Corzine's Cash Cow Chimera: So-called 'public benefit corporation' would run toll roads and "solve the state's financial problems."

Toll road operator's openness in doubt

As it wouldn't be state agency, open records act wouldn't apply.

January 12, 2008

By Trish G. Graber
The Express-Times
Copyright 2008

TRENTON | New Jersey residents may have little ability to scrutinize the company that would run the state's toll roads under Gov. Jon Corzine's debt-reduction plan.

The state-created nonprofit, termed a public benefit corporation, would not legally be held to the state law that requires government agencies to release information under the Open Public Records Act, administration officials said Thursday.

"This is not a state entity," Corzine's chief of staff Bradley Abelow said.

However, Abelow said the administration is still working out contract specifics, including potentially writing in a provision requiring that the corporation comply with OPRA.

The administration also has yet to work out whether the corporation would be subject to caps on management salaries or whether limits would be set on bonuses handed out to company executives. It is also unknown whether board of directors' meetings would be public.

"At a minimum there would be an annual public meeting," said Treasury spokesman Tom Vincz, as required by 501c3 companies, or nonprofits.

Corzine has worked to construct the long-awaited plan so the so-called public benefit corporation, which would operate the New Jersey Turnpike, Garden State Parkway, Atlantic City Expressway and newly tolled Route 440, would be separate from the state, and the political whims of the Legislature.

That's because the corporation would ultimately bond against revenue from future tolls, which are expected to rise by 50 percent once every four years from 2010 to 2022 and be adjusted at four-year intervals for inflation.

The company would generate up to $37.6 billion to pay down at least half of the state debt and to fund state transportation improvements.

Administration officials said separating the corporation from the state is key to attracting bondholders.

It will also ensure the billions in debt incurred by the corporation would not show up on the state's books.

Comparable to a private company, the public benefit corporation would have an independent board of directors, which would initially be chosen by a search team commissioned by Corzine. The corporation board successors would be subject to the approval of a second board with Corzine-appointees representing the public and government, under a second company, called the Public Interest Corporation.

The plan is "extraordinarily far-ranging and sweeping in scope," but is necessary to solve the state's financial problems, Abelow said Thursday. Those include $30 billion in debt, $25 billion in unfunded pension liabilities and $58 billion in post-retirement medical liabilities.

Administration officials said there are still many details of the contract between the corporation and the New Jersey Turnpike Authority, which will remain largely inactive, to be worked out.

"This is not a structure designed to enrich anyone," Abelow said. "We've got big problems ... doing things the same way over and over has effectively made our problems worse over time."

Trish Graber is Trenton correspondent for The Express-Times. She can be reached at 609-292-5154.

© 2007 Star-Ledger: www.nj.com

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"Dragging houses of worship into partisan campaigns."

IRS asked to investigate Texas Restoration Project's funding

Governor's spokesman says religious nonprofit did nothing wrong

January 11, 2008

By WAYNE SLATER
The Dallas Morning News
Copyright 2007

AUSTIN – The Internal Revenue Service has been asked to investigate whether a Houston-based foundation funded by financial backers of Gov. Rick Perry improperly spent more than $1 million to boost his re-election by mobilizing evangelical Christians.

The Texas Freedom Network, which monitors church-state issues, said Thursday that the Texas Restoration Project hid the source of its funding until after Mr. Perry's 2006 re-election.

Kathy Miller, who heads the Texas Freedom Network, asked the IRS to investigate whether the Republican governor and his financial backers broke the law by "dragging our houses of worship into partisan campaigns."

Robert Black, a Perry spokesman, said neither the governor nor the group had done anything inappropriate.

Federal law forbids nonprofit groups from engaging in partisan politics.

Mr. Black said the Texas Restoration Project did not endorse specific candidates. He said Mr. Perry participated in a series of closed-door pastor briefings to encourage conservative Christians to get involved in politics.

"This is simply a smokescreen to hide the fact that the Texas Freedom Network does not want people of faith involved in elections," Mr. Black said.

Mr. Perry took an active role in the development of the Texas Restoration Project, a network of pastors that encouraged voter registration and the election of candidates reflecting a conservative moral agenda.

He championed the group's efforts to pass a gay-marriage ban on the 2005 ballot and to increase religious conservative voters

The group hosted thousands of pastors and their spouses at a series of closed-door "Pastors' Policy Briefings" in 2005 in Austin, Houston, Fort Worth and San Antonio. It also sponsored an event to celebrate Mr. Perry's inauguration in 2007.

Mr. Perry was the only 2006 gubernatorial candidate invited to participate in the pastor briefings. His campaign had access to the nonprofit group's mailing and e-mail lists. Other GOP statewide officeholders did attend some of the briefings.

Ms. Miller alleges that the efforts masked a sophisticated voter identification and mobilization strategy intended to benefit the Perry campaign in 2006.

Federal tax documents list four "substantial contributors" to the foundation: San Antonio school-voucher advocate James Leininger, Houston homebuilder Bob Perry, East Texas poultry executive Lonnie "Bo" Pilgrim and Colleyville beer distributor Don O'Neal.

All four are major contributors to Mr. Perry and GOP candidates.

