Rick Perry's Texas Department of Transportation: "Intractable. Defensive. Secretive. Broken."

A Hard Road

Also see related link: "TxDOT still doesn’t get it"

2/4/10

by Abby Rapoport
The Texas Tribune
Copyright 2010

State lawmakers have their own special vocabulary for describing the Texas Department of Transportation: Intractable. Defensive. Secretive. Broken.

Bill Meadows knows what they're getting at. “I don’t think we are fully succeeding,” says Meadows, a non-combative voice on the five-member Transportation Commission. “On our very best day we probably are getting a ‘C’.” If you listen to state legislators, even that constitutes grade inflation.

Meadows is hopeful systemic change can come from the top. As a newer commissioner with little political baggage — the Fort Worth businessman was appointed to TxDOT in 2008 — he has watched the relationship between the agency and the Legislature continue to devolve over controversies like eminent domain, toll roads and gasoline taxes. Senators and representatives, Democrats and Republicans, have called for reform and transparency. Well-liked by members on both sides of the aisle, Meadows hopes that he can begin to repair legislative-transportation relations, and some lawmakers seem willing to give him a shot. “He knows, maybe better than any other commissioner, that the personality of that agency has run amok,” says Rep. Lois Kolkhorst, R-Brenham.

TxDOT is in the crosshairs this year and next. It's one of the biggest government entities going through a review by the Sunset Advisory Commission, in which it has to prove its worth or get reorganized, restructured or (unlikely but theoretically possible) put out of business. The process provides an opportunity for legislators to express the wishes and ire of their constituents over things like privatized highways, traffic jams and road construction. Lawmakers tried to drive TxDOT through Sunset and then the Legislature last year, but proposed changes and reforms fell apart at the end of the session and are back for another attempt this year and next.

Meadows and his fellow commissioners are trying to get things in order. The first step, he says, is embracing the reality: TXDOT isn’t meeting the transportation needs of Texas citizens. “I think a good dose of straight up honesty is the way to go,” he says.

The second step: diagnosing the problem. TxDOT's greatest strength — its long-tenured employees — is also its greatest weakness, according to Meadows. For instance, two TXDOT officials now in senior positions started their careers with the agency while they were in high school.

That sort of institutional loyalty is incredibly valuable, Meadows says, but also creates a culture of insiders and outsiders that hinders working relationships with the Legislature and the public. “We have over time been a little more defensive than we needed to be,” he says. “We have been a little more argumentative than we needed to be.” When Meadows suggested the agency conduct day-long workshops to explain its business and plans in detail, some employees were aghast at the idea that those meetings would be open to the public. “I went, ‘So?,’” he says, pausing. “We’ve got to work through some of the personalities.”

Sen. John Carona, R-Dallas, who chairs the Senate Transportation Committee, says some of the damage from that approach will take a long time to patch. “Many people are so wrapped up in negative feelings toward the agency that it is difficult at times to put those aside and work towards fixing the problem,” he says. Carona adds that some of that trouble comes not from the agency's staff but from the Transportation Commission itself, which is perceived as being a mouthpiece for Gov. Rick Perry. “The commission has become far too politically charged to do the job,” Carona says.

A wholesale re-do?

Other legislators direct their ire at the agency's executives. Sen. Kirk Watson, D-Austin, says even if commissioners like Meadows have good intentions, that won’t necessarily stop the staff from interfering with policy. “The commission is the commission and the staff is the full-time professional staff, and they ought to be professional about it,” he says.

Watson says he worked with TxDOT to find discretionary money for the rail relocation fund, which will help rail in the state. Now, he says, TXDOT is arguing against that implementation of the bill. “TXDOT was advising me on how to make this bill workable, only to figure out ways to screw it up when the legislative session was over,” he exclaims.

The distinction between staff and leadership can be dramatic. Sen. Wendy Davis, D-Fort Worth, worked with Meadows during her time on the Fort Worth City Council, and she has nothing but kind words for him. "He has a way about him," she says. "He works in a way that doesn't threaten the interests that other people bring to the table." But when it comes to working with TxDOT staff, her story is similar to Watson's. Regarding her bill to place gas pipelines in a TxDOT right-of-way, she says she didn't feel the agency “had been an honest broker with me. It became clear when it got to the governor’s desk that they actively worked against it even though they professed to support the final version, [which had] their input.”

Kolkhorst says the agency has taken some of the criticism to heart. “When you ask a question, you get an answer. That is a new revelation for me,” she says. Rep. Joe Pickett, D-El Paso, believes the whole agency needs changing, from the top down. “I don’t see [the relationship] changing until there is a wholesale re-do,” says Pickett, who, like the others, was in the middle of last year's Sunset fight over the agency.

Meadows argues the criticisms aren’t exactly fair. The agency doesn’t have the money to meet lawmakers’ expectations, he says — a point Kolkhorst and Carona acknowledge. He points to the 2030 Committee, which plans for future transportation needs, and the bleak shortages projected. “What I know is, whether it’s $86 billion or $350 billion or whatever billion, you’re still so far short it’s almost an academic exercise,” he says.

And when staffers do try to do something innovative, he says, the Legislature doesn’t give them a chance.

Take the Trans-Texas Corridor: The effort to create a new approach to statewide travel has been universally bashed for its infringement on private property and its reliance on toll roads — so much so that Perry, its biggest promoter, has abandoned the project. “Did Trans-Texas fail because of bad process," Meadows asks, "or because it was a bad idea? It has caused this agency to be criticized and damned, but that doesn’t mean the efforts are bad.”

