Monday, January 12, 2009

TTC name change: "A public relations smokescreen to cool the white-hot opposition to comprehensive development agreements (CDAs)?"

CDAs look to survive Trans-Texas Corridor's demise


by Mark Lavergne
Dallas Blog
Copyright 2009

The Trans-Texas Corridor was pronounced dead early in the morning of January 6, at the Texas Transportation Forum, an annual conference put on the Texas Department of Transportation. But the death may represent less a change in substantive policy than a change in nomenclature, a public relations smokescreen to cool the white-hot opposition to comprehensive development agreements (CDAs), also known as "public private partnerships."�

The "death" of the Corridor does not mean the death of toll roads in Texas, and it certainly does not mean the death of CDAs.

"We’re talking toll roads," said Texas Farm Bureau president Kenneth Dierschke in a statement. "We’re still talking comprehensive development agreements, which allow foreign companies such as Cintra-Zachary to have a huge stake in the future of Texas transportation. We’re still talking massive projects. We’re still talking about the taking of private property."

CDAs live on�

The gargantuan project will now be broken down into a series of smaller projects, known as the Innovative Connectivity in Texas, which will include I-69, SH 130, and Loop 9. Whereas the original vision for the Corridor included a 1200-foot right of way meant to take in roads, and rail, and utilities, etc., the connectivity plan will be slimmed to 600 feet.

Sen. John Carona (R-Dallas) said "people are desirous of keeping all options on the table, recognizing that our transportation challenge is enormous in this state, and to foreclose any opportunity would be a foolish one as we try to use a multi-pronged approach to addressing the literally millions of dollars in pent-up transportation projects."

Carona highlighted recommendations from the Senate Transportation and Homeland Security Committee’s interim report, released over the holidays. Front and center was the recommendation for buyback provisions in the CDAs.

The financial community does not turn cartwheels over such provisions. But, Carona said, "it’s one of the things that members of the Legislature feel very strongly about." Carona told the forum that he was filing legislation to extend the Sunset deadline for CDAs by another six years.

Sen. Robert Nichols (R-Jacksonville) said Texans could expect to see more toll roads, local communities should get first crack at building their own, before private equity enters the picture. "If they feel like something has been shoved down there throats, it’s not going to be a successful project," he said. "It’s going to be a nightmare. … The local communities need to be involved early on in that project."

Rep. Carl Isett (R-Lubbock) said that public private partnerships are really "just a contract" which could have a "pay provision that suits your needs." He said the Legislature could be looking at developing a state agency that specializes in public private partnerships, and echoed Carona’s sentiment, saying now is "a terrible time to take tools out of the toolbox."

What to look for

Lawmakers gave a pretty clear picture of what to look for, transportation-wise, in the 81st session.

"This will be a busy session in transportation," Carona said. "Many described last session as the ‘transportation session,’ but I will tell you that the work we had last session to do I think pales somewhat in comparison with what lies ahead." The main goals, he said, are to relieve congestion in the least expensive way possible and to improve mobility.

Here’s a look at the issues discussed at the forum:

Fixing (or at least changing) TxDOT. It is evident that legislators have started playing nice with TxDOT, if only because TxDOT has started playing nice with them.

Carona, for starters, lavished praise onto TxDOT’s chairwoman, Deirdre Delisi, of whose appointment he had been originally quite skeptical. Lt. Gov. David Dewhurst also expressed excitement over TxDOT’s improved responsiveness during his keynote address on Jan. 7.
Carona defended the streamlining of TxDOT’s functions and said it would actually cost less to create a new agency to handle motor vehicles. "It would actually create greater efficiency," he said.

Isett also expressed support for creating the new agency. If the forum is any indication, the change in the leadership structure of TxDOT, particularly moving to a single appointed
commissioner, may be less popular. Carona, Isett, and Nichols all reiterated opposition to creating a single appointed commissioner at TxDOT.

"Having five commissioners adds value to the system," Isett said.

"I do not want to see the Legislature at this point in time," Carona said, "become so bogged down in the issue of changing the structure as to overlook the real issues which are finding ways to affordably build roads and finding ways to finance them."

Diversions from Fund 6.

Carona said he was confident that there would be fewer diversions from Fund 6 in the next session, but said "I don’t think it’s a meaningful gesture if it’s done without a constitutional amendment which redefines what the purpose" of the fund is. Nichols said he would "jump on that in a heartbeat."

Transportation Finance.

Carona called for indexing the gas tax to inflation, which has always been a tough sell. "We have
to do something about this situation," he said. He observed that indexing the tax would cost the average driver merely about $15 a year. By contrast, Carona said, in a decade a driver could be spending $10 to $15 a day in tolls.

But Isett said he would oppose indexing gas tax to inflation. "As a student of economics I have … a problem with indexing the gas tax," he said.

"If you put an inflator on a bill of goods that’s in the basket," he explained, "then it causes the basket to go up, causing the inflator to go up, causing the basket to go up, so it becomes circular. … It will generate more money, but it’s not, from an econometric standpoint, a very good idea." Isett said he would introduce a constitutional amendment to set a cap on how much surplus money the Legislature can save, and have the rest be placed into a capital infrastructure fund.

Carona said that tolls and the gas tax would probably both be part of the solution to transportation finance, saying that the public would accept a "meaningful balance" between toll roads and tax-built roads.

Another piece of the puzzle may be the use of the $5 billion in bonds which voters approved in November 2008. Carona said the Legislature will now have to pass the enabling legislation to free up the $5 billion in bonds to pay for major road projects in Proposition 12.

Rail. Carona said there will be a lot of talk in the next session about regional rail, including money for rail relocation. He is currently working on an initiative in North Texas but said he has heard of interest in rail elsewhere in the state.

He also said he will be looking at inner-city high-speed passenger rail, "something that the Legislature for the last 15 years has had a history of start and stop ... I think the time has come to be able to provide high-speed rail in Texas." Carona said high-speed rail will require private capital.Isett also said he has asked his colleagues to consider putting a rail division inside TxDOT.

Property owner’s bill of rights.
Carona said he expects the property owners’ bill of rights to return to the Capitol next session. But he said Perry "had good reason" to veto HB 2006 last session."Transportation expansion in our state is something that we can’t turn back," he said. "It’s absolutely necessary in order to meet population projections in the state. But I think we can do that in a state as big as Texas and still be sensitive to the rights of property owners."

Dierschke said he hopes such legislation is not lost in the "TTC shuffle.""Eminent domain reform was never about the Trans-Texas Corridor only," Dierschke said. "However, the thousands and thousands of acres of farmland subject to takings by the TTC brought the issue to light. And the chance for reform is now."

© 2009

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