"Perry's chief transportation aide promised a hard push to restore the authority to enter into so-called comprehensive development agreements in 2011"
By MICHAEL A. LINDENBERGER
Dallas Morning News
AUSTIN – It's been easy to overlook in the Dallas area, where two of the largest privately financed toll projects in the country are under way, but Texas' authority to build private toll roads technically has been extinct since summer 2009.
Over a long July Fourth weekend two years ago, with time running out on a chaotic special session, the Legislature refused to extend authority for the Texas Department of Transportation to contract with private toll firms beyond Aug. 31, 2009.
Since then, the privatization of toll roads, long a centerpiece of Gov. Rick Perry's ambitious and controversial transportation agenda, has been on hold in Texas, even as some grandfathered projects like Dallas' LBJ Freeway and the North Tarrant Express continued.
Now the issue is set to be debated again as lawmakers return to Austin, ready to confront rising construction needs even as they grapple with commitments to keep taxes low and a frigteningly large budget shortfall.
Immediately after the last session adjourned, Perry's chief transportation aide promised a hard push to restore the authority to enter into so-called comprehensive development agreements in 2011.
"Absolutely, the governor is going to keep pushing, pushing for putting this tool back in the box," then-deputy chief of staff Kris Heckmann said.
And in an interview with The Dallas Morning News just before his re-election in November, Perry said he would ask lawmakers to renew authority for the state to partner with private toll firms.
"Now is not the time to leave any tool out of the box," he said, noting the revenue shortfall that the Legislature will confront and the state's growing list of unfunded highway needs.
Running out of money
Texas Transportation Commission chairwoman Deirdre Delisi has warned repeatedly that without new revenue, Texas will run out of money for new highway projects by 2012.
North Texas elected officials will be pushing, too. They say they have already begun to drastically scale back the scope of transportation projects planned before 2035 and will need all the money they can get – whether from public or private sources.
Toward that end, the Regional Transportation Council's legislative agenda will include efforts to restore the authority to enter into comprehensive development agreements in the state, spokeswoman Amanda Wilson said.
But Michael Morris, the council's planning chief, said this push for private toll road authority will look different than the expansive authority previous bills have given the Transportation Department, which is run by five commissioners appointed by Perry.
North Texas leaders will be asking lawmakers to approve a narrow bill that gives the state authority to contract with private developers for a handful of roads only, Morris said.
"Instead of making this a big major policy issue statewide, our position is, why not focus strategically on specific projects that could be advanced" by privatization, he said. "In our region, we won't have more than three. And we're calling for safeguards, too."
Those safeguards would include the need for any private toll road to have the support of not just state officials but also county officials and the local planning council.
"That way, we do this more strategically and give ourselves time to learn more about the risks and benefits" of the agreements, Morris said.
The three North Texas projects Morris and other local officials hope can be built with private funds are:
•The expansion of Interstate 35E between LBJ Freeway and Denton County.
•An eastern expansion of the already-underway North Tarrant Express, and a portion of Interstate 35W to its north
•Widening and the addition of toll lanes on State Highway 183 in Dallas County, which would provide a Dallas County link to the North Tarrant Express
Each of those roads, like the reconstruction of LBJ Freeway, would involve heavy subsidies from taxpayers and, as a result, provide new free lanes as well as high-priced toll lanes that serve as optional express routes.
State transportation officials have already said the I-35E project alone will cost nearly $5 billion, almost 10 times what they say Texas has available to spend on it without private partners.
The privatization push will likely have allies in the state Senate, where leaders vowed to support renewing the authority for private toll roads in 2011 even as the time ran out of the 2009 session.
Lt. Gov. David Dewhurst and others at the time called the lack of action to extend the authority in 2009 nothing more than a temporary timeout.
Everyone not on board
Still, not everyone in Texas believes toll roads are a good idea, public or private, said state Rep. Joe Pickett, the El Paso Democrat who is the House transportation committee chairman. Toll roads have been too eagerly embraced by officials and planners in North Texas, he said.
"There isn't the appetite for toll roads in El Paso," he said. "And San Antonio is the second biggest city in Texas, and they still don't have a toll road there."
What's more, Pickett said the huge influx of new members in the House has made predictions of any kind foolhardy. Republicans now control at least 101 of the 150 seats, and it's not yet clear who will be speaker or will lead committees in the new session, he said.
Pickett said he believes House Speaker Joe Straus of San Antonio has the votes to remain in charge, but he said it's not certain.
Still, Pickett said with other sources of funding so scarce, it's likely he will support legislation that allows the state to pursue private investors for specific projects, including several in North Texas.
"It should be a project-specific bill," he said. "It should include an affirmative list of those who wanted in and wanted out."
Pickett said he'd favor a bill that would give the Transportation Department four years to find private developers for a list of badly needed toll roads, after which the authority for private tolls in Texas would expire.
But another area of uncertainty is just how eager the private investors that were so readily available for toll projects a few years ago will be to return to Texas.
With so many changes in the economy, with ratings agencies, and credit markets, the interest may be less than what it was two years ago, some experts say.
Former U.S. Transportation Secretary James Burnley said in a recent interview that private investors may be more cautious than they were when Perry first pushed Texas to privatize toll roads.
"There will be a lot more interest in attracting private capital than there has been with Democrats in power in Congress," said Burnley, who served in the 1980s.
"But from the private sector's point of view, there are a great many issues that have to be worked through. You can't just blithely wave a magic wand and expect the investment capital to flow."
TRANSPORTATION DEPARTMENT GEARS UP FOR LEGISLATURE
With a new legislative session looming, the Texas Department of Transportation is taking steps this week to bolster its efforts at the Capitol:
•It is hosting an annual transportation policy forum in Austin and has invited Pennsylvania Gov. Ed Rendell to deliver a keynote speech today.
•Rendell, a Democrat, is expected to talk about the need for more highway funding and likely will tout his support for privatization of some toll roads.
•The department's five commissioners will meet in a special session Wednesday to hear proposals on reorganizing the 12,000-employee agency – a move designed in part to get ahead of legislative critics.
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