If lawmakers aren’t going to allow for creative ways to find revenue, Meadows says, then it makes the agency's relationships with them all the more important. The Legislature is “far and away” the best place to secure funds, he says. “I’ve never forgotten that.”

© 2010 Texas Tribune: www.texastribune.org

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE

“Perry's elitist attitude is this: if you can't afford the toll lanes, you can sit in congestion on the stop-light ridden access roads."

Perry’s debate fib about state law prohibiting tolling existing freeways repeated in news report

2/3/10

Terri Hall
Texans Uniting for Reform and Freedom
Copyright 2010

Confusion persists about whether or not it is legal to convert free highway lanes into toll lanes in the state of Texas, despite Governor Rick Perry’s claim that it is illegal during the January 29 Republican gubernatorial debate. In an article in the Dallas Morning News February 1, TxDOT spokesman Chris Lippincott stated:

"’The department has made it clear that we have no interest in tolling existing lanes,’ Texas Department of Transportation spokesman Chris Lippincott said this afternoon, when told of the Obama budget provision. ‘Whether we are prohibited from doing so in federal law is irrelevant,’ he said.

The article goes on to say...
“And it wouldn't be easy, even if the state's Transportation Commission didn't have a policy in place that effectively abides by the moratorium. To turn a freeway (or even a single lane of existing roadway) into a toll road, TEXDOT would need a waiver from the Federal Highway Administration. These are granted only rarely. Then, state law requires approval from the county commissioners and then from a county's voters.”

Terri Hall, Founder of Texas TURF counters, “Not only is TxDOT planning to toll existing lanes, they're lying about it. The feds are not only aware of the plans for US 281 in San Antonio in particular, it had already granted clearance until we sued to stop them. So rare or not, the feds granted it.”

Perry's greatest fib of the January 29 debate was his insistence that the Texas legislature passed a bill in 2005 prohibiting the conversion of free lanes to toll lanes. However, the bill, HB 2702, tells precisely how TxDOT can LEGALLY convert existing highway lanes into toll lanes through 6 exceptions, one that allows a conversion of free lanes by simply downgrading the free lanes to access roads adjacent to the tollway.

Though the language doesn’t specifically use the term “access roads” to refer to the relocating of free lanes adjacent to the tollway, TxDOT has consistently interpreted the law to mean it has the authority to downgrade freeway lanes to access roads without triggering a public vote based on HB 2702. See the two-part discussion of this law before the Sunset Commission in 2008 here and here. Part-two shows TxDOT Executive Director Amadeo Saenz stating TxDOT’s interpretation of HB 2702 allows highway lanes to be downgraded to access roads.

The bill also contains a gaping grandfather clause that exempts virtually all the toll projects currently on the table (because they were designated as toll roads in MPO plans prior to September of 2005), so no public vote would be triggered for the dozens of grandfathered toll projects.

“Perry's elitist ‘you can eat cake’ attitude is this: if you can't afford the toll lanes, you can sit in congestion on the stop-light ridden access roads. He thinks replacing free highway lanes with access roads is acceptable and his highway department is doing it all over Texas,” says Hall.

The citizens’ fight to stop the conversion of existing FREEway lanes into toll lanes on US 281 and Loop 1604 in San Antonio, 290 West in Austin, and Hwy 59 in East Texas (part of Trans Texas Corridor TTC-69 that’s still alive and well), has languished precisely because of the loopholes in HB 2702.

TURF worked 24/7 in the last session to fix these loopholes. Rep. David Leibowitz of San Antonio introduced a bill to do so and got it attached to the TxDOT sunset bill (but it was stripped in the Senate).

“Texans deserve protection from the DOUBLE TAXATION of converting freeways into tollways. Perry was dead wrong to imply Texans are protected in state law. They’re not, especially for the exempted Trans Texas Corridors, like TTC-69, that will ‘upgrade’ existing freeways (like Hwy 59) into tollways at the hands of foreign companies,” Hall emphasized.

See detailed proof of the freeway to tollway conversion plans for US 281 on this web site: http://www.281overpassesnow.com.

Portion of HB 2702 that addresses converting existing highways into toll roads –

SECTION 2.36. Chapter 228, Transportation Code, is amended
by adding Subchapter E to read as follows:

SUBCHAPTER E. LIMITATION ON TOLL FACILITY DETERMINATION; CONVERSION OF NONTOLLED STATE HIGHWAY Sec. 228.201. LIMITATION ON TOLL FACILITY DESIGNATION.

Except as provided by Section 228.2015, the department may not operate a nontolled state highway or a segment of a nontolled state highway as a toll project, and may not transfer a highway or segment to another entity for operation as a toll project, unless: (1) the commission by order designated the highway or segment as a toll project before the contract to construct the highway or segment was awarded; (2) the highway or segment was open to traffic as a turnpike project on or before September 1, 2005; (3) the project was designated as a toll project in a plan or program of a metropolitan planning organization on or before September 1, 2005; (4) the highway or segment is reconstructed so that the number of nontolled lanes on the highway or segment is greater than or equal to the number in existence before the reconstruction; (5) a facility is constructed adjacent to the highway or segment so that the number of nontolled lanes on the converted highway or segment and the adjacent facility together is greater than or equal to the number in existence on the converted highway or segment before the conversion; or (6) the commission converts the highway or segment to a toll facility by: (A) making the determination required by Section 228.202; (B) conducting the hearing required by Section 228.203; and (C) obtaining county and voter approval as required by Sections 228.207 and 228.208.

