TTC / TOLL HEARING and TCC & NAIS RALLY Coverage

 

  

80TH LEGISLATURE

Toll hearing focused on private turnpike deals

Senator calls for moratorium on 50-year tollway leases.

By Ben Wear, Laylan Copelin
AMERICAN-STATESMAN STAFF  http://www.statesman.com/news/content/region/legislature/stories/03/02/2toll.html
Friday, March 02, 2007

Texas senators on Thursday peppered state transportation officials with questions about whether their turn to private toll roads is really the best route around the state's growing traffic jam.

In an all-day hearing attended by hundreds of irate Texans, members of the Senate Transportation and Homeland Security Committee questioned officials about upfront fees and back-end profits for the state's private partners, as well as whether the job could be done better with public financing and more oversight by elected officials rather than solely by the governor's appointees on the Texas Transportation Commission.

In short, the senators wanted to know: Are private toll roads a good deal?

The Transportation Commission's response: With the Legislature having saddled it with a frozen gasoline tax ever diminished by inflation, private financing was practically the only deal left to them.

At times, Thursday's hearing resembled the noisy backlash at toll road hearings around the state for the past several years.

But it veered on to a less emotional path when the senators and transportation officials began discussing how best to mitigate the looming gridlock spreading throughout the eastern third of Texas and how to pay for the next generation of transportation.

Senators made it clear, however, that they think it's time to put on the brakes.

In particular, members of the transportation panel worry that private toll roads inevitably mean higher tolls for drivers — that is, voters — and that profits from toll roads that could have been spent on still more highways will instead go to corporate shareholders.

"I would like to see (the Texas Department of Transportation) slow down considerably to let us vet this more," said state Sen. John Carona, R-Dallas, the committee chairman and of late a caustic critic of the Transportation Commission and its toll road policies.

As for so-called comprehensive development agreements, leases that give private companies control and the proceeds from tollways for up to 50 years, Carona said, "My hope is that TxDOT will agree to a moratorium."

In an interview, Carona acknowledged that the Legislature itself, by failing to raise the state gas tax since 1991 even as construction costs have skyrocketed, helped create what has become a mountainous backlog of needed highway projects around the state.

And it was lawmakers, after all, who passed a huge transportation bill in 2003 that gave the Transportation Commission the very policy tools that senators now find over the top.

"Every one of us, myself included, are to blame" for a transportation funding shortfall estimated to be about $80 billion over the next generation, Carona said. Carona has filed a bill that would allow the gas tax to float upward based on an index of highway construction cost increases.

Carona and other legislators, most of them in the Senate so far, also think that the Transportation Department and the five commissioners who run it have taken a heavy-handed approach on the toll issue. Thursday's hearing, fully four years into what has been a historic change in how the state pays for major highway projects, was one of the few where people on both sides of the issue were given an orderly and complete opportunity to present their case.

Members of the public were given the chance, as they were last summer in more than 50 hearings around the state on the proposed Trans-Texas Corridor, to have their say on the subject, and about a hundred people signed up to speak to the committee. Those three-minute presentations overwhelmingly focused on Gov. Rick Perry's Trans-Texas Corridor plan of cross-state tollways and rail lines and chiefly disparaged the plan.

Many of the speakers live on land that could be taken for either the twin road to Interstate 35 or a new route called TTC-69 from the Rio Grande Valley to Northeast Texas.

But the bulk of the eight-hour hearing involved presentations by people close to the issue — bond financiers, Transportation Department staffers and commissioners — and the dialogue carried more light than heat.

Jere Thompson Jr., a Dallas businessman and scion of the family that owned 7-Eleven, served on toll road authorities for Republican Govs. Bill Clements and George W. Bush.

Thompson criticized the long-term leases with private toll road operators as "a rush to sell the crown jewels of the state."

The Transportation Department has reached two such deals so far, both with Spanish company Cintra and minority partners. The company will build the southerly 40 miles of Texas 130 from Mustang Ridge to Seguin, giving the state $25 million and a cut of the toll revenue for the next half-century.

Tuesday, Gov. Rick Perry and Dallas-Fort Worth officials announced that a Cintra-led partnership had beat out two competitors to build Texas 121 north of Dallas by pledging to pay the state $2.1 billion up front and at least $800 million more in the coming decades.

