Hold Those Tolls! Lege leaves question: How will we pay for roads?

By Larry Schooler - The Austin Chronicle - July 27, 2007

It was Dec. 16, 2004, and Rep. Mike Krusee, R-Round Rock, was sitting pretty. He was virtually a guest of honor at a meeting of the Texas Transportation Commission, across the street from his Capitol office. A little more than a year before, as chairman of the House Trans­port­ation Committee, Krusee had successfully carried the behemoth House Bill 3588. Among its many and complex provisions, the bill helped smooth the way for Gov. Rick Perry to get the Texas Transportation Commission to approve early plans for the Trans-Texas Corridor. Stretching from Mexico to Oklahoma, the corridor would be a mammoth transportation project running parallel to I-35. As conceived, it would include free and tolled highway lanes, as well as rail and utility lines, and would be built and maintained by the privately held Spanish company Cintra (an international operator of toll roads and car parks) and the San Antonio-based Zachry Construction Corp.

At the Texas Transportation Commission meeting, attended by the governor himself, Krusee didn't say much. Actions spoke louder than words -- and on this day, the commission was acting on a project he had fought long and hard to convince legislators to support. By way of acknowledgment, commission Chairman Ric Williamson duly praised Krusee for his work at the Capitol. Krusee had a flight to catch, but first he took the floor for a brief stroll down memory lane.

"I started thinking about the first time that I met Ric Williamson," Krusee recalled, according to a meeting transcript. It was 1992, and Krusee had just been elected to the House; then-Rep. Williamson invited the 32-year-old Krusee to his apartment. "So I went over there, and Ric had one of his good friends over there, and that was the night I met Rick Perry, who was the ag commissioner, and we talked long into the night about accomplishing great things for Texas, about how to be a great leader for Texas. And we weren't thinking about how to be on Texas Monthly's 10 best [list] -- but you know, Ric, I think we were talking about days like this.

"And you know, governor," Krusee continued, "A little over two years ago when you made that presentation [about the Trans-Texas Corridor] in the auditorium at the Capitol, and I was in the audience, and like everybody else out there, I didn't really fully grasp what the hell you were talking about." The audience laughed.

"You do now, don't you?" asked Perry.

"I do now," Krusee replied. "And I want to congratulate you on your vision and your leadership, and the commission and your staff on your hard work, because you have made this, I think sincerely, the most historic day in transportation, not just for Texas, but for the United States since Eisenhower." With that, Krusee left the meeting.

Flash forward nearly 21/2 years -- to May 2, 2007. Chairman Krusee stood on the House floor, without a single transportation ally. Every House member present, except Krusee alone, voted in favor of HB 1892, which included a two-year moratorium on many of the public-private partnerships such as the one the Texas Department of Transportation had developed with Cintra-Zachry to build the Trans-Texas Corridor. "Who knew that trying to reduce congestion could be such a lonely fight?" wondered Coby Chase, who monitors the Legislature for TxDOT.

Perry eventually vetoed HB 1892, but a nearly identical Senate substitute, Senate Bill 792, later handily passed both the House and Senate, and Perry signed it into law. The massive bill forbids TxDOT from negotiating a tolling agreement with a private company until Sept. 1, 2009, exempting some projects already under­ way. Even among those exempted projects, some got swept up in the post-session, anti-privatization maelstrom. For instance, at its June meeting, the Texas Transportation Com­mission awarded a contract for the State High­way 121 project (in the Dallas/Fort Worth Met­ro­plex) to the North Texas Tollway Authority -- after initially awarding the contract to Cintra.

SB 792 also states that if a company paid TxDOT money up front for the rights to build a toll road in a particular region, TxDOT must use that money on other projects in that region. It requires TxDOT to give local tolling agencies preferential treatment over private companies by giving them free right-of-way and the right of first refusal on building toll roads. In essence, the Legislature left private companies interested in transportation on the bench for the next two years.

Politics or Policy?
So what happened? How could Rep. Krusee, four years earlier, convince all but three members of the House to approve legislation that enabled private companies to build highways, only to find that entire concept rejected out of hand this year? Not surprisingly, it depends on whom you ask.

"What happened was," Krusee said after the session, "TxDOT was going not just against the traditional rural opposition to road building but against Dallas and Houston in a turf battle over who would build the roads." In Dallas, Houston, Austin, and elsewhere, public toll-road authorities were getting outgunned by private companies like Cintra, and they weren't happy, Krusee says, so they asked their legislators to give tolling authorities right of first refusal. Krusee didn't take it personally that he seemed to be the only member of the House who wanted private companies to continue building roads. "I think it was a political vote," he said. "Members thought it was necessary to vote that way to get votes back home; they felt like they'd be criticized for voting against it."