Sec. 228.2015. LIMITATION TRANSITION. (a) Notwithstanding
Section 228.201, the department may operate a nontolled state
highway or a segment of a nontolled state highway as a toll project
if: (1) a construction contract was awarded for the highway or segment before September 1, 2005; (2) the highway or segment had not at any time before September 1, 2005, been open to traffic; and (3) the commission designated the highway or segment as a toll project before the earlier of: (A) the date the highway or segment is opened to traffic; or (B) September 1, 2005. (b) This section expires September 1, 2006.

SECTION 2.37. Section 362.0041, Transportation Code, is
transferred to Subchapter E, Chapter 228, Transportation Code,
redesignated as Sections 228.202-228.208, and amended to read as
follows:
Sec. 228.202 [362.0041 ]. COMMISSION DETERMINATION [CONVERSION OF PROJECTS ]. The [(a) Except as provided in Subsections (d) and (g), the ] commission may by order convert a nontolled state highway or a segment of a nontolled state highway [the free state highway system ] to a toll project [facility ] if it determines that the conversion will improve overall mobility in the region or is the most feasible and economic means to accomplish necessary expansion, improvements, or extensions to that segment of the state highway system.

Sec. 228.203. PUBLIC HEARING. [(b) ] Prior to converting a state highway or a segment of a[the ] state highway [ system ] under
this subchapter [section ], the commission shall conduct a public
hearing for the purpose of receiving comments from interested
persons concerning the proposed conversion [transfer ]. Notice of
the hearing shall be published in the Texas Register, one or more
newspapers of general circulation, and a newspaper, if any,
published in the county or counties in which the involved highway is
located. Sec. 228.204. RULES. [(c) ] The commission shall adopt
rules implementing this subchapter [section ], including criteria and guidelines for the approval of a conversion of a highway. Sec. 228.205. QUEEN ISABELLA CAUSEWAY. [(d) ] The commission may not convert the Queen Isabella Causeway in Cameron
County to a toll project [facility ].

Sec. 228.206. TOLL REVENUE. [(e) Subchapter G, Chapter
361, applies to a highway converted to a toll facility under this
section. [(f) ] Toll revenue collected under this section:
(1) shall be deposited in the state highway fund;
(2) may be used by the department to finance the
improvement, extension, expansion, or operation of the converted
segment of highway and may not be collected except for those
purposes; and (3) is exempt from the application of Section 403.095,
Government Code.

Sec. 228.207. COUNTY AND VOTER APPROVAL. [(g) ] The
commission may only convert a state highway or a segment of a[the ]
state highway [ system ] under this subchapter [section ] if the
conversion is approved by : (1) the commissioners court of each county within
which the highway or segment is located ; and (2) the qualified voters who vote in an election under Section 228.208 and who reside in the limits of: (A) a county if any part of the highway or segment to be converted is located in an unincorporated area of the county; or (B) a municipality in which the highway or segment to be converted is wholly located .

Sec. 228.208. ELECTION TO APPROVE CONVERSION. (a) If
notified by the department of the proposed conversion of a highway
or segment under this subchapter, and after approval of the
conversion by the appropriate commissioners courts as required by
Section 228.207(1), the commissioners court of each county
described by Section 228.207(2)(A) or the governing body of a
municipality described by Section 228.207(2)(B), as applicable,
shall call an election for the approval or disapproval of the
conversion. (b) If a county or municipality orders an election, the
county or municipality shall publish notice of the election in a
newspaper of general circulation published in the county or
municipality at least once each week for three consecutive weeks,
with the first publication occurring at least 21 days before the
date of the election. (c) An order or resolution ordering an election and the
election notice required by Subsection (b) must show, in addition
to the requirements of the Election Code, the location of each
polling place and the hours that the polls will be open. (d) The proposition submitted in the election must distinctly state the highway or segment proposed to be converted
and the limits of that highway or segment. (e) At an election ordered under this section, the ballots shall be printed to permit voting for or against the proposition:
“The conversion of (highway) from (beginning location) to (ending
location) to a toll project.” (f) A proposed conversion is approved only if it is approved
by a majority of the votes cast. (g) A notice of the election and a certified copy of the
order canvassing the election results shall be sent to the
commission.


© 2010 TURF: texasturf.org

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE

"TxDOT admits Trans Texas Corridor still alive & well."

Public hearing turned lobbyist feeding frenzy



2/2/10

By Terri Hall
San Antonio Express-News/Houston Examiner
Copyright 2010

We've seen it before. But in an election year during an economic downturn, it's breathtaking -- a room stacked with lobbyists and elected officials lobbying for higher taxes. Yesterday's Joint Public Hearing of both the House and Senate Transportation Committees (more news coverage below) to discuss the state of transportation finance was what San Antonio Rep. Ruth McClendon defined as insanity, doing the same thing over and over and expecting a different result. McClendon feels that unless the political aspect of why road funding has not been properly addressed, all the public hearings and testimony won't change the outcome.

Ultimately, Governor Rick Perry has repeatedly threatened a veto of any increase in transportation funding other than his policy of privatized toll roads, and he's managed to successfully starve or squander existing funding enough to accomplish his goal. Perry, David Dewhurst, Tom Craddick and Steve Ogden's desire to raid teacher retirement and public employee pension funds to finance these risky toll road deals fell flat in the Legislature, a sentiment echoed in yesterday's hearing.

