Saturday, January 08, 2011

"This is crazy and reeks of abusive misuse of a public agency."

Legislature may look at cap on toll penalties


By Dave Lieber
Fort Worth Star-Telegram
Copyright 2011


The 2011 Texas Legislature, opening this week, offers lawmakers the chance to provide more oversight of how the North Texas Tollway Authority collects fines and fees on unpaid toll bills.

State Sen. Jane Nelson, R-Flower Mound, is preparing a bill that would lower the fees and penalties charged to motorists on top of their tolls.

Motorists complain that a 45-cent toll bill can end up costing hundreds of dollars by the time NTTA is done billing those who haven't paid.

For the past year, The Watchdog asked readers who complained about the NTTA's practices to send Nelson their complaints in writing to help lawmakers understand the problem. Nelson's staff said last week that her office has received 140 written complaints. She is still collecting them.

Nelson tells The Watchdog: "I am working on legislation to lower the cap on administrative fees that the NTTA can charge, and to have those capped fees apply to the entire invoice regardless of how many separate violations are on that invoice.

"My goal is to stop these fees from adding up to unreasonable amounts for vehicle owners, while allowing the tollway agency to reasonably cover their expenses."

Whatever happens, the tollway authority won't make it easy. Nelson said a year ago that when she questioned the NTTA, "they've been very defensive."

Criticism comes from the inside, too. Current NTTA Chairman Victor Vandergriff of Arlington complained in a public meeting a year ago that the authority's budget may depend too much on penalty fees.

The payment system confuses many drivers. No signs on the toll roads explain the process. The NTTA no longer uses tollbooths. Drivers who keep a TollTag on their windshield must remember to keep enough cash in their accounts.

For vehicles lacking tags, license plates are photographed and bills are mailed after the fifth transaction. Car owners billed by mail are charged 50 percent more than what TollTag users pay.

Motorists are supposed to keep their addresses up to date with the state so the bills arrive properly. Sometimes, though, car owners say they never received initial bills but learned later that they owe hundreds of dollars.

The NTTA says that it mails the letters and that if they don't come back, it considers them delivered.

In October, I reported how a woman went to jail for 27 hours for failing to appear in court for an unpaid toll bill that she estimates was for $11.

She said she never received the bill.

I won't defend scofflaws who don't pay their tolls. As a TollTag account holder, I certainly don't want to cover other people's costs. But I was curious about how much the biggest toll runners owe. A Public Information Act request to the NTTA provided the answer.

The NTTA won't release names, but its records show that the No. 1 scofflaw owes $72,000, followed by four drivers who each owe more than $60,000.

How you can owe that much is beyond me. The NTTA won't say how much is for tolls and how much is for fees and penalties.

For most customers who get into trouble, though, it's small tolls and big add-ons. Two motorists have complained to me that although they tried to pay their bills, the NTTA still sent their accounts to its collection agency.

David Spruiell of Arlington says his toll bill was for $8.56, but "I obviously misread the bill." He mailed a check for $9.56 -- $1 more. The authority sent the check back with an explanation that he had overpaid. He says he tried to call twice but gave up when the lines were tied up. Next he got a notice from a collection agency that he owes $208.

When he called to complain, an NTTA staffer told him that he could negotiate to pay less. "This is a one-time offer," he was told. "I'll take $138 if you pay today."

He didn't take the offer.

"It's not like I didn't try to pay," he says. "A late fee of $10 would be acceptable, but not $200. I don't want to have a warrant issued against me, but this is crazy and reeks of abusive misuse of a public agency."

The NTTA says it is not equipped to handle overpayments on its pay-by-mail system.

Roger Beaman of Mansfield acknowledges that he paid his $10.45 bill three days late. His problem? He forgot to write his car's license plate number or invoice number on the check. He has two cars in his household. When the NTTA received the check, it credited it to the wrong car.

One car had a $10.45 bill, and the other had zero. But the NTTA put the $10.45 into the zero account, giving it a credit, while the other account went delinquent.

When he called to complain, a staffer promised to fix it but never did, he says. He kept trying. One NTTA staffer told him that if he sent $7.95, it would go away. He did as he was told, but that didn't work either. A collection agency seeks $182.

"I can say their check-handling skills with my account would get a failing grade," he says.

NTTA spokeswoman Kimberly Jackson says, "It is important that customers contact us early if they have any questions so we can work with them to resolve the issue quickly and at the lowest cost for the customer."

Jackson says the NTTA plans to make an improvement: "We will be implementing a program in 2011 through a track-and-trace program with the U.S. Postal Service. We soon will be able to track when a letter was delivered."

That will help, but it can't come soon enough. The NTTA builds massive road projects, but it seems to have problems with the mail. When I called last month to order new Velcro strips for my worn TollTag, the NTTA sent me a replacement set.