The Dallas Morning News first reported the project's existence in 2005. It has since become a model for other similar organizations formed in other states, including Iowa.

wslater@dallasnews.com

© 2008 The Dallas Morning News Co www.dallasnews.com

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"The Bush administration 'lost out on their efforts to hijack the commission to primarily look at privatization and tolling.' "

U.S. Panel Will Recommend Gas-Tax Boost, Person Says

1/10/08

By John Hughes and Angela Greiling Keane
Bloomberg
Copyright 2008

A U.S. panel created to recommend ways to fund road construction intends to propose that federal gasoline taxes rise as much as 40 cents per gallon over five years, a person with direct knowledge of the plan said.

The group will suggest that the current tax of 18.4 cents per gallon climb by 5 cents to 8 cents annually, said the person, who didn't want to be identified before the report is released. After the five years, increases would be pegged to inflation, the person said yesterday.

The proposals, by the National Surface Transportation Policy and Revenue Study Commission, may bolster efforts by members of Congress who have tried unsuccessfully to raise gasoline taxes over the objections of President George W. Bush. A change wouldn't take effect until after Bush leaves office.

An increase is "needed, but politically it's difficult,'' said former Transportation Secretary Norman Mineta in an interview. While the report will make it easier for Congress to raise the gasoline tax, the maximum 40-cent boost isn't likely, he said.

The tax was last raised, by 4.3 cents a gallon, in 1993. The commission will also recommend that state fuel taxes go up by an amount slightly larger than the federal increases, according to the person.

Jan. 15 Release

The commission is scheduled to release a range of recommendations Jan. 15 in Washington. The panel was created by Congress in 2005 with the purpose of issuing the report.

Trina Leonard, a spokeswoman for the 12-member commission, declined to comment on a gas-tax recommendation.

The proposals may also include greater use of tolls and public-private partnerships, said Janet Kavinoky, transportation director for the U.S. Chamber of Commerce.

U.S. Transportation Secretary Mary Peters and two other members of the commission plan objections over the group's majority findings that fuel taxes should go up, Kavinoky said.

Those objecting also include Peters' former deputy, Maria Cino, and Rick Geddes, a Cornell University professor, Kavinoky said. The Chamber backs an increase in the fuel tax as well as other means to pay for infrastructure improvements, she said.

Leonard, the commission spokeswoman, said some members "have differing views on some issues'' and "those are being presented.''

Brian Turmail, a spokesman for Peters, said raising taxes won't cut congestion and will send more dollars to Washington that will be misspent.

`Bridges to Nowhere'

"The last thing we need is more of the same kind of broken policies and ineffective tax hikes that have given commuters traffic to everywhere and bridges to nowhere,'' Turmail said. He declined to say if Peters would object on the tax finding.

Rather than tax increases, the Bush administration has promoted public-private partnerships in which financial firms such as Macquarie Bank Ltd. and Goldman Sachs Group Inc. join other investors to provide roadway funding.

Goldman and Macquarie, as well as Cintra Concesiones de Infraestructuras de Transporte SA and Transurban Group, this week announced they had teamed to push for more private investment in U.S. infrastructure.

Groups including the Chamber say they are open to examining private investment, though higher taxes are also needed. The panel is parting ways with Peters on taxes, Kavinoky said.

Geddes wouldn't discuss report specifics until it is released, though he said all panel members agree on issues in the document. "The commission did recognize the need for more investment in the nation's infrastructure,'' he said.

Blow to Bush

The Bush administration "lost out on their efforts to, from our vantage point, hijack the commission to primarily look at privatization and tolling,'' said Rod Nofziger, a lobbyist for the Owner-Operator Independent Drivers Association, a trade group of small truckers.

Cino said through Leonard that she looks forward to the release of the report. If commissioners have expressed differing views on some of the issues, those will be shared, she said, according to Leonard.

Other highway panel members include Paul Weyrich, chairman of the Free Congress Foundation; Matthew Rose, chief executive officer of the Burlington Northern Santa Fe Corp.; and Steve Odland, CEO of Office Depot Inc.

To contact the reporters on this story: John Hughes in Washington at Jhughes5@bloomberg.net ; Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

© 2008 Bloomberg.com: www.bloomberg.com

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With contracts 'tight as a drum,' higher tolls equal good news at Macquarie

Golden toll roads drive MacBank

January 10, 2008

Michael West
The Australian (Sydney, Australia)
Copyright 2008

"Cost of M6 motorway toll soars by 50 per cent", blared the headline in yesterday's edition of The Telegraph in Britain.

Shares in Macquarie Infrastructure Group (MIG), which owns the road, went up despite the down day. Higher tolls equals good news.

"MPs are considering an investigation into Britain's only privately owned motorway after the cost of driving rocketed ..." -- as MPs do, according to press reports, every time there's a toll hike.

Too bad. The contracts are tight as a drum. The M6, the Toronto 407 and the San Diego 125, all controlled by Macquarie, are the best toll road assets in the world. And, not coincidentally, the only unregulated ones.

The real issues worth considering are twofold. For the consumer, are infrastructure costs going up across the board? Airports, toll-roads, power generation, communications towers, and the likes of childcare and aged care assets? The list goes on.

Thankfully for local motorists, the tolls are linked to CPI and average weekly earnings.

For the financiers, the picture is mixed. Thanks to the credit squeeze and deteriorating markets it would seem the jig is up for aggressive refinancings, revaluations, and other assorted "events" employed by the "Macquarie model" to rip out a fee. "Deal velocity", moreover, is on the wane.