Once again, lawmakers tried to make the case that TxDOT is plum out of money and that higher taxes are needed to build more roads, while conservative legislator Rep. Linda Harper-Brown and a handful of conservative watchdog groups pushed back saying there's already tax collected that's not getting to transportation, which needs to be fixed first.

Business interests like the Texas Association of Business and virtually all the urban Chamber of Commerce groups shamelessly advocated private toll roads, and every tax imaginable to go to roads. San Antonio Greater Chamber of Commerce President Richard Perez even asked for a "arterial collection" tax, which is code for tolling surface streets, not just highways. These hogs at the trough want no tax left "un-levied" to exploit the powers of government taxation and forcibly empty our pockets to fill theirs. They want it all -- from a hike in vehicle registration fees and vehicle sales tax to property tax, sales tax, and basically taxes on anything that moves.

Lawmakers again had a hard time discerning the true funding "needs" due to TxDOT persistently including projects not on the state highway system in its "funding gap" figures that started at $86 billion in 2006 (then was revised downward by $30 BILLION after the State Auditor found TxDOT had bloated that figure) and is now up to $387 billion.

TURF also obtained sworn testimony from a former employee of the State Auditor that Perry's Transportation Commission directed the agency to gin-up its 2006 funding gap so that it appeared insurmountable under the gas tax system (so it could push private toll roads as the solution to funding shortfalls). Distrust of TxDOT is the elephant in the room few lawmakers seemed prepared to address.

Americans for Prosperity and Texans Uniting for Reform and Freedom, two of only three watchdog groups to testify (Eagle Forum didn't show and Texas Public Policy Foundation was invited but declined) compared with 31 invited witnesses in favor of higher taxes without accountability, emphasized prioritizing existing funding first, like ending diversions of gas taxes revenues away from transportation, and cleaning up a broken TxDOT that continues to illegally use taxpayers money on lobbying for more privatized toll roads.

Defending the indefensible

Though the Texas Conservative Coalition echoed many of the same sentiments, its Director, John Colyandro, was taken to task by Chairman Senator John Carona for advocating the most expensive road tax while rejecting a more affordable gas tax increase. "How is that conservative?" asked Carona.

While Colyandro stopped short of endorsing Rick Perry's position of having all new capacity being toll lanes handed over to foreign corporations that charge 75 cents PER MILE to use public roads, he did advocate that private toll roads have a legitimate role as part of a mix of both toll and non-toll roads.

Earlier in the hearing, Carona laid down the gauntlet asking, "I'm looking for someone to come and defend to me that a privately built toll road is less expensive than a free road 'cause it just ain't so."

While Colyandro and many of the lobbyists and local politicians asked for the moratorium on private toll roads be lifted and remain "one of the tools in the tool box," none could defend how that funding "option" was more affordable than a gas tax increase. Because it isn't. It's rather telling when even a so-called anti-tax advocate lobbies for the most expensive road funding option, but outright rejects the most affordable one.

TxDOT admits Trans Texas Corridor still alive & well

Considering all the campaign rhetoric from Perry claiming the Trans Texas Corridor (TTC) is "dead," his highway department laid it to rest when it admitted on the record that it's still alive and well in the transportation code. The Department still has the legal authority to move forward with it should Perry be re-elected. So once again, all the claims that the TTC is dead, are just plain inaccurate. In fact, one of Perry's appointees to the Transportation Commission, Ned Holmes, asked at a Commission hearing last fall that the TTC-69 private toll contract be expedited. Two other pending TTC corridors, La Entrada de Pacifico and Ports to Plains are also actively being pursued.

Private toll roads cost more than public
As part of the discussion on private versus public toll roads, several lawmakers queried TxDOT staff and Commission Chairwoman as to why public agencies can't go to the bond market and fund these toll roads the same as a private operator can and even more cheaply since they can access tax-exempt bonds and don't need to make a profit. The answer is it can stay in the public's hands more affordably.

Though Transportation Commission Chairwoman Deirdre Delisi tried to say the private operators can tap money the taxpayers can't, it's totally false. In fact, it's the other way around. The private sector is exploiting the tax-exempt capital backed by taxpayers (like federally backed TIFIA loans and Private Activity Bonds, PABs, as well as other sources of taxpayer revenue like gas taxes to subsidize toll projects) in addition to its access to the private bond market, which charges higher interest rates resulting in higher toll rates.

If a potential road is toll viable, the public toll entity can go to Wall Street and get private investors to fund the project using toll revenue bonds based on traffic forecasts. The private investors, not the taxpayer, are on the hook if the traffic fails to show-up to cover the debt. No public money has to be tapped when building a toll viable road.

Delisi seemed clueless as to what a toll viable road even was or how one is funded, looking to TxDOT staff to bailout her out of answering the question. That's because TxDOT hasn't built any toll viable roads since she became Chair. Delisi also claimed there were no guarantees (where the taxpayers bailout the private entities) that the private operators would make a profit, yet an article in today's Bond Buyer confirms there are.

Financial death spiral
Under Perry, rather than scrap toll projects that won't pay for themselves, he's buried the taxpayers in massive amounts of new debt to SUBSIDIZE losing toll projects, socializing the losses and privatizing the profits. Pre-Perry, there was ZERO debt for roads. On Perry's watch, $12 billion in debt has been amassed, not counting the off-budget debt local toll entities have had to incur to pick-up the slack for the State's failure to properly fund STATE highways (and millions the Governor's office has spent on roads for Colonias).

Much of this money has been leveraged multiple times (using borrowed money as collateral to borrow more money, and often several times over), the same reckless financial methods that got us into the mortgage crisis and bailout era. If we continue down this road, debt service payments will likely eat-up our existing gas taxes at a faster pace than inflation, fuel efficiency, and diversions COMBINED!