Chase agrees with Krusee and points to the larger political context. "During this last election cycle, we had a candidate for governor; she liked to campaign against foreigners and against toll roads," Chase explained, in reference to gubernatorial candidate Carole Keeton Strayhorn, who ran against Perry as an independent. "And then we had the [federal] Dubai Ports issue, and this was such a misleading discussion in the public. ... This Dubai company wouldn't own any port; they were just going to run them, and the government would lease it to them. Then Cintra becomes the successful proposer on the corridor and ... it kind of kick-started the 'no foreigners doing business in Texas' discussion."

But David Stall, of the anti-Trans-Texas Corridor group CorridorWatch, has a less benign explanation. Stall says legislators belatedly did their homework on public-private partnerships. "The Legislature did not recognize the shift in transportation policy that they were creating" in 2003, Stall said. "We started to see some handwriting on the wall in 2005, with some moratorium bills that didn't go anywhere. The reason they didn't go anywhere was we were still educating people. I think if legislators were educated in 2003 on what the corridor was, if they had understood it, they would not have voted to authorize its creation."

Looking for Consensus
Enter former Austin mayor and freshman Sen. Kirk Watson. Watson wasn't around in 2003 for the original vote on the corridor and agreements with private companies to build toll roads. But he came to the Lege with voices ringing loudly in his ear -- those of his new constituents. "Part of the reason there is this vitriolic, partisan [no-toll or toll] debate is that we haven't had a thoughtful, systematic, transparent means of analyzing what we want to do," he says. "There are clearly two agreements in this community -- one, we are too badly congested, and two, we want it fixed. When we get to three -- how to do it -- now it's not as unanimous."

Watson is unconvinced that letting a private company pay for, build, and make a profit on a new road is the best way to go. "I was skeptical of these comprehensive development agreements -- how long they were, their noncompete clauses. ... I happen to be a believer that if you're going to privatize, it should be for the stuff the public can't get done. I wasn't convinced -- at beginning or end of session -- that we weren't going to just have privatization on stuff that we couldn't get done in the public sector."

In other words, Watson didn't want profit-minded private companies building roads that could be built by government -- especially if, under noncompete clauses, the state has to pay the companies back for highways that take traffic (and potential income) away from the private toll roads. "I wanted to allow local communities to have more say," Watson explained. "It struck me that one of the things that was missing in the process was we needed more accountability in the system, and that probably meant elected officials having a role." That potentially means fewer deals with private companies and more for state tolling authorities or transportation commissions.

Watson had more than just his own rookie legislative voice to add to the discussion -- in January, he became chairman of the Capital Area Metropolitan Planning Organization (the group in charge of the region's transportation projects) and vice chairman of the Senate Transportation Committee. At his suggestion, CAMPO indefinitely postponed any talk of a second phase of toll roads until it can take more time to sort out how best to finance transportation projects.

But the Legislature's decision to halt most road-building agreements with private companies leaves Central Texas in a bind, as Krusee sees it, when it comes to decongesting traffic. "To my mind, the bad thing about what the Legislature did this session was it took that option away" -- the option to have a private company get started now on building a given road. The Legislature's action doesn't mean that Austin or the surrounding jurisdictions can't build any more toll roads, but it means they can't call on a private company to do so. So as Krusee sees it, we're back at ground zero: Lacking sufficient up-front public funding, the state, via TxDOT, had been looking toward private companies as ideally positioned to help build roads quickly and efficiently, based on the promise of future toll revenue. Now that option is off the table, at least temporarily.

With toll roads built by private companies, says TxDOT's Chase, "You [the state] give up some future revenue to get a project now. You get a guaranteed price on the project, you are guaranteed the project will be returned to you in a certain condition, and the price you pay is you say the company can realize a profit on this over a certain amount of time. Some people had concerns of unlimited company profits without ever reading what the contracts were -- the companies can't raise tolls any time they want. If the profits get to a certain point, it goes back to the region to build more roads."

Often, as was the case with Cintra and the Trans-Texas Corridor, the company pays a large sum -- generally billions of dollars -- to buy the rights to build a road, which could mean the state could get other projects started more quickly using those advance funds.

Even Watson, skeptical as he is that a private company can handle transportation any better than the state, admits that a moratorium on deals with private companies could make it harder to do anything significant about area congestion for the next couple of years. "We're going to need to be honest about limitations of financing tools," he says. "In the state appropriations bill, there was an effective decrease in transportation money, when you consider inflation. There has been more moving of funds from transportation. Many people say they want an increase in gas tax; the House approved a gas tax holiday that would have taken away gas tax money for three months out of the year [that measure died in the Senate]. The money offered to states from federal government is being decreased; we just got notice that federal money rescinded $72 million more. We're going to have to start being honest about the limitations we have on being able to meet the need to fix the problem."