There will be some pressure on prices for consumers. And there will be pressure on earnings for the likes of Macquarie and Babcock. But it's not all bad news for the money engineers. Macquarie now banks $1 billion a year from its base fees alone. It -- the group, not its satellites, that is -- is best placed among all its proteges.

As for growth, the money still pours into the pension funds -- and these funds, leery of shares and bonds (especially exotics), are pouring it into infrastructure. On Tuesday night, Macquarie slapped $18 billion in equity into two funds alone -- its European Infrastructure Fund (3) and a US fund.

But while the inflows are there, an ominous move by New Jersey Governor John Corzine wiped a little bit of blue sky out of the model this week when he took the rather socialist tack (for a former Goldman Sachs chairman) of spurning a couple of large road privatisation deals.

Some $US50 billion worth of roads in the New Jersey Turnpike and the Golden State Parkway, pronounced Corzine, would now be retained by the state. The state would raise the requisite debt against the assets on the basis that it would levy the same debt as the private bidders had proposed.

Ironically for the infrastructure players, though governments will now have to cop a lower price for their asset sales, the financiers can still get the same kind of return on equity. The credit crisis has meant the financiers won't pay governments as much for their assets as their gearing will be lower.

This would be dawning on the NSW Government now, with its proposal in-swing to sell $15 billion worth of electricity power stations.

As for the fall-out from the credit crisis, shares in the top financial engineers, Macquarie and Babcock, have held up well, perhaps a little too well in light of the clear pressure on costs and falling deal-rates. Their satellites, where there is more debt and more risk, have had a far rougher time. The second-tier players though have been caned; Allco thumped to a new low again, MFS foundering a tad, Centro unspeakable. There will be more pain to come. Look for stocks with less governance, less visibility, and lots of debt.

© 2008 News Limited: www.theaustralian.news.com.au

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“If we really want to know what took place when deals for parceling out the TTC were cut, it’s going to take a criminal investigation."

Eyes on TxDOT

Activist Terri Hall has TxDOT’s dream of toll roads in her sights.

1/9/08

By PETER GORMAN
Fort Worth Weekly
Copyright 2008

It’s looking like a tough year for toll roads in Texas, and no one could be happier about that than Terri Hall, the San Antonio woman whose group is leading the grassroots fight against the controversial pay-to-drive roads that Gov. Rick Perry and others want to see crisscrossing the state.

In September, Hall and her group, Texans Uniting for Reform and Freedom (TURF), filed suit in the state district court in Austin against the Texas Department of Transportation, alleging that TxDOT has broken the law by using public funds to lobby legislators for laws favoring toll roads. TURF and Hall also allege that the department’s Keep Texas Moving campaign illegally uses taxpayer money for political advocacy. The judge has refused the state’s request to toss the suit out, and TURF has now gone beyond the civil case and made a formal request that Austin prosecutors consider criminal charges against agency officials.

It didn’t help the state’s case when Hall was named San Antonioan of the year by Clear Channel radio station WOAI and “political person” of the year by the well-respected political blog, The Walker Report. “The honor is great, but it really belongs to the people of Texas who are standing up to toll roads,” Hall told Fort Worth Weekly.

The most serious blow to toll roads, however, may have been the late-December death of Transportation Commission Chairman Ric Williamson, Gov. Perry’s point man on the huge Trans-Texas Corridor project and the most vocal toll road promoter in the state.

The suit brought by Hall and TURF against two top officials of TxDOT seeks to prevent the agency from spending any more taxpayer money on either lobbying legislators or political advocacy. “Both of those are illegal under the Texas Government Code,” Hall said, “and yet both are being done. So we’ve asked for information related to those illegal acts.”

She pointed to a visit last fall by Williamson to Washington, D.C., when the agency announced he was lobbying federal legislators to ease toll road regulations.

The Texas attorney general’s office, representing TxDOT, has challenged Hall’s right to sue the government, while simultaneously claiming that no illegal acts have been committed.

“Basically, the state claimed that TxDOT didn’t do anything illegal and therefore our suit should be tossed,” said Hall. “We claim that the department did act illegally, but [we] can’t show that until we get documentation — on telephone calls, Williamson’s travel expenses, and whom he met with in D.C., the companies hired to promote toll roads, and so forth.”

In a surprising legal twist, Judge Orlinda Naranjo ruled in December that Hall and TURF did have the right to pursue their suit, but asked that they limit the amount of documentation they were requesting. TURF attorney Charles Riley said a narrower request has been filed.

“Our suit basically has two prongs,” Riley said. “The first is that the Keep Texas Moving campaign is an illegal attempt by the government to engage in political advocacy. TxDOT is claiming that campaign is over, so there’s no reason to give us information on it. But we’ve got documentation to show there are plans for future campaigns, and that’s what we want to follow.”

The second prong deals with the lobbying issue, which Riley, like Hall, said is illegal. “It’s very clear that the department of transportation was lobbying the state legislature in the last session to kill the toll road moratorium. And they also lobbied [Congress] seeking to toll existing roads.” Records on those activities, he said, are public information.

Assistant Atty. Gen. Kristina Silcocks has argued that the Texas Transportation Code allows the agency to “engage in marketing, advertising, and other activities to promote the development and use of toll projects.”