Though there's some room to borrow more money for roads, the Texas Bond Review Board Executive Director warned, there's not much available. Many of the State's bond ratings have already dropped from AAA to AA+. Perry has basically maxed out the State's credit card in just 5 years!

Carona closed the hearing saying the committees planned to reach out to taxpayer groups next time around to try and reach consensus so that road funding issues get solved and not stonewalled for another session. From our perspective, more funding is a non-starter until they end gas tax diversions and audit and clean house at TxDOT, holding them accountable for the years of wrongdoing.

Be sure to read TURF's oral testimony and written testimony.

© 2010 TURF: texasturf.org

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE

Perry's appointed Texas Transportation Commission plans bypass around the Legislature's private toll road moratorium.

Texas Officials Seek a New Path To Private Transportation Funding

2/2/10

By Richard Williamson
The Bond Buyer
Copyright 2010

DALLAS — With a statewide moratorium on new private toll projects still in place after more than two years, the Texas Transportation Commission is planning a bypass around that financial barrier to leverage existing funds.

While the financial constraints exist statewide, the Dallas-Fort Worth Metroplex serves as the incubator in terms of innovative public-private finance, say Texas ­Department of Transportation officials.

“This is, in my view, the premier national laboratory for transportation projects,” said TxDOT spokesman Chris Lippincott. “There’s a lot of interesting stuff going on.”

The latest scheme — one that will require rule changes and exhaustive risk analysis from department staff — would allow a private developer to design, finance and rebuild a 28-mile section of Interstate 35-East from Dallas northward to Denton in exchange for reimbursement from TxDOT.

The finance method, known as pass-through tolling, is relatively new but well established with local governments, particularly counties. The system has never been used with a private developer, according to TxDOT. Nevertheless, current law allows the use of pass-through tolling by private companies.

Under the system, a local government or private developer fronts the money to build a project. The department then pays the developer either a set amount based on the “availability” of the road when it opens or on a per-car toll basis, regardless of whether the highway is tolled.

The developer is guaranteed a set reimbursement, creating an element of risk for TxDOT if use of a tollway falls below projections.

To qualify for the funding, projects must be on the state highway system. In 2009, the Texas Transportation Commission, which oversees TxDOT, approved 21 pass-through projects worth about $522 million.

In December, the TTC told its staff to begin studying how the mechanism could be used with a private developer on the Dallas-Denton portion of I-35.

As laid out in a planning session last week, commissioners would like to decide on a structure for the financing of the $4.3 billion I-35E project by this summer with requests for proposals likely in the fall.

The I-35E widening from the current six lanes to 12, including four high-speed tolled lanes, is one of several major projects in the Dallas-Fort Worth area involving private finance. Meanwhile, south of Dallas and Fort Worth, TxDOT is preparing to widen Interstate 35 using traditional state bond finance.

Also underway is redevelopment of Interstate 635, the Lyndon B. Johnson Freeway that loops Dallas. That project, which will also include managed toll lanes, is under the direction of Spanish developer Cintra, Concessiones Infraestructuras de Transporte.

Cintra and TxDOT are aiming for an April close on $2.7 billion of financing. Completion of the project is expected to cost more than $4 billion.

Cintra’s finance partners include ­Meridium Infrastructure Finance and the Dallas Police and Fire Pension System, which will stake $600 million. They will borrow about $500 million from private lenders and seek an equal amount in government-backed loans from the Federal Highway Administration.

Cintra will maintain and operate the road until 2062, with the public North Texas Tollway Authority collecting tolls. Cintra is also the lead partner on a similar $2 billion project called the North Tarrant Express in Tarrant County, which includes Fort Worth.

Construction is expected to begin near the end of the year and includes 13 miles of widening existing highways from four to six main lanes with four managed toll lanes. The public-private partnership provides two-thirds private funds with one-third public funds to complete the project in five years.

Cintra is allowed to work on those projects because they were already in the planning stages when the Texas Legislature imposed a moratorium on privately owned and operated toll roads in 2007.

In Texas, financings through developers, public or private, are known as comprehensive development agreements, or CDAs. The agreements require the developer to pay an up-front payment for the right to build a tollway and take reimbursement from toll revenue, in some cases for 50 years or more.

When Texas lawmakers imposed the moratorium on private CDAs in 2007, they also wrote a new law that gives public tollway authorities such as the North Texas Tollway Authority right of first refusal on future agreements. In the process, state and local officials stripped Cintra of a $3.5 billion CDA known as the State Highway 121 project and awarded it to the NTTA.

Now, the toll authority and the TTC are seeking a way to allow the NTTA to finance two more projects: State Highway 161 in western Dallas County and the Southwest Parkway/Chisholm Trail in Tarrant County.

With its debt capacity strained by the SH 121 project, the NTTA has said it cannot afford to finance the two new projects without loan guarantees from TxDOT.

For the first time, the department is considering guaranteeing loans up to $8.4 billion to allow the authority to finance the project. The NTTA would, for the first time, issue bonds for the new projects without backing the debt with revenue from its entire tollway system.

While TTC commissioners said last week that they saw little chance that TxDOT would ever be liable for the entire $8.2 billion for the two projects, they expressed concern about how the guarantees might affect the triple-A rating on the department’s senior-lien general obligation debt, known as Proposition 14 bonds.

“We’re working at setting precedents here,” said commissioner Ned Holmes. “I’d like us to set precedents we can live with.”