Thompson argued that public toll road authorities, such as the North Texas Toll Road Authority, could build and finance toll roads cheaper than private investors, a contention disputed by state transportation officials.

He said the state had flip-flopped its priorities for paying for roads — gasoline tax, tolls and private financing — to put private equity investors as the first option.

In an interview after the hearing, Ric Williamson, chairman of the Transportation Commission, disputed some of what Thompson had to say.

While public entities may get cheaper financing upfront, Williamson said, private investors can make a better offer to the state because of tax consequences of writing off depreciation, for example.

More important, Williamson said, the state didn't have the cash necessary to get public financing in the bond market, or at least the copious amounts that private companies are likely to bring to the table for almost 30 projects similar to Texas 121.

Think of it as a person buying a house, Williamson said: The State of Texas didn't have the down payment to get a loan. Private companies such as Cintra have that equity.

Dennis Enright, a financial analyst with NW Financial Group LLC invited to testify by Carona, said putting private companies in charge of toll roads, and getting a big bonus on the front end from them, inevitably leads to higher tolls for drivers.

"Without the upfront money, the tolls would be a fraction," Enright said.

He said drivers on the Texas 121 toll road would, in effect, be subsidizing roads for other drivers.

"Is a toll a toll, or is it allowed to be a tax?" Carona said. "Today's tolls are just disguised taxes."

bwear@statesman.com; 445-3698

lcopelin@statesman.com; 445-3617

Postcards from the Lege  March 1, 2007

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Postcards from the Lege

 

Carona’s take on toll road hearing

By Ben Wear | Thursday, March 1, 2007, 01:01 PM

While the public hearing on toll roads droned on inside the Capital Extension auditorium around noon, the man responsible for today’s show took a few minutes to share what he sees as the big picture with reporters outside.

“The real focus has to be on public-private parterships” for toll roads, said state Sen. John Carona, R-Dallas, chairman of the Senate Transportation and Homeland Security Committee. “The Trans-Texas Corridor will take care of itself eventually. In fact, there’s a high probability they’re only one gubernatorial election from being abolished.”

The more insidious public policy issue, from Carona’s point of view, is the Texas Department of Transportation’s burgeoning use of so-called “comprehensive development agreements” where it contracts with private companies to build, operate and collect the profits from toll roads. That’s the approach being used on the proposed Trans-Texas Corridor, a network of cross-state toll roads promoted by Gov. Rick Perry.

But the department is also beginning to use such agreements for purely urban roads, agreeing this week with Spanish company Cintra for Cintra and its partners to take over the existing Texas 121 toll road north of Dallas and extend it. Under the company’s winning bid, it would pay the state $2.1 billion up-front and at least another $800 million over 50 years for the right to run the 26-mile road.

That bonanza, and others like it, will allow the state to build more highway projects faster. But it will also, Carona said, saddle drivers with the highest possible tolls for decades to come. Carona wants the Transportation Department to voluntarily pull back on such agreements, and he supports a bill he said that will soon be filed to put a moratorium on private road agreements with the state.

Beyond all that, Carona believes the Legislature was wrong to give the Transportation Department as much license as it has to build toll roads and use excess money from those roads for other transportation projects.

“Is a toll a toll, or is it to be allowed to be a tax?” Carona said. “Today’s tolls are just disguised taxes.”

Carona said he and his fellow legislators over his 19 years in the Legislature put the Transportation Department in a bad position by declining to raise the state gas tax, creating a transportation funding shortfall that now runs to the tens of billions.

“Everyone of us, myself included, are to blame,” Carona said. “But when you make a mistake, in politics just as in life, the best thing to do is correct it. It’s incumbent on us to change bad law.”

The bad law, in Carona’s view, are two massive transportation bills passed by the Legislature in 2003 and 2005. That 2003 bill, among many other things, authorized the Trans-Texas Corridor and expanded what could be done with public-private partnerships on roads.

Will any of this — raising the gas tax, limiting private road deals — happen this session? Carona is pessimistic, given that House Transportation Committee chairman Rep. Mike Krusee, R-Williamson County, and Perry are fully supportive of what the Transportation Department has been doing.