Hall has also filed a complaint with Travis County District Attorney Ronnie Earle, whose office investigates crimes related to the operation of state government. “If we really want to know what took place in the back room when the deals for parceling out the Trans-Texas Corridor to foreign companies were cut, it’s going to take a criminal investigation,” Hall said.

Travis County prosecutor Beverly Matthews said the complaint is being considered. “We’re weighing the merits to see if a criminal investigation is in order.”

But while Hall’s lawsuit — and a possible criminal investigation — could become a major thorn in TxDOT’s side, the loss of Williamson has to be a stunning blow to the department. The fiery commissioner frequently spoke of toll roads as the only way out of Texas’ current shortfall in road-building funds. He was often described as the person Perry most trusted to take the public hits for his vision of the Trans-Texas Corridor, a vast proposal of superhighways to be built and operated by private firms.

“Very few people can do what Williamson did,” said Hall. “There may not be anyone else as willing to front for Perry as he was.”

But while Perry is no doubt looking for a successor to Williamson, Hall would prefer that the department do a lot more than find a new chairman. “I think it’s time to make TxDOT more responsible to the people of Texas, and under Williamson’s leadership that didn’t happen and wasn’t going to happen,” she said. With the whole department up for sunset review in 2009, Hall would like to see it run under the leadership of an elected official, rather than a political appointee. “An elected official would have the public to answer to,” she said. “And with the sunset provision coming up, this is the perfect time for TxDOT to start over and have the whole department remodeled.”

Fighting Perry on toll roads is still an uphill battle, but Hall said she’s optimistic, given the growth of the grassroots opposition movement. “If we don’t believe that it [revamping the whole transportation agency] could happen, it won’t. If enough people want it to, and if politicians understand that there will be consequences for what they do, it could,” she said. “And that’s where you start.”

© 2008 Fort Worth Weekly: www.fwweekly.com

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"The Trinity toll road will run a deficit and a higher cost that would impact other road projects."

Changes, delays increasing Trinity toll road costs

January 8, 2008

By BRAD WATSON
WFAA-TV
Copyright 2008

DALLAS - While it's only been two months since the vote, design changes and delays are already adding to the cost of the Trinity toll road in the form of tens of millions of dollars.

The Dallas City Council also learned Tuesday that the toll road could end up snatching highway dollars from other North Texas projects.

Dallas voters settled that the Trinity toll road would be built just inside the east levee of the river. However, what was not settled was the cost.

During the campaign, toll road backers estimated the cost at $1.3 billion dollars.

"Keep in mind, that all of those estimates are for comparative purposes only," said Jerry Hiebert, executive director of the North Texas Tollway Authority.

But design changes required by the U.S. Army Corps of Engineers are adding up.

The NTTA video released showed piers drilled in the levee supporting exit ramps. but the Corps decided the piers could weaken the levee. In result, the Corps has now demanded what's called diaphragm walls, which are concrete walls dug into the levee costing up to $60 million more.

"It's a more costly construction technique, but that's what's necessary to protect the integrity of the levee," Hiebert said.

The NTTA won't make another total cost estimate until later this year. But with design changes, a completion delay from 2013 to 2014 and annual inflation of at least 10 percent, a city council committee acknowleged the final cost will be higher.

"These things happen in the real world, and that's what is going to happen here," said Mitchell Rasansky, Dallas City Council. "But, we're going to go forward with this thing."

Unlike the State Highway 121 toll road that will generate surplus revenue for other North Texas highways, the Trinity toll road will run a deficit and a higher cost that would impact other road projects.

"It will either be delayed or ... they will not get the funding that they need to go forward with those projects because the funding is going to have to come to this tollroad," said Angela Hunt, Dallas City Council.

© 2008 WFAA-TV: www.wfaa.com

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Corzine's "monetization" New Jersey toll roads calls for 50% increase in toll tax every four years

Corzine finalizes highway toll increase plan of 50 percent-plus

January 08, 2008

The Star-Ledger (New Jersey)
by Deborah Howlett and Joe Donohue
Copyright 2007

Tolls would rise every four years and be extended to Route 440 as part of the financial restructuring plan Gov. Jon Corzine is expected to offer up in today's State of the State speech, according to individuals involved in crafting the plan.

The Star-Ledger has learned that any added or increased tolls proposed in the plan would not be collected until at least 2010, the year after Corzine would stand for re-election. A person with direct knowledge of the plan confirmed Statehouse reports of a 50 percent toll hike every four years mixed with annual cost of living increases.

Corzine spokeswoman Lilo Stainton said the administration would have no comment on the plan until the governor addresses the Legislature this afternoon.

Three individuals involved in drawing up the plan said Corzine agreed to tolls on Route 440 -- five miles of highway between the New Jersey Turnpike and the Outerbridge Crossing to Staten Island -- because 30 percent to 40 percent of the motorists using the road are from out of state.

The sources, all of whom asked not to be named because they did not want to upstage the governor's speech, said Monday that Corzine also seriously considered imposing tolls on Routes 78 and 80, but ultimately rejected the idea as politically impractical.

Route 440 runs six lanes of traffic from Route 287 through Middlesex County to Perth Amboy. It provides access to the Turnpike and the Garden State Parkway from Staten Island. The road serves as a convenient shortcut for Pennsylvanians traveling to Staten Island and Long Island, and New Yorkers headed south or west through New Jersey.

Assembly Transportation Committee Chairman John Wisniewski (D-Middlesex), a critic of the toll plan whose district includes Route 440, said he has doubts about such a plan but would keep an open mind until Corzine delivers his speech.