Three different times.

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Friday, January 07, 2011

"For new construction, TxDOT is spending this year and next a total of $2.71 billion, of which fully $2.01 billion will come from issuing more debt"

House transportation chair: Public education should not be funded through gas tax receipts


Michael Lindenberger/Reporter
Dallas Morning News
Copyright 2011

Is it good policy to give public education one-fourth of every penny collected by the state motor fuels tax?

Every gallon of gasoline sold in Texas carries a 20-cent state tax, but the Texas Constitution permits only 15 cents of that money to go to transportation, reserving a nickel per gallon off the top for public education.

pickett2.jpegThat's too much, and Texas' underfunded highways need that money too bad to let it be sent to pay for our schools, said Rep. Joe Pickett, D-El Paso, the House transportation chairman. (Photo: Joe Pickett.)

Speaking at a gathering of transportation advocates, engineers, state wokers and others Wednesday, Pickett said public education is already funded by roughly $50 billion a year -- once local, state and federal funds are included.

"I think our schools could survive without it," he said, emphasizing the small role the gas tax funds play in the overall education budget. He stopped short of saying he would actually push for such a change this session, a nod to the political odds against it.

How much are we talking? According to the FHWA, the motor fuels tax generated about $3 billion for the state of Texas in 2009. If a quarter of that went straight to education, that's $750 million.(Here's the FWHA chart.

That would be serious money for transportation, though probably not enough to solve all of its funding problems. For one thing, of the approximately $2.25 billion in gas tax receipts left over for transportation, about $600 to $750 million per year are siphoned off for uses only tangentially related to our highways, including the Department of Transportation, which gets about $1.2 billion of its funding every two years from the gas tax.

Ending those diversions has proved very difficult, despite near unanimous agreement in the Capitol that DPS should not be funded with gas tax dollars. The problem, as Pickett noted Wedesday, is that everyone agrees the funding should change, but no one believes that DPS should go without. That means finding new money to replace the gas tax dollars, something that enjoys much less widespread support.

Plenty of conservatives would welcome the idea of ending the practice of diverting the nickel to education, just as they argue it shouldn't be used to pay state police. That's a philosophical position that basically argues that gas taxes should be used for things that support the activities that are taxed in the first place. If drivers are taxed for driving, then the money generated should be used to improve roads, for instance. That would make the gas tax more like a true user fee.

But few folks in that camp, and few state leaders, are willing to support new revenue to replace the funds restored to transportation. Without that new revenue, the idea of ending the diversions remains a pipe dream.

Thumbnail image for Thumbnail image for perry.JPG.jpegThat is, unless, you agree with Gov. Rick Perry, who says budgeting is all about making choices. If Transportation needs more money, he said, it should get it -- but only if lawmakers decide to take it from some other purpose that isn't so critical.

But he has typically stopped short in suggesting which areas should be cut, or from saying how much. And it will take that kind of hard-nosed cutting, or a willingness to raise new revenue, to make real any commitment to end the diversions, whether it's the smaller step of keeping the gas tax dollars away from DPS or the giant step of changing the Constitution to cut public education out of its nickel.

As for TxDOT's budget, it's going to need more money soon, or else it's going to have to stop doing a lot of the things that Texans have counted on it to do. That's the inescapable conclusion you reach once you look at its budget.

txdot budget graphic2.jpgPickett showed an interesting breakdown of TxDOT's budget. It's budget for 2010-2011 is about $16 billion, not counting the money it got from NTTA that is restricted for use in North Texas.

Of that total, though, Pickett points out that more than $10 billion is immediately spoken for -- either to make payments on previously issued loans (1.64 billion), to make continuing payments on mutli-year projects that have already begun construction ($3.1 billion), or to pay for maintenance on the sprawling network of aging highways and bridges ($5.65 billion).

That's two-thirds of its two-year budget gone, and not a single penny has been spent on a new highway or bridge. For new construction, TxDOT is spending this year and next a total of $2.71 billion, of which fully $2.01 billion will come from issuing more debt (meaning that the debt service figure quoted above will only rise in future years.) The department is spending just $700 million in cash on new construction.

The rest is tied up in a bundle of uses -- including about $1.6 billion on "project development costs" which presumably are design and right of way acquisition for future projects -- and a host of smaller items, from rail safety programs to rural public transit inititiatives.

So, another $750 million a year from the gas tax would mean a great deal to drivers who are looking for TxDOT to begin building more roads or who worry that it will soon begin robbing maintenance dollars to keep the construction program on life support.

That, of course, was the real point of both Pickett's comments and those made by Sen. Tommy Williams: Sooner or later, both men said, Texans will have to pay more for transportation. The chart below, presented by Pickett, shows how we compare with other states.
gas tax illustration txdot copy.jpg

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Tuesday, January 04, 2011

"The process by which the gas tax is allocated is corrupt and lacks transparency."