Stranded on the Highway
To that end, Watson has been meeting every two weeks with a CAMPO's Mobility Finance Task Force, which includes elected officials, outside transportation experts, even the executive director of the Community Part­ner­ship for the Homeless. Meanwhile, TxDOT has given preliminary approval to a set of toll projects in the Austin area, including some "managed lanes" (for use, say, by carpoolers or during rush hour) as well as the second phase of toll roads Watson doesn't want to talk about for now. TxDOT is also holding a series of public meetings later this year to explain the ramifications of what the Legislature did in suspending many of the proposed deals with private companies.

"We're doing things that no other department of transportation is doing," says Chase. "We're learning it as we go, and we have never ever had to engage the public on this large a scale in our 90-plus years of existence. And in many cases, we underestimated that challenge."

That last sentiment could also apply to those who want to do something about Austin's traffic congestion. If the Lege managed to placate the anti-toll crowd, at least for the time being, it didn't do much to make it any easier to travel on Central Texas highways, nor to address long-term projections that show regional traffic only getting worse. More broadly, the moratorium doesn't begin to address larger questions raised by traditional highway approaches to transportation: land use, mass transit options, pollution and global warming issues, or even integrated urban planning that might make transportation issues less intractable and expensive.

Those are the kind of issues that Sally Camp­bell hoped the Legislature would consider. Campbell is the executive director of Envision Central Texas, a 6-year-old nonprofit coalition aimed at addressing regional growth. Campbell wanted to hear more discussion and action on giving counties more control over land uses around future highways and relocating Union Pacific away from rail lines that commuters could use. "When we truly want to see this multimodal transportation system develop, the next step is to look at the transit options. And right now, we're trying to figure out what will work and what's the logical system. If you can think about commuter rail from San Antonio to Georgetown by relocating Union Pacific, that makes a whole other mode within the realm of possibility."

But rail relocation, and most other proposals for broadening the state's transportation options, remained stuck at the station during the 80th Legislature. What most legislators wanted to discuss was how to pay for new roads and where to put them. Whether Krusee's interest in more privatization or Watson's desire for greater accountability in transportation policy ultimately win the day in the current discussions, it could be two years -- or more -- before getting around seems much easier, even though commuter rail could start running through the region by the end of 2008.

That will be just in time for the 81st Legis­lat­ure -- and a whole new set of political detours during the next round of transportation debates.
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Meetings to Monitor

This is a partial list of meetings. Only Denton, Dallas, Tarrant and Collin County Commissioners meetings are listed here. Please check County website for other counties. Please check city websites for City Council Meetings.

Collin County Commissioner's Court
Monday, July 23, 9 am
210 S. McDonald St., 6th Floor of Collin County Courthouse, McKinney
Agenda
(Consideration, discussion and any action regarding the Proposed Comprehensive Development Agreement (CDA) projects for submittal to the Regional Transportation Council (RTC) and the North Texas Council of Governments (NCTCOG), Engineering and consideration, discussion and any action regarding 2007 RTC Comprehensive Development Funding Initiatives, Commissioners Court.)
Denton County Commissioners Court meetings are now televised weekly on five cable stations in Denton County. Cable TV Broadcast Schedule

NCTCOG - Managed HOV Lane Pricing
Tue, July 24, 10 am - 12 pm
Where: NCTCOG offices, 616 Six Flags Dr., Arlington TX Executive Director's Conference Room

Tarrant County Commissioner's Court
Tue, July 24, 10 - 11 am
Agenda

Dallas County Commissioner’s Court
Tues., July 24, 9 am
Agenda

Denton County Commissioners Court
Tues., July 24, 9 am
Agenda
(Declare Lakeview Boulevard project as not viable and approve the transfer of funds from Lakeview Blvd. to Lake Lewisville Toll Bridge/FM 720 project for the purpose of acquiring right of way and authorize the Auditor to make payments to TxDOT for the Right of Way agreements, Precinct #1, and any appropriate action. Commissioner Precinct #1)
(Approval of the creation and establishment of a fresh water supply district to be known as “Belmont Fresh Water Supply District No. 1 of Denton County” located in Denton County Commissioner Precinct 4, and appointment of temporary supervisors to serve on the board of the District until permanent supervisors are elected, and any appropriate action.)
Watch live online

NTTA Board Meeting
Wednesday, July 25, 2007 - 8 a.m.
Board Room of the NTTA Administrative Offices
5900 W. Plano Parkway, Suite 200, Plano, TX
See notice