"It doesn't sound like a good idea," Wisniewski said. "Theoretically, it's an interstate route, but practical reality is that it's a local road for the people in the 19th District. The goal to grab revenue from out-of-state drivers is going to affect local drivers and push them onto local roads."

Those familiar with the plan said putting tolls on Route 440 is essential if the state is to get even close to the $40 billion windfall Corzine is hoping for from his effort to "monetize" the state's toll roads. It's more likely the plan will end up netting about $30 billion for the state, the sources said.

Corzine said he plans to pay off at least half of the state's $32 billion in debt with those proceeds. That would free up at least $1 billion in the yearly state budget that now goes to pay interest on the debt.

Whatever other money is raised would be used to replenish the Transportation Trust Fund, which pays for road construction, "for years to come," one of the sources said. Without a new infusion of money, the fund is expected to be exhausted by 2011.

The administration has closely guarded details of the plan, which has been in the works for more than a year. Corzine even went to state court to fight against making public a study produced by UBS, the state's outside adviser on the monetization plan.

Corzine during the weekend confirmed that he will propose freezing the state's budget at its current level for next year.

The Star-Ledger reported Sunday the plan also calls for amending the state constitution to require voter approval of any future borrowing by the state, unless it is backed by a dedicated revenue source, such as increased tolls. Republican leaders in the Legislature have been agitating for such a move.

The administration has not revealed the actual amount tolls would rise under the plan. Corzine last summer pledged that any toll hikes would be made according to a schedule that lays out increases year-by-year, and that once the schedule was finished, it would be made public.

Experts have estimated that raising $15 billion would require tripling tolls on the New Jersey Turnpike.

But the plan Corzine will present today reduces dependence on Turnpike toll increases by creating other revenue sources, such as the tolls on Route 440, officials said.

Among the most innovative revenue enhancers, according to one person familiar with the plan, is the sale of "air rights" over the Turnpike. This plan essentially calls for constructing a bridge over certain parts of the toll road and auctioning off the right to develop the property.

The governor's office began briefing interest groups on parts of the plan last night.

© 2007 Houston Chronicle: www.nj.com

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"The Sunset Advisory Commission is scheduled to review the often controversial Texas Department of Transportation in 2009."

TxDOT critics appointed to key state commission

Jan 8, 2008

by Will Lutz
The Lone Star Report
Copyright 2008

Lt. Gov. David Dewhurst today announced his appointments to the Sunset Advisory Commission, and his appointments could spell trouble for the current brass at the Texas Department of Transportation.

Dewhurst appointed the following people: Sen. Glenn Hegar (R-Katy), Sen. Juan "Chuy" Hinojosa (D-McAllen), and Michael Stevens as a public appointee. Dewhurst designated Hegar as the vice chairman of the commission -- the lead Senator on the Sunset Advisory Commission. The appointments are important because the Sunset Advisory Commission is scheduled to review the often controversial Texas Department of Transportation in 2009.

Hegar made stopping the corridor one of the key themes of his successful Senate race in 2006.

Stevens is known for his work on the Governor's Business Council and for chairing the council's Transportation Task Force. The Task Force released a report critical of Department of Transportation's estimated costs of building roads in metropolitan areas.

The Sunset Advisory Commission was originally created to determine if state agencies needed abolition or consolidation. But its mandate has since been expanded to examine how to improve the structure of state agencies. The commission's recommendations become drafted in bill form and then those bills are considered by the Legislature in the next legislative session.

Hegar, Stevens, and Hinojosa join Sens. Bob Deuell (R-Greenville), Kim Brimer (R-Arlington), and Craig Estes (R-Wichita Falls) who are serving the last two years of their four-year terms. Hegar and Hinojosa were appointed to four-year terms, and Stevens was appointed to a two-year term. They join six appointees of the House speaker on the commission."I truly appreciate the willingness of all three of these individuals to serve on this important commission," Dewhurst said. "I know each of them will provide knowledgeable and thought-provoking contributions as the Sunset Advisory Commission undertakes the review of some of our most important state agencies."

© 2008 The Lone Star Report: www.lonestarreport.org

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"Any resemblance to free-market principles is more illusion than fact."

EZ-Pass Or EZ-Cash? Why Toll Roads Are A Bad Idea

1/7/08

By NMA President, James Baxter
National Motorists Association
Copyright 2008

Electronic transponder technology, like E-ZPass, is making toll roads more palatable, but that doesn’t mean toll roads are good public policy.

Toll roads are an inefficient, backwards approach to providing public highways. Worse, they foster corruption, political patronage, and discourage needed improvements on the rest of the highway system.

Don’t be fooled by the references to “free-market principles,” “proper pricing,” “supply and demand,” and “economic incentives” from those selling the for-profit roadways.

The truth is, any resemblance to free-market principles is more illusion than fact.

A real market-based system has willing sellers, willing buyers, and reasonably unfettered competition. Any highway of consequence falls flat from the get-go, when it comes to market principles.

First, highway corridors are not assembled by willing buyers in competition with other willing buyers. The state identifies the corridor it wants, establishes what it considers to be a politically and judicially acceptable price, and condemns the land of those sellers who disagree. This is market principles at the end of a gun barrel.