Myth Busted: Road Costs Not Covered by Gas Taxes

For the full report click here: Do Roads pay For Themselves?


Texas Public Interest Research Group
Copyright 2010

Austin, TX – A new report released today by the Texas Public Interest Research Group disproves the common misconception that road-building is paid for by user fees, showing that gas taxes cover barely half the costs of building and maintaining roads, a fraction which is likely to fall steadily.

Among the findings of the report:

  • Federal gasoline taxes were originally intended for debt relief, not roads.
  • Highways, roads and streets have received more than $600 billion in subsidies over the last 63 years in excess of the amount raised through gasoline taxes.
  • The amount of money a particular driver pays in gasoline taxes bears little relationship to his or her use of roads funded by gas taxes. Drivers pay gasoline taxes for the miles they drive on local streets and roads, even though those proceeds are typically used to pay for state and federal highways.
  • Most state gas taxes are partly offset by subsidies that exempt gasoline from sales taxes.

"Texas needs to make difficult choices about how to fund our states' troubled transportation system. The first task is to discard common myths about how roads are paid for," said Slatter at TexPIRG.
The transportation finance system in Texas is broken. Officials at the Texas Department of Transportation (TxDOT) have admitted there isn't enough money for basic road repairs. The process by which the gas tax is allocated is corrupt and lacks transparency.
"The state’s gas tax has been placed in a cookie jar and lawmakers help themselves to as many as it takes to pretend they’ve balanced the budget," said Slatter. "The process discourages transparency or accountability."
"This dishonest charade only encourages state officials to seek indirect and short-sighted methods to fund road projects," Slatter continued. "In Texas, that means pushing the same unpopular private toll road agenda the state has been pushing for close to a decade."

While toll roads are the closest thing to a user fee, in Texas, the state has turned to privatizing toll roads in order to fund most major highway projects. Privatization deals are fraught with problems and characterized by the same leveraging of debt, reckless shifting of risk and conflicts of interest that caused the financial meltdown on Wall Street.

"Looking ahead to the 2011 legislative session, Texas lawmakers will be faced with serious challenges to fund smart transportation projects," concluded Slatter. "This report shows that highway spending has been wrongly portrayed as financially conservative. Sound transportation policy requires honest investment in transportation infrastructure that advances long-term needs, rather than continuing on the wrong path towards more debt and waste."

For More Information:
Melissa Cubria
Emily Slatter
(512) 610-0083

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"Perry's chief transportation aide promised a hard push to restore the authority to enter into so-called comprehensive development agreements in 2011"

Private toll roads get new push in Texas


Dallas Morning News
Copyright 2011

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."


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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Monday, January 03, 2011

"Texas is starting at potentially a $25 billion deficit on a two-year budget of around $95 billion. That's enormous."

There's One Huge State Budget Crisis That Everyone Is Refusing To Talk About


Joe Weisenthal and Gus Lubin
Business Insider
Copyright 2011

You know the story and you know the names: states like Illinois, New Jersey, New York, and California are supposed to be in huge financial trouble thanks to bloated governments, business-unfriendly regulations, and strong public sector unions.

After a crisis-free 2010, investors are expected to punish these hotbeds of bad governance in a muni bond market rout, at least if pundits like Meredith Whitney are correct.

But there's one state, which is fairly high up on the list of troubled states that nobody is talking about, and there's a reason for it.

The state is Texas.

This month the state's part-time legislature goes back into session, and the state is starting at potentially a $25 billion deficit on a two-year budget of around $95 billion. That's enormous. And there's not much fat to cut. The whole budget is basically education and healthcare spending. Cutting everything else wouldn't do the trick. And though raising this kind of money would be easy on an economy of $1.2 trillion, the new GOP mega-majority in Congress is firmly against raising any revenue.

So the bi-ennial legislature, which convenes this month, faces some hard cuts. Some in the Texas GDP have advocated dropping Medicaid altogether to save money.

So why haven't we heard more about Texas, one of the most important economy's in America? Well, it's because it doesn't fit the script. It's a pro-business, lean-spending, no-union state. You can't fit it into a nice storyline, so it's ignored.

But if you want to make comparisons between US states and ailing European countries, think of Texas as being like America's Ireland. Ireland was once praised as a model for economic growth: conservatives loved it for its pro-business, anti-tax, low-spending strategy, and hailed it as the way forward for all of Europe. Then it blew up.

This is the sleeper state budget crisis of 2011, and it will be praised for doing great, right up until the moment before it blows up.

(Disclosure: The author went to UT-Austin, and goes back there a few times per year.)

Click HERE to see the biggest state gaps.

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