Monday, June 22, 2009

"Political corruption involving roads in Texas is a matter of long tradition..."

Transportation Politics and the Austin Road Lobby (Part II)

Texas transportation politics, the developers and those pesky populist reformers

I-35 in downtown Austin. Photo by noname 77065.


By Roger Baker
The Rag Blog
Copyright 2009

The Author has been an observer of transportation politics in Austin since about 1979, beginning as a transit advocate, and then observing the sad failure of the Austin Tomorrow Plan; this is still official Austin growth policy but is mostly ignored due to the political influence of special interests tied to land development. While it is convenient to use the term "Road Lobby", in many ways locally it is actually a land development lobby.

How it got to be that way

Given the strong historical role of real estate in Texas politics, it was almost inevitable that a politically powerful road lobby would evolve. Political corruption involving roads in Texas is a matter of long tradition, dating back to the period soon after the Texas Highway Department was established in 1916. After Texas Gov. James "Pa" Ferguson was impeached for corruption in 1918, his wife "Ma" Ferguson ran and won in 1924 and she became Texas' first woman Governor. Subsequently, road contracting scandals kept her from being reelected in 1926. Here are some details about these early days of Texas road politics:
"...Throughout the 1920s and 1930s the department remained a focal point of Texas politics. The 1924 gubernatorial election of Miriam Amanda Ferguson placed the state road agency in a politically precarious situation, since control of construction and maintenance contracts meant potentially lucrative patronage to Ferguson supporters. A legislative enactment passed a year before Ma Ferguson's election staggered the terms of the highway commissioners, and she appointed all three members of the reorganized highway commission. Her appointees soon took political and monetary advantage of a vulnerable road program..."
Later, the road scandals and a relative lack of road money during the depression years caused the Texas Highway Dept to clean up its political act. Dewitt Greer, a celebrated TxDOT director, kept TxDOT politics clean for decades.

The 1950s saw easy federal money for new interstate highways under President Eisenhower, and lots of new road contracts; roads were apparently a permanent growth industry. With the advent of the federal highway trust fund, roads came to be considered a sort of permanent land developer entitlement. See the Texas Monthly link to Griffin Smith's story in Part 1 of this series.

Increasingly since the Carter Administration, notably under Reagan, and up until only a few years ago, most of the federal “social economic and environmental” regulations governing roads became increasingly lax and weakly enforced. As one telling example, CAMPO is self-certified; the feds let CAMPO vote to proclaim they are complying with all the federal law. In effect the foxes get to vote on whether they steal chickens.

Road privatization plus easy credit under lax rules led to new suburban roads being generously proposed to meet future land development projections supplied by the developers themselves. The road lobby thus flourished as a special interest coalition with hundreds of millions of dollars worth of real estate loans at stake. Increasingly TxDOT formed political alliances with the interests that benefited from road-based growth. Rarely if ever have TxDOT Commissioners been appointed on the basis of transportation expertise rather than political or business connections. Meanwhile, in the mid-1980's, public transportation got only about 1% of TxDOT's funds.

The fading of the Sharpstown era building bubble in Houston sent a lot of cash trapped in Texas by intrastate banking law to Austin. The Savings and Loan bubble especially contributed to making Austin a hot growth area in the mid-1980s. It seemed easy to recruit an endless supply of high tech jobs. Some of the land development politics of that era is detailed in Harvy Katz's book Shadow on the Alamo.

These factors all helped to stimulate a big new development boom in the Austin area. Developer lobbyist Ed Wendler Sr. was notably active in lining up political support and votes on the ATS for the "Outer Loop,” or SH 45, a giant ring road proposed to circle Austin. The SH 45 ring road was favored by an influential group of suburban land developers. Soon the road ran into trouble as part of the fallout after the Texas Savings and Loan bust killed off the construction boom. Key developers who had promised to donate free right of way for the Outer Loop went broke in numbers sufficient to delay its construction. Here is how the author reported the situation in July 1986. The end of the mid-1980s Austin growth boom caught nearly everyone who benefited from it completely by surprise. Go here, here, here, and here.

Austin has since seen several boom and bust cycles. Here is how the Austin region land development lobby, tied closely to roads, looked to the author in 1994, in terms of regional growth policy:

Not a lot has changed since the mid-1980s in the way the politics operates, except nowadays the road lobby is now much better organized to resist populist meddling in the affairs of those promoting roads. And the public money is running out fast.