Toll road advocates argue that those who use the system the most will pay the most. Fair enough, but who determines what the buyers should pay? It isn’t competing sellers of similar services.

Highway users do not have viable alternatives to buy highway services from other sources.

For all practical purposes, there are no other sellers competing for the motorists’ business and realistic alternatives don’t exist. Toll roads are literally a monopoly that is sanctioned and protected by the state. Yet, the state’s citizens and other highway users have no channel to influence toll road management and pricing decisions.

Upgrades and improvements to any highway viewed as competing with the toll road are likely to be postponed or ignored.

Unnecessary congestion, underposted speed limits and arbitrary enforcement on alternative roads are silently condoned by transportation officials and elected officials. Think about it, toll roads can’t compete without the presence of congestion and motorist inconvenience on the public highway system. Are congestion problems going to be corrected if they threaten the income of the toll road?

Motorists found this out the hard way in Orange County, Calif., when a clause in the model contract for the 91 Freeway Express Lanes prevented expansion of the freeway’s regular lanes. As a result, congestion got so bad that in April 2002 the Orange County Transportation Authority paid $207.5 million to buy out the toll lanes that originally cost just $139 million to build.

A major retardant to the expansion of toll roads, besides arbitrary tolls, has been the inconvenience of the toll-paying systems. Little is ever mentioned of the human carnage, property damage, air pollution, and inconvenience attributable to toll-booth systems.

In exchange for removing toll-booth inconvenience, accidents, and waste, motorists are being asked to accept higher tolls and invasive surveillance technology that can monitor the movement, location, speed and operation of any vehicle on any highway or road.

While this type of surveillance will not be confined to toll roads, it is on toll roads where its use will be most easily rationalized.

Compare that to our system of fuel taxes that charge users of the highway system based on fuel consumption.

No charge cards, no electronic surveillance, no toll bureaucracy, no cameras, no roadside monitoring (no automated enforcement!), not even any toll booths! That is, apparently, way too efficient and user friendly.

Toll road proponents are fond of referring to the “new money” that will flow to highway projects. That new money comes from the same tired old wallets that pay existing highway-user fees. The difference is the highway users will pay twice; once in taxes and again in tolls.

There are billions of gas-tax dollars being siphoned off for non-highway purposes, or covering government deficits. Anyone who thinks tolls will be any less likely to be usurped for non-highway purposes is not a student of history.

As for building new highways with this new money, most new toll roads aren’t going to be new roads at all. They are going to be existing Interstates or Interstate corridors converted to toll roads — the same corridors and roads for which we have already paid.

© 2008 National Motorists Association: www.motorists.org

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"Nothing has changed."

TURF comments on the passing of TxDOT Chair Williamson

January 07, 2008

Terri Hall, TURF Exec. Director
The Walker Report
Copyright 2007

Transportation Commission Chairman WIlliamson dies at age 55, but will the Commission change course?

Transportation Commission Chairman Ric Williamson will be remembered as the most stalwart Texas advocate of privatizing our public freeway system. What some called innovative and visionary, many called double taxation and highway robbery. Certainly, no one would have wished this would be the way Williamson would end his time on the Commission. Our hearts go out to his family.

Williamson was a lightning rod of controversy and known for his abrasive style and unretractable support for what's known as public private partnerships (or PPPs). He relentlessly pushed the wholesale shift from gas tax funded freeways to a network of privatized tollways in the hands of foreign companies and unaccountable bureaucrats.

What is the first public response of the commissioners? "All four of us are committed to this approach (private toll roads), and we understand the issues," Mr. Houghton said. "The issues are this: We are out of money."

Nothing's changed. Their first response is to re-assure the private toll road industry Texas is still for sale. It's clear the current crop of transportation commissioners is committed to selling out the Texas taxpayers by hawking-up our Public Freeways to the highest bidder on Wall Street.

This is the legacy Ric Williamson and Rick Perry will leave..pushing an agenda the Texas taxpayers have repeatedly rejected and representing private interests over the public good. The Texas Transportation Institute study showed merely indexing the gas tax to inflation would meet our future transportation needs, de-bunking Commissioner Ned Holmes' claims of an unacceptably high gas tax increase as stated in a Dallas Morning News article January 1. It's time for all of these bureaucrats to go.

Replace the transportation commissioners, who are joined at the hip with the road lobby, with a single Elected commissioner! The sooner the better!

© 2008 The Walker Report: walkerreport.blogspot.com

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TTC-69: Concerns about non-disclosure requirements of Citizen Advisory Committee members are still unresolved

Trans-Texas Corridor / I-69 Segment Committees, public meetings move forward

1/7/08

By Cari Herr
Tomball Magnolia Tribune New
Copyright 2008

While Waller County constituents have been instrumental in legislation affecting the proposed TransTexas Corridor I-69 (TTC/I-69), concern over non-disclosure requirements for TxDOT Segment Committee members remains unresolved even as public meetings move forward.

The orange shaded area represents the proposed TTC/I-69 corridor through Waller County.

Public meetings

Informational town hall meetings to review and receive comments on the TTC/I-69 Draft Environmental Impact Statement are scheduled for January and February.

Citizens for a Better Waller County have been opposed to the TTC/I-69 corridor since its inception. President Don Garret said the group would hold its own meetings on Jan. 10 and Jan. 16. For more information, visit: citizens@wallercountycitizens.org.