NCTCOG Executive Board Meeting
Thu, July 26, 7:00am - 4:30pm
Where: NCTCOG Offices, 616 Six Flags Dr., Arlington TX Wm J. Pitslick Executive Board Room

NCTCOG - Information and Referral Bidders Conference
Thu, July 26, 3:30 - 5:00pm
Where: NCTCOG Offices, 616 Six Flags Dr., Arlington Tx Tejas Conference Room (map)


NCTCOG - Surface Transportation Technical Meeting (STTM)
Fri, July 27, 1:30 - 4:00 pm
Where: NCTCOG Offices, 616 Six Flags Dr., Arlington, TX Transportation Council Room (map)

NCTCOG - RTC Public Meeting
Mon, July 30, 6:30 - 8:00 pm
Where: Carrollton Public Library at Josey Ranch Lake, 1700 Keller Springs Road, Carrollton, TX 75006

Tarrant County Commissioner's Court
Tue, July 31, 10 - 11 am
Agenda

Dallas County Commissioner’s Court
Tue, July 31, 9 am
Agenda

NCTCOG - RTC Public Meeting
Tue, July 31, 12:00 - 1:30 pm
Where: Fort Worth Intermodal Transportation Center, 1000 Jones Street, Fort Worth, TX 76102

NCTCOG RTC Public Meeting
Tue, July 31, 6:30 - 8:00 pm
Where: Irving Central Library, 801 W. Irving Blvd., Irving, TX 75060

Collin County Commissioners Court Workshop
Mon., Aug. 6, 1 p.m.
210 S. McDonald St., 6th Floor of Collin County Courthouse, McKinney
More information

Senate Committee on Transportation and Homeland Security Hearing in Irving, TX
Tuesday, Aug. 7, 2007, 8:00 a.m.
Irving Lecture Hall, Westin DFW Airport, 4545 W. John Carpenter Freeway, Irving, Texas.
The Committee will begin at 8:00 a.m. and hear invited and public testimony on the implementation of legislation and related issues. See notice and agenda.


Tarrant County Commissioner's Court
Tue, August 7, 10 - 11 am
Agenda

Dallas County Commissioner’s Court
Tue, August 7, 9 am
Agenda

NCTCOG - RTC - Regional Transportation Council
Thu, August 9, 1:30 - 4:00 pm
Where: NCTCOG Offices, 616 Six Flags Dr., Arlington, TX Transportation Council Room

NCTCOG -Regional Energy Efficiency & Emissions Reductions Initiatives Roundtable
Fri, August 10, 1:30 - 3:30 pm
Where: NCTCOG Offices, 616 Six Flags Dr., Arlington, TX Transportation Council Room

NCTCOG - Amtrak Relocation/Tower 55
Mon, August 13, 3:30 - 5:00 pm
Where: NCTCOG Offices, 616 Six Flags Dr., Arlington, TX Pecan Conference Room

Tarrant County Commissioner's Court
Tue, August 14, 10 - 11 am
Agenda

Dallas County Commissioner’s Court
Tue, August 14, 9 am
Agenda

NCTCOG - DFW Clean Cities Advancing the Choice
Wed, August 15, 9:30 - 10:30 am
Where: NCTCOG Offices, 616 Six Flags Dr., Arlington, TX

Tarrant County Commissioner's Court
Tue, August 21, 10 - 11 am
Agenda

Dallas County Commissioner’s Court
Tue, August 21, 9 am
Agenda

NCTCOG - Executive Board Meeting
Thu, August 23, 6:00am - 4:30 pm
Where: NCTCOG OFFICES,616 Six Flags Dr., Arlington, TX William J. Pitstick Executive Board Room

NCTCOG - North Texas Anti (Human) Trafficking Task Force
Thu, August 23, 9am - 12 pm
Where: NCTCOG Offices, 616 Six Flags Dr., Arlington TX Metroplex Conference Room

NCTCOG - Surface Transportation Technical Committee - STTC Meeting
Fri, August 24, 1:30 - 4:00 pm
Where: NCTCOG Offices, 616 Six Flags Dr., Arlington TX Transportation Council Room

Tarrant County Commissioner's Court
Tue, August 28, 10 - 11 am
Agenda

Dallas County Commissioner’s Court
Tue, August 28, 9 am
Agenda

NCTCOG - DFW Clean Cities Coalition
Thu, August 30, 1:30 - 3:00 pm
Where: NCTCOG OFFICES, 616 Six Flags Dr., Arlington, TX Six Flags Conference Room

Political Toll - Moratorium preserves big chunks of Perry's Trans-Texas Corridor

by Eileen Welsome - The Texas Observer - June 15, 2007
The conservatively dressed representatives of the Texas Department of