Holmes asked TxDOT chief financial officer James Bass where the money would come from if the state agency had to lend money to the NTTA for debt service on the tollways.

“To make the cash available in the time they needed it, it would be anything and everything necessary,” Bass replied. “It might be from internal costs and a hiring freeze.”

With the discussion focused on risk management and stressing the credit ratings of the NTTA and the TTC, commissioner Ted Houghton pointed out that the issue wouldn’t exist if TxDOT had the authority to build the projects through private developers who would bear most of the financial risk.

“That pink elephant in the room that no one wants to talk about is that we don’t have CDA authority,” he said. “If we had CDA authority, this would be a moot point. If we had it, it would be a different day, but we don’t.”

© 2010 The Bond Buyer: www.bondbuyer.com

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE

"Both Perry and (Lt. Gov. David) Dewhurst have seceded from reality and they're doing nothing to fix the problem."

Money for roads sought

State could look at fuel tax hike

2/2/10

By Gustavo Reveles Acosta
El Paso Times
Copyright 2010

EL PASO -- State legislators on Monday began what will be a long and difficult process to create new revenue streams for highway construction in Texas.

Money to relieve the congested freeways in the state has dried up and lawmakers have been left with the task of coming up with billions of dollars to relieve traffic tie-ups.

The members of the Texas House and Senate transportation committee had a joint meeting in Austin to discuss how the state will come up with additional revenue to help build new roads starting in 2012.

Both committees heard from mayors -- including El Paso Mayor John Cook -- transportation officials, lobbyists and business leaders during a meeting that began at 7 a.m. El Paso time and lasted until well past 4 p.m.

Although no official plan was discussed, most of the conversation revolved around a proposed hike in the state's fuel tax, which has been stagnant at 20 cents per gallon since 1991.

"Yes, that's on everyone's mind, but the reality is that it won't be easy to sell a gas tax increase to the public," said state Rep. Joe Pickett, D-El Paso, the chairman of the House's transportation committee. "Just think about the sound bite on television. As soon as you hear increase, your mind is going to be turned off by it."

Pickett's committee, along with its counterpart in the Senate, began pitching a hike -- or at least a retooling -- of the fuel tax since last fall.

According to figures from the Texas Department of Transportation, thestate could be $250 billion behind in highway construction by 2050, when the population of the state will reach 50 million.

"By January 2012, TxDOT will be dead-flat broke and without new revenues to build new roads. That's a big issue," said state Sen. Eliot Shapleigh, D-El Paso, a member of the Senate's transportation committee.

Shapleigh said the state should not only increase the fuel tax but also alter it to make sure fuel-efficient vehicles pay their fair share in taxes for new highways.

Gov. Rick Perry, though, has said he will veto any bill that asks for an increase in fuel tax.

"Both Perry and (Lt. Gov. David) Dewhurst have seceded from reality and they're doing nothing to fix the problem," Shapleigh said.

Members of both committees conceded Monday that fixing TxDOT's budget shortfall would require innovative legislation and changes to long-standing fee structures.

Some of the proposed changes include increasing vehicle registration fees, pushing cities and counties to use the Transportation Increment Refinancing Zone funding mechanism, and forcing TxDOT to become more efficient.

Officials also discussed creating a local option that would allow municipalities and counties to create local fuel taxes to help build local roads.

Legislators said the state needs to be more in tune with the U.S. Department of Transportation to secure as much federal funding as possible.

"Whatever happens, I hope all these tools that have been discussed are kept on the toolshed for us to use," said Cook. "El Paso has taken advantage of many of these tools and we are doing well because of it."

Many El Paso commuters, though, said they wouldn't like to see an increase in fuel taxes, especially because gas prices have skyrocketed in the last five years.

"Look at me. I'm almost paying $3 a gallon here. And now they want me to pay more? That's awful," said Susan Robert, who was fueling her car at a Central convenience store on Monday. "I think we have enough roads for right now. Don't raise my taxes."

Pickett said he is concerned that the recent boom in highway construction -- about $1 billion worth has been approved -- in El Paso could make people think TxDOT is in good shape and that a fuel tax increase is not needed.

"El Paso is in good shape for the next four or five years, and I say that with hesitation because I know that we have done things right here and things have played in our favor," he said. "But we are talking about the future and our list of projects is long."

Pickett added, "Finding a solution to the transportation funding problem is going to be one of the most difficult things to get through the Legislature in the next session ... but I guess I already knew that."

Gustavo Reveles Acosta may be reached at greveles@elpasotimes.com; 546-6133.

© 2010 El Paso Times: www.elpasotimes.com

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE

“What we observe is a push for a gas tax increase in order to have more money to borrow against for yet more toll roads.”

Legislators debate road funding

2/1/10

By Josh Baugh
San Antonio-Express-News
Copyright 2010

AUSTIN — Texas lawmakers on Monday hammered home that without a new funding method, the Texas Department of Transportation will be unable to build any new roads beyond 2012 and will not have enough money to properly maintain existing roads within two to three years.

They also demonstrated that finding a new funding solution they can agree on won't be easy.

Legislators on the Senate Committee on Transportation and Homeland Security and the House Committee on Transportation grappled with the use of “public-private partnerships” and comprehensive development agreements, or CDAs, that in some cases privatize toll roads.

Senate chairman John Carona, R-Dallas, chastised language often associated with toll roads — that drivers can “choose” to use them. Carona said it's “disingenuous” to say drivers will have an option if the only way to fund new road construction is by tolling them.