Garret said the purpose of these meetings would be to prepare for the upcoming TxDOT town hall scheduled for Jan. 22 at the Knights of Columbus Hall in Hempstead.

A presentation from representatives of TxDOT concerning the TTC/I-69 development is on the 8:30 a.m. agenda for the Jan. 23 Waller County Toll Road Authority (WCTRA) meeting to be held at the county Road and Bridge Administration building, also in Hempstead.

Corridor plans can be reviewed and comments can be submitted at two TxDOT public hearings scheduled for Feb. 27 in Waller County. Open house is scheduled to begin at 5 p.m. with hearings to commence at 6:30 p.m.

For more scheduled meetings, visit www.keeptexasmoving.com. All comments on the I-69/TTC must be submitted by March 19.

TTC Legislation

Many in Waller County opposed to the corridor heralded Senate Bill 792 as a welcome killjoy for TTC/I-69 funding. A common interpretation of the bill, approved in the last legislative session, is that it suspends funding of Commercial Development Agreements (CDA) with foreign investors through Public-Private Partnerships over the next two years.

That is considered by some as a deterrent to the investment interest of Cintra Concesiones de Infraestructuras of Spain who has entered into limited contracts with San Antonio-based Zachery Construction Company for the TTC.

In reality, the bill exempts most CDAs that have execution dates within the two-year moratorium.

However, SB 792 does require CDA revenues, such as concessions and tolls, be used only for other projects in the region in which it is generated and limits CDA terms to 50 years. That could be considered prohibitive to foreign investors.

In addition, it makes provisions for local Toll Road Authorities to have the first option in building new toll projects. The bill in no way suspended construction on the TTC/I-35 corridor, but did put a damper on available funding mechanisms for the TTC/I-69 for at least two years.

Segment Committees

In the interim, TxDOT, a self-professed “financially challenged” entity, has responded with a $9 million marketing campaign designed to promote awareness on the proposed project.

As part of the campaign, TxDOT initiated local segment committees to be comprised of community members who are charged with gathering public preference for the project. However, one of the proposed rules of membership for Segment Committee members is to sign a non-disclosure agreement.

“How does that impact transparency and a member’s ability to report back to his constituents on the project?” asked WCTRA Director Trey Duhon at a recent meeting.

Duhon said he had requested an opinion on the proposed rule from the state Attorney General’s Office. WCTRA directors approved a resolution at a Dec. 19 meeting requesting at least one position on the TxDOT local Segment Committee.

Meanwhile, TxDOT is moving forward with its campaign to gather information for the purpose of narrowing the TTC/I-69 corridor down from the proposed 1,200-foot, six-lane behemoth of original conception, to a more rural-friendly mobility structure.

TTC/I-69 Town Hall Meetings

Jan. 22 Hempstead 6:30 p.m. Knights of Columbus Hall 22892 Mack Washington Jan. 28 Bellville 6:30 p.m. Austin County Fairgrounds SH 159 East

TTC/I-69 Public Hearings Open House 5 p.m. Hearing 6:30 p.m.

Feb. 19 Magnolia High School 14250 FM 1488 Feb. 26 Katy High School PAC 6331 Highway Blvd. Feb. 27 Knights of Columbus Hall 22892 Mack Washington, Hempstead Feb. 27 Waller High School 20950 Fieldstore Rd. Feb. 28 Grimes County Expo Center 5220 FM 3455, Navasota

© 2008 Tomball Magnolia Tribune News: www.tribunenews.com

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TxDOT Bureaucracy swells at the top

TxDOT Announces New Members of Leadership Team

Saenz expands administration to reflect changing role of agency

Jan 7, 2008

TxDOT
PRNewswire-USNewswire
Copyright 2007

Transportation today announced selections for the final three members of Executive Director Amadeo Saenz's leadership team. The new Assistant Executive Director for Engineering Operations is John Barton of Beaumont. The newly-formed office of Assistant Executive Director for District Operations will be lead by David Casteel of San Antonio. The newly-formed office of Assistant Executive Director for Innovative Project Development will be lead by Phil Russell of Austin.

"John, David and Phil are all outstanding professionals," said Saenz. "All ofthem understand the complex and serious transportation challenges our state faces, and I know they share my commitment to meeting them with hard work, dedication and creativity."

John Barton began working for TxDOT as a summer employee of the Wichita Falls District, while he was still in high school. After graduating from Texas A&M University, Barton continued his work for the department. In 2003 Barton received the President's Award for Planning from the American Association of State Highway and Transportation Officials. In December 2003, he was named to his current position as District Engineer for the eight-county Beaumont District.

As the new Assistant Executive Director for Engineering Operations, Barton will oversee and coordinate operations for nine divisions and offices. Barton will assist in directing long and short-range planning for the agency including the establishment of overall operating objectives and the technical merits of programs and policies.

David Casteel has served as the District Engineer for the 12-county San Antonio District since 2003. He holds bachelors and masters degrees from Texas A&M University and is a graduate of the Governor's Executive Development Program at the Lyndon B. Johnson School of Public Affairs at the University ofTexas at Austin.

A TxDOT employee since his first summer job with the department in 1983,Casteel served as District Engineer of the Childress and Corpus Christi Districts before moving to San Antonio.
As Assistant Executive Director for District Operations, Casteel will oversee the state's 25 TxDOT districts.