Now, almost a quarter century later, this same Outer Loop, SH 45, has been largely built as pieces under different names. The west side of the loop was always to be the existing Ranch Road 620 and US 71. The east side of the Outer Loop has been constructed as the SH 130 toll road. Two more sections, SH 45 N and SH 45 SE are now open as toll roads. Meanwhile, the road lobby is still trying to build a remaining portion of the loop, SH 45 SW, as a new road over the Edwards Aquifer, but nobody knows where to get the money to build it. Travel demand on the existing segment of SH 45 SW is about flat, but the road lobby hasn't given up. Here is the business media pitch to encourage this SH 45 SW in January 2009, which still assumes the politics can overcome the money problem.

The Austin road lobby now

Texas transportation infrastructure is obviously of key importance to the Texas economy and the TxDOT budget reflects that. TxDOT had learned to depend on a continually growing budget of about $8 billion a year, but that is shrinking and TxDOT is under broad political attack. The major road building decisions in Texas are in essence almost totally political. This is because the governor appoints the TxDOT board that then channels most of the state and federal gas tax money down to the local level; predictably, TxDOT Commission appointments by the Governor have become a traditional political reward.

Meanwhile, TxDOT's gas tax dollars have been falling increasingly short of traditional expectations for more than a decade. TxDOT now usually requires new roads to be "leveraged" by seeking local matching contributions including toll road bonds from those who seek roads. Given this situation, it is understandable that transportation lobbying has become an important part of Texas politics.

Local Austin area lobby groups revolving around real estate now complement TxDOT's old traditional state level allies tied to state road contracts. Between sporadic populist uprisings opposing toll roads, etc., CAMPO's Austin meetings tend to be dominated by well-dressed businessmen representing the many interests that stand to benefit from roads.

The road lobby, sometimes called the highway establishment, is a sort of constellation of allied special interests, with TxDOT at the center. A leading example of a powerful statewide TxDOT-associated lobby is Associated General Contractors, or AGC, a politically active coalition, with many offices across the state.

Texas Good Roads Association. Spend more on roads.

The Texas Good Roads Association tends to focus more on organizing local Texas political support among community leaders and politicians to support spending on roads. It has not been too difficult for a powerful state agency like TxDOT to have its friends line up political support for spending on local roads. Since road funding is a discretionary political decision of the TTC, local governments have learned to either play ball with TxDOT, or lose favor and get no roads:

Always politically active in the background, but ordinarily trying to keep a low profile is the Greater Austin Chamber of Commerce. When exploring groups like this, one should study the memberships of the various boards and committees and subcommittees. Then google the important individuals to get an idea of the many common ties among the lobby groups, hinting at the political dynamics below the surface.

The Real Estate Council of Austin, RECA, has long been active in promoting roads, generally to the exclusion of rail. Dependable and profitable new home construction has been thriving in the suburbs, with the help of publicly funded roads, for the last thirty years in the Austin area. It is how much of the private money is and has been made in the Austin area. As a group representing many of those who depend on and closely represent suburban sprawl growth beneficiaries, RECA can be depended on to turn out its realtors and home builders for contentious road hearings at CAMPO to weigh in on the side of lots of public funds money for roads and toll roads to serve future sprawl development.

There are sometimes road lobby efforts that seem to arise from nowhere. "Take on Traffic" is a local road lobby group funded by none other than the Greater Austin Chamber of Commerce, as you can see from the fine print at the bottom of the following link. This site closely reflects the recent position taken by Sen. Watson in the current legislative session, to support a local option (ten cent gas tax) funding. This is thought to be the best of the politically unpopular options as the state money runs out. What this potential local revenue is intended for is not clear:
"...With troubling news of shortfalls from the federal government and the Texas Department of Transportation, the time has come to allow communities the option to generate additional funding locally for transportation projects to help meet our increasing mobility needs."
The Capital Area Transportation Coalition, pronounced "kat-see,” is a primarily road lobby headed by Bruce Byron who comes to nearly every CAMPO meeting, often to urge more road funds. CATC, like the other branches of the road lobby, actively promotes roads that serve suburban real estate interests, often with the help of the drowning-in-traffic argument:
…More cars, more driving. Right now, there are about four cars for every five people in Central Texas. In five years, there will be at least another 130,000 cars on the road. And those cars are driving farther and longer as the region expands into the surrounding counties. Right now, Central Texans are spending nearly an hour every week -- 51 hours a year -- stuck in traffic, and that figure is rising. And our roads are becoming less safe. Our rate of traffic fatalities is 45% above the national average...
The local business press works hard to perpetuate the ever-increasing-traffic myth, usually also focusing on roads. The Austin Statesman newspaper has had an obvious incentive to be supportive of car-centric transportation solutions, since a large portion of its ad money has historically come from cars and suburban real estate. The local business press like Neighborhood Impact News and the Austin Business Journal have been historically supportive of spending public money on roads to serve proposed low density development.