“I believe the majority of the House and a majority of the Senate, if given the chance, would vote to substantially curtail the power of the Department of Transportation,” Carona said. “The people of Texas, the people who hired us, want change. …Whether we can make these changes this session remains to be seen.”

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First up at the toll road hearing: The anti's

 

By Ben Wear | Thursday, March 1, 2007, 09:10 AM

The score so far as the Senate Transportation and Homeland Security Committee listens to the first of dozens of people talk about toll roads: Toll opponents, 12, TxDOT, 0.

The speakers so far, all of them playing to an applauding audience and periodic “amens!”, have had nothing good to say about toll roads and the Trans-Texas Corridor. This is of course no accident. Committee chairman Sen. John Carona, R-Dallas, has filed several bills this session that would roll back the authority of the Texas Department of Transportation to build toll roads and put them in the hands of private companies.

“The immediate benefits (of private road investments) are attractive, but the long-term risks are unknown,” said David Stall of Fayette County, founder of Corridor Watch and an opponent of the Trans-Texas Corridor. “We are on the verge of relinquishing control of vital public infrastructure in ways that we cannot predict today.”

Of course, if you don’t like toll roads or using private capital to get them built, you’d have to come up with other money or accept more and more traffic congestion. The Legislature has not raised the state’s 20-cent a gallon gas tax since 1991 and doesn’t appear anxious to do so. Sen. Elliot Shapleigh, D-El Paso, asked one of the first witnesses for alternatives.

“What I want to hear from you is what taxes you support to address our needs,” Shapleigh said.

Carona has filed a bill that would increase the state gas tax by tying it to the increase in road construction costs.

But the Senate cannot initiate tax increase legislation. Carona would have to amend a House bill instead, and there is a candidate. That bill is more modest, however, allowing the gas tax to increase only with the consumer price index.

Will either pass, or be signed by Gov. Rick Perry? The odds remain low on that.

 

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Source: http://www.salcostello.blogspot.com

Sinbad the rooster doesn't want an identification tag, according to his owners, organic farmers Skip Sconnett and Erin Flynn of Austin.

"We're small farmers, and our animals have names and don't need tags," Sconnett said. So Sinbad came along when Sconnett and Flynn and their children, Ethan, 4, and Avery, 6, joined hundreds of protesters — some on tractors and horseback — to march up Congress Avenue toward the Capitol on Friday afternoon.

"We want to send a message to our state government that the people of the State of Texas don't want the Trans-Texas Corridor or the animal identification program," said Hank Gilbert, the 2006 Democratic Party candidate for Texas Agriculture commissioner. Gilbert, who lost to Susan Combs, helped organize the march along with the Farm and Ranch Freedom Alliance.

Outcries from farmers and livestock owners have already stalled the law passed by the Texas Legislature in 2005. It gives the Texas Animal Health Commission the authority to require livestock owners to register their "premises," that is registering their land and listing the types of animals on it.

Livestock owners — even those who own only one chicken, goat or pig — would have to pay an annual $10 fee, with a fine of up to $1,000 for noncompliance. The law would have been made compulsory in July 2006 but was put on hold until this year.

The registration is part of the U.S. Department of Agriculture's national identification system, which is voluntary for states and, if fully implemented, would allow officials to trace the movement of diseased livestock or poultry within 48 hours.

The national system also calls for livestock owners to tag animals. The commission has not yet required the tags, which could come in a variety of forms, including radio-frequency ear tags, implants, leg bands or ear notches.

Livestock owners say that the tags would be expensive, possibly driving some smaller farms out of business.

State Rep. Sid Miller, R-Stephenville, chairman of the House's Agriculture and Livestock Committee, said lawmakers made a mistake when they passed the law. Miller said they thought Texas needed the law to be in compliance with the federal program. But because the federal program is now voluntary, he said the state animal identification should also be voluntary.

On Tuesday, the House committee reviewed HB 461, filed by Miller and more than 40 co-authors, which would make Texas' registration and tagging laws voluntary. Animal identification isn't a safety issue, he said, because there are already ways to track livestock.

Protesters also said the Trans-Texas Corridor, a 4,000-mile network of tollways, railroads and utility corridors proposed by Gov. Rick Perry in 2002, threatens farmers and livestock owners who would have to surrender some of their land for the massive transportation project.

khumphrey@statesman.com; 445-3658