“If every new road going forward is a toll road, that's no choice,” he said.

Looking into other potential sources of dollars, Sen. Eliot Shapleigh, D-El Paso, asked Texas Transportation Commission Chairwoman Deirdre Delisi whether her board, appointed by Gov. Rick Perry to oversee TxDOT, supported an increase in the gas tax — something Perry has said he opposes. Delisi said it's not the commission's role to determine how much the gas tax should be increased — that's the legislature's job.

Increasing the gas tax has been a political hot potato, but it's an issue that's gaining traction among lawmakers. It's unclear, however, what chance it will stand during the 2011 legislative session.

What is clear is that lawmakers say they know something must be done to address the funding shortfalls. Based on anticipated, long-range price hikes, the purchasing power of the state motor fuels tax — 20 cents per gallon — is declining, Delisi said. TxDOT needs a stable source of funding, she said, though it's not the transportation commission's role to say where the money should come from.

Local leaders, including Bexar County Judge Nelson Wolff, implored the committees to consider increasing and indexing the state gas tax. The last time legislators increased it was in 1991.

Wolff also asked lawmakers to give local governments the authority to ask their residents to approve an option tax to fund local transportation projects. A local-option measure failed in the 2009 legislative session.

Lawmakers also discussed other measures to boost transportation funding, including ending diversions from the gas tax and increasing vehicle registration fees. Under that scenario, House committee Chairman Joe Pickett, D-El Paso, said TxDOT would increase the number of projects it would do, helping to address the state's substantial infrastructure needs.

Texas is in the midst of spending $4 billion on road projects — including $2 billion from federal stimulus dollars — but Delisi said the state's highest priority needs aren't all being addressed because projects needed to be “shovel-ready.” Only a reliable source of revenue would allow for those highest priority projects to be built, she said.

Terri Hall — founder of the grassroots, anti-toll Texans Uniting for Reform and Freedom — told the committees that her organization supports a statewide gas tax increase, but with certain expectations.

“What we the taxpayers cannot allow is a gas tax hike, in addition to the continuation of toll proliferation,” she said. “What we observe is a push for a gas tax increase in order to have more money to borrow against for yet more toll roads.”

© 2010 San Antonio Express-News: www.mysanantonio.com

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE

"We’re supporting her because property rights are important to us.”

Hutchison blasts Perry at farm bureau conference

2/1/10

By Patrick George
Austin American-Statesman
Copyright 2010

Gov. Rick Perry’s ill-fated Trans-Texas Corridor was an attempt to “run over” private property rights, Sen. Kay Bailey Hutchison told a crowd of about 500 farmers and ranchers in San Marcos today.

Speaking at the Texas Farm Bureau’s annual leadership conference in San Marcos today, Hutchison blasted Perry’s policies on education, term limits, his use of vetoes in the State Legislature, and the corridor — the latter of which struck a chord with many in the audience.

“It was a mistake to propose taking nearly 600,000 acres of our land,” she said. “It was a mistake to try and run over our private property rights. It was a mistake to waste $131 million in taxpayer money on roads that were never built.”

Many in the audience stood and cheered for Hutchison, whom the farm bureau endorsed last fall. President Kenneth Dierschke said the decision by the bureau’s governing board was unanimous, and had to do with both property rights and what they considered a lack of access to Perry.

“It was a grandiose plan,” Dierschke said of the corridor. “You’re going through farms that have been in our members’ hands for over 100 years.”

Dierschke said San Marcos was chosen for their annual conference due to the amenities at the multimillion-dollar conference center and nearby outlet mall shopping for members’ families.

Hutchison also reiterated her desire to have a session after the traditional legislative session where lawmakers can convene to try and override the governor’s vetoes. She also said her first act would be to try and limit the governor to two terms in office.

“I like her thoughts on term limits,” said Paul Minzenmayer of Runnels County. “As a whole, we’re supporting her because property rights are important to us.”

Hutchison then left to meet with supporters in New Braunfels.

© 2010 Austin American-Statesman: www.statesman.com

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE

"Undaunted by failure."

North Texans revive push for local-option transportation funding bill

2/1/10

By DAVE MONTGOMERY
Fort Worth Star-Telegram
Copyright 2010


AUSTIN -- Undaunted by failure in the last two legislative sessions, North Texas leaders are organizing another push behind a local-option transportation bill that would authorize local elections to finance millions of dollars in road and rail projects.

Officials from Fort Worth, Dallas and Arlington signaled their intentions at a joint hearing before the state House and Senate transportation committees Monday, saying that congestion and pollution have only worsened since a similar bill died in the closing days of the 2009 Legislature.

"We in North Texas are facing nothing less than a mobility crisis," said Fort Worth Mayor Mike Moncrief. "North Texas needs your help. The people of Fort Worth need your help."

The legislative initiative being prepared for the 2011 Legislature would allow county or regional elections in which voters would choose from a menu of funding options, such as an increase in gasoline taxes or auto registration fees, Fort Worth Councilman Jungus Jordan said in outlining the plan after the hearing.

Jordan said proponents are tailoring the local-option feature for use in any region and plan to mount a statewide push on behalf of the bill.

In another key difference from the previous campaign, Jordan said, proponent cities will rely on help from business groups instead of tax-financed city funds to pay for lobbying efforts for the bill.

The measure is similar in concept to the 2009 bill, which Gov. Rick Perry and vocal conservative groups denounced as a tax increase. But Jordan said supporters will stress that urban residents are already paying millions of dollars in "hidden taxes," such as lost productivity and increased business costs, because of traffic congestion.