Here is another example:
...Texas A&M University’s Texas Transportation Institute (TTI) calculates travel delay (the amount of extra time spent traveling due to congestion) in Austin at an index of 1.22, meaning peak hour travel takes an average of 22 percent longer than free flow travel as of June 2004. Today, Central Texas residents spend an additional 52 hours each year in their vehicles because of congestion on our jam-packed roadways. That extra time in our cars, trucks and SUVs costs each of the travelers about $1,000 during the year, which is a higher cost than those commuters in Seattle, Baltimore, Philadelphia, Denver, Phoenix and San Antonio -- all cities much larger in square mile and in population than we are -- endure. We are stuck like Chuck in traffic, and the motors are all running...
Recently, while conspicuously avoiding the funding shortfalls, a common position of the Austin area business press is trending increasingly toward advocating BOTH roads and rail:

Money Problems

Until about 2006, with the help of leveraging such as Texas Mobility Fund borrowing, the road contracting money flowed freely, and TxDOT kept building. Under TxDOT Commission Chair Ric Williamson, TxDOT got pretty sloppy about its finances. Due largely to the Trans Texas Corridor, TxDOT had gotten a reputation for arrogance from rural landowners who saw no benefit from a huge new $185 billion network of roads a quarter mile wide crisscrossing the state. Then TxDOT got wide and unfavorable attention for double counting over a billion dollars in revenue.

District 14 of TxDOT, which handles the Austin area, finally had to admit to CAMPO in late 2007 that its accumulated Austin area road commitments were so great that it was being forced to turn over responsibility for building a bundle of promised new toll roads to the CTRMA, and henceforth concentrate on maintenance.

As Texas Transportation chair Ric Williamson said in May, 2004: "It's either toll roads, slow roads or no roads." TxDOT coordinated closely to help the CTRMA to contract and build its first and only toll road, US 183A. In fact, Regional Mobility Authorities like the CTRMA were being actively promoted and groomed by TxDOT statewide to shoulder the responsibility of funding and building regional toll roads without being subject to the usual state and federal laws applying to TxDOT.

In the case of Austin, TxDOT has used a TxDOT subagency called the Texas Turnpike Authority to build a group of toll roads including SH 130, SH 45 N and SW, and MoPac North. This raises the following question. If TxDOT can build and operate these existing toll roads, then why can't they also build the same ones that they are now expecting the CTRMA to build? Probably this is because the CTRMA can wheel and deal on financing and avoid a lot of existing state law that TxDOT finds burdensome. In fact, the CTRMA appears to coordinate closely with TxDOT on projects like US 290 E. The CTRMA offers legal advantages plus a financial firewall that protects the big dog with deep pockets in the road game, which is TxDOT, from bond holders.

Trains (literally) arrive in Austin.

Rail becomes a factor

Recently, local business interests and politicians (previously anti-rail former Rep. Mike Krusee being one example) have begun to recognize that roads alone cannot meet the anticipated future travel demand, leading them to now support passenger rail. Dallas-area support for expanded rail transit through Sen. Carona was one of the main reasons for Texas Senate support of the local option transportation tax, which failed when HB 300 died in the Texas legislature.

The Central Texas transportation lobby is not a pure road lobby anymore. The ASA rail lobby group now has the favor of key elements of the Austin-San Antonio political establishment, although they don't have much money because TxDOT, under the Texas Constitution, and due to the road lobby, has to spend most of its gas tax money on roads. Furthermore, ASA lives under the thumb of TxDOT, which now regulates rail. ASA managed to get about $8.7 million in new rail planning money from the Texas legislature to keep the doors open, but this is far short of the $1.8 billion or so it will take to move rail freight to the east of IH 35 and unclog the existing line UP line for passenger service.

Nowadays, there is even an Austin-area wing of the political establishment supporting transit; the Alliance for Public Transportation or A4PT (here and here), has joined forces with the road lobby as we can see below. A4PT chair Joe Coffee, is also the Elgin city planner. He was appointed by Sen. Kirk Watson, incidentally an Elgin Frontier Bank co-owner, to CAMPO's Transit Working Group. The Green line is meant to serve transit oriented development in the Elgin area. Coffee seeks to promote rail projects like the Green line to Elgin.
"CATC and RECA have joined with the Austin Chamber of Commerce, Downtown Austin Alliance, and the Alliance for Public Transportation for something more important than the old ‘road verse rail’ battle lines… more local funding and the chance to fight over that later."
Pesky Persistent Populist Reformers

Austin has always had a lot of environmentalists and they decided pretty early, through the Austin Tomorrow Plan, that they did not want any new roads over the Edwards Aquifer. By about 1980 CAMPO's earlier incarnation, the Austin Transportation Study (ATS), had already become a focus of the developer versus environmentalist conflict. When (later Governor) Ann Richards became Travis County Commissioner, she publicly sided with the environmentalists fighting to keep TxDOT, and interested land developers like Gary Bradley, from making MoPac into a second crowded version of the IH 35 now leading to the Edwards Aquifer. Since that era there has been a more or less constant string of battles going on between environmentalists and the increasingly organized road lobby, trying to keep building roads to serve expanding rings of sprawl development.

