is going to create an additional lane, where you keep the freeways that are already built with the same number of free lanes. I just can't support the proposal to toll existing lanes. "The federal government and the states built these roads using federal funding with the commitment that they would remain freeways. These existing roads are a public good, built with public funding, and should not be converted to generate money for local entities to take away from the federal taxpayers." O

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