Phil Russell, a transportation engineer with 25 years state experienceincluding leadership roles in Bryan, Dallas and Austin, has served as theDirector of the Texas Turnpike Authority Division since 1998.

He oversaw the planning and development of the Central Texas Turnpike Project.The first 44 miles of the project were opened under budget and a year aheadof schedule.

Russell has directed efforts to relieve congestion on Interstate 35 in Texaswith the development of Trans-Texas Corridor 35. He is also in charge of planning TTC-69, a 600-mile multi-use transportation corridor extending fromNortheast Texas to Mexico.

Russell started work for TxDOT in 1982 and held numerous positions in TxDOT's 10-county Bryan District and seven-county Dallas District before moving to the turnpike division in Austin.

In addition to being a professional engineer, Russell is also a lawyer. In his new position as Assistant Executive Director for Innovative Project Development, Russell will oversee and coordinate turnpike/tollway projects and statewide transportation planning/ programming operations for TxDOT. He will oversee functions related to the development and operation of turnpike projects to include Comprehensive Development Agreements, market evaluations, pass-thru finance agreements, Trans-Texas Corridor activities, and long-term transportation planning.
TxDOT Executive Director Amadeo Saenz created the two new positions ofAssistant Executive Director for District Operations and Assistant Executive Director for Innovative Project Development to help meet his objectives.

"I want to make sure that our TxDOT Districts have all of the resources we can provide them to work with local officials to solve local mobility problems,"Saenz said. "Our innovative programs, including toll projects built by TxDOT, local authorities and the private sector, also deserve special focus as we work to meet our department's goals."
Barton, Casteel and Russell will assume their new roles on February 1, 2008. They join Deputy Executive Director Steve Simmons, Chief Financial Officer James Bass, Assistant Executive Director for Support Operations Ed Serna and Government and Public Affairs Director Coby Chase in Saenz's administration. Saenz took office in September of 2007.

About the Texas Department of Transportation

The Texas Department of Transportation is responsible for maintaining nearly 80,000 miles of road and for supporting aviation, rail and public transportation across the state. TxDOT and its 15,000 employees strive to empower local leaders to solve local transportation problems, and to use new financial tools, including tolling and public-private partnerships, to reduce congestion and pave the way for future economic growth while enhancing safety, improving air quality and increasing the value of the state's transportation
assets. Find out more at www.txdot.gov.

For more Information call TxDOT's Government & Public Affairs Division at (512) 463 - 8588.

SOURCE Texas Department of Transportation

Texas Department of Transportation Government & Public Affairs Division,
+1-512-463-8588

© 2008 Reuters: www.reuters.com

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RFID Technology can set off explosives in shipping containers using $20 worth of parts from Radio Shack.

Tracking chips may expose ports to attack

Report: U.S. has ignored warnings that radio technology can trigger bombs

Jan. 6, 2008

By SEAN MATTSON
San Antonio Express-News/Houston Chronicle
Copyright 2007

MONTERREY, MEXICO — Technology that tracks the contents of shipping containers could make some major U.S. sea and land ports vulnerable to terrorist attack, according to a private study.

However, a test of how easily the tracking system could be used as a bomb trigger was ignored by the Department of Homeland Security, according to one of the companies involved in the study.

The report described a recent demonstration that showed radio frequency identification technology can set off explosives in shipping containers.

Radio frequency systems increasingly are in use at U.S. ports of entry, touted as a tool for making a post-9/11 world safer. They have been adopted by the U.S. Department of Defense and companies such as Wal-Mart for tracking shipments from suppliers.

Homeland Security and one of its agencies, U.S. Customs and Border Protection, did not respond to questions Friday regarding the RFID experiment.

The test and DHS's silence regarding it have caught the attention of the U.S. House Committee on Homeland Security.

"It does raise questions, it does raise concerns," said Rep. Henry Cuellar, D-Laredo.

Cuellar, who chairs the panel's subcommittee on emergency communications, preparedness and response, said his office would contact DHS officials "to provide us their side of the story."

The technology has many applications, including retail anti-theft systems and on vehicles that have pre-paid highway tolls or are pre-cleared to use faster border-crossing lanes.

Until Powers International, which specializes in trade security and logistics, began testing the theory a few months ago, it appears no one had examined the possibility that it could be used by terrorists.

When used on shipping containers, radio frequency identification technology is a two-part system: an electronic tag or seal on a container and a reader that sends a radio signal to prompt the tag to transmit information.

In the November test, a detonator tuned to pick up a cargo reader signal set off a small explosive charge placed in an empty container.

The detonator was built by a college student using parts bought at Radio Shack for about $20, said Powers International chairman Jim Giermanski.

Giermanski, author of the report, said in an interview: "What that really means is that all a terrorist needs is an undergraduate and a case of beer."

Anne Marie Kappel, vice president of the Washington-based World Shipping Council, said she was aware of the test but had not seen a report on the results.

"Powers International has been vocally opposed to RFID technology for some time," she noted.

The American Association of Port Authorities "doesn't currently have a statement regarding the veracity of the report," said Aaron Ellis, the association's communication director.

Ellis said Wade Battles, managing director of the Port of Houston Authority, "has recently talked about his port's concerns relating to the number of different RFID systems that are being developed."

Battles could not be reached Friday and a Port of Houston spokesman could not confirm if any such systems are currently in use at the port.

mattson.sean@gmail.com

© 2007 Houston Chronicle: www.chron.com

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