The road lobby and TxDOT have always been more than happy to blame environmentalists for stopping roads. The truth is that any fair appraisal of the Austin area situation would show that over-optimistic road planning, blind to funding limits, has been a much more important factor. Road opposition has now widened from the early liberal environmentalists, even Earth First! in the early 1990s, to a much broader political spectrum of transportation reform advocates, now active statewide. Everyone can see the existing system is corrupt and badly needs reform, although not everyone can agree on how to fix it.

There is even a documentary video, "Truth Be Tolled.” Lots of rural conservative Republican property owners, Libertarians, and grass roots environmentalists opposed the Trans-Texas Corridor, largely on the basis of opposition organized and supported by web activists David and Linda Stall.

In Austin there is still a strong anti-toll road coalition, partly due to reform politics and Libertarian influence. Muckraker/anti-toll road and skilled media activist Sal Costello played a major role in organizing Austin toll road opposition in 2006 and 2007.

Currently, Terri Hall's TURF group in San Antonio is probably the most active group fighting TxDOT, the road lobby, road taxes, and toll roads:

And the environmentalists remain active, especially in the Austin San Antonio area. As one example, SH 45 SW has been actively promoted as a new road over the Edwards Aquifer to serve new commuters in Hays County who face a lot of congestion getting onto Southern MoPac. But roads like this to serve development over the Edwards Aquifer have always attracted strong opposition from Austin environmentalists. As of now, SH 45 SW is on hold, remaining a magnet for environmentalist opposition, and without a plausible funding source.

Likewise, US 290 W at the "Y" at Oak Hill in Austin is stalled partly by some federally required studies, but more seriously from a lack of money from the CTRMA that has accepted responsibility for rebuilding this road as a toll road. This road is now on the back burner. Likewise the CTRMA's US 290 E toll road is under attack from a swarm of activists. TxDOT approved stimulus funds for building an interchange at US 183, but this toll road would cost about $620 million and most of the funds to build this road are hypothetical. Actual travel demand on both these roads has been flat for years.

Statewide, the opposition to the Trans Texas Corridor became heated enough to make the TransTexas Corridor a campaign issue for former Comptroller Carol Strayhorn. She also wrote an exposé about the politics behind the CTRMA.

Now Perry's big TTC toll road network has even become a prime political target for Sen. Kay Bailey Hutchinson, who is expected to run for governor. United citizen opposition to TxDOT's traditionally heavy handed policies have thus taken a heavy political toll on that agency. TxDOT is now widely unpopular across the state,

In fact, TxDOT came under heavy political attack in the recent session of the legislature, and TxDOT got abolished as a state agency, although a special session will fix that. And they are out of money, unable to issue the $5 billion in bonds authorized by voters. Sen. Carona, promoting a local option fuel tax as part of the ill fated HB 300, held a press conference announcing that TxDOT may have to quit building ALL new roads by 2013. But it gets worse. Austin and San Antonio are both strapped for transportation cash. There is the matter of $5 billion in unissued bonds authorized by Texas voters, That amount was shrunk to $2 billion to make it more politically appealing, but even this did not pass the Texas legislature. Lots more problens detailed here.

The bad news for TxDOT just keeps on coming, and with it much of the future that The Texas road lobby had mapped out before the recent legislative session, much of which was tied to HB 300. If there is any good news for TxDOT and the road lobby, it is probably that Gov. Rick Perry has called a special session of the legislature to save TxDOT from being permanently "sunsetted" into oblivion. Also TxDOT's political clout in the legislature prevented serious reforms called for by the Texas Sunset Commission, like an elected transportation Commission, from being passed with strong support from the Texas House of Representatives. See the Sunset Advisory Commission Staff Report, here:

TxDOT is at this point quite unlikely to regain anything like its former political clout. This is because it is now so politically unpopular, together with the fact that it is essentially broke. Locally the CTRMA's toll road bonds are almost certain to default within a decade or so, due to rising fuel prices due to peak oil.

If the problem facing TxDOT was peak oil alone, it would be bad enough, but now the United States faces complex interacting economic factors tied to peak oil (see here, and here; trying to solve one problem only tends to worsens others, like reducing the strength of the dollar.

See Part 1 of this series: Roger Baker: Austin Drowning in Traffic Growth? Think Again by Roger Baker / The Rag Blog / June 7, 2009

See Roger Baker's earlier Rag Blog articles on Austin transportation here, here, and here.

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