Arlington Mayor Robert Cluck, a physician, told lawmakers that proponents will also cite the public-health benefits of reducing traffic. He pointed out that pollution in the Metroplex carries the same consequences as smoking and exacerbates pulmonary illnesses.

"As we get more and more cars off the street, the amount of asthma that we see will go down dramatically," he said.

More than two dozen suburban communities joined with Dallas, Fort Worth and Arlington in the unsuccessful effort to pass the 2009 measure, called the Texas Local Option Transportation Act. The larger municipalities also hired one of Austin's premier lobbying firms, HillCo Partners, to help push the bill.

"We didn't stop after the last session," Jordan said.

Planners are still working out details but hope to have a draft within 30 to 60 days. North Texas leaders will also hold discussions with their counterparts in San Antonio, Houston, Austin, Lubbock, Corpus Christi, El Paso and smaller urban areas to form a statewide coalition, Jordan said.

Metroplex leaders, he said, still have the same priorities as in 2009: finding money for up to 250 miles of commuter rail and expansion of the now overburdened road and highway network.

"The unparalleled quality of life that we've built is severely threatened by our congested highways and roadways," Moncrief told the lawmakers, saying that "many if not most" of North Texas residents are "fed up" with being stuck in traffic.

"They deserve answers," he said. "Not next month. Not next year. Now."

The daylong hearing by the House Transportation Committee and the Senate Committee on Transportation and Homeland Security was called to explore funding options to help the state avert a looming transportation crisis.

Some lawmakers are touting an increase in the gasoline tax, which hasn't been changed since 1991.

Deirdre Delisi, chairwoman of the Texas Transportation Commission, declined to take a position on the proposal but said the state needs financial stability to address "serious transportation challenges" over the next two decades.

The state will run out of money for new transportation projects by 2012. A panel of Texas business and civic leaders appointed by the commission says the state needs to invest at least $315 billion through 2030 to maintain roadways, combat urban traffic congestion, and increase mobility and safety.


© 2010 Fort Worth Star-Telegram: www.star-telegram.com

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE

"Perry endorsed the status quo at the Texas Department of Transportation."

Opinion

Candidates consolidate position in second debate

1/31/10

William Lutz
The Lone Star Report
Copyright 2010

Most Texas newspapers and journalistic commentators argue that Gov. Rick Perry "won" the Belo debate -- the second and final debate of the 2010 Republican primary election for governor. Having watched the debate, I'm not so sure. I'd score the debate itself a draw, but one could make that case.

Since Perry is in the lead in most third-party polls, all he had to do is avoid a major gaffe or screw-up and he can consolidate his position. For the most part, Perry did that.
Here are my thoughts about each candidate's performance:

Perry -- He got high marks from the press corps for his demeanor. Yes, he gets high marks for his delivery, but the substance of his answers could cause problems with Republican primary voters -- if he opponents understood how to exploit them.

Basically, Perry endorsed the status quo at the Texas Department of Transportation (though I don't the Legislature is comfortable with that). He did publicly state what's been known privately for some time -- that he's opposed to raising the gas tax (and that may help him with some GOP primary voters, until they see the alternative).

If groundwork had been laid months ago, the Enterprise Fund could have been used to blunt Perry's "bailout" attack on U.S. Sen. Kay Bailey Hutchison, but coming this late in the game it's probably too little too late.

Also, Perry screwed up by endorsing in-state tuition for illegal immigrants, but given the current economy, that probably isn't big enough to hurt him, and Hutchison has not used it against him.

In short, all Perry needed to do was survive without any major blunders. He did so.

Hutchison -- The substance of her answers made sense, but the press corps has spent most of the last two days slamming her delivery. And much of it may be too late.

First, I give Hutchison credit for being much more straightforward on the abortion question than she was in the first debate. After being shown the video from the first debate, she gave a direct answer on what her position is on the issue -- a marked contrast to the prior debate. But anytime she has to talk about abortion, it may hurt her with GOP primary voters.

I think she scored points on the Texas Enterprise Fund issue. The rewriting of contracts and jobs goals is not politically helpful to Perry.

That said, there was one giant hole in Hutchison's presentation -- she has yet to lay out a solid alternative to the governor's plan on transportation. I think things would change at TxDOT if we had a new governor, but how? She hasn't ruled out toll roads or comprehensive development agreements. What would change in a Hutchison governorship.

Perry's comment at TxDOT gets audited regularly by the Legislature is substantially true. (Just go onto the state auditor's website and look at the number of audits conducted on that agency.) An audit of TxDOT isn't change, it's status quo.

What Perry has that Hutchison needs is a coherent theme for his campaign. Perry's theme is: Texas works. Washington doesn't. Hutchison needed to develop an over-arching theme for her candidacy last year, and she didn't have one at this debate.

Medina: At the first debate, Debra Medina established herself as a serious candidate. The press corps had low expectations and she wildly exceeded them.

At the second debate, the press corps had very high expectations, and she probably didn't live up to them. Medina's campaign issues were the usual themes she's stressed throughout the campaign. She did a credible job of discussing them at this debate.

The one item that hurt her is property taxes. By punting the exact structure of how to replace a property tax with a sales tax, it created a question in the voters' minds as to whether this idea is workable.

That said, I think the first debate put Debra Medina on the map, and while the second debate probably didn't move her forward, she didn't move that far back either.

That's my take on the debate. Feel free to give your opinions in the comment section.

© 2010 The Lone Star Report: www.lonestarreport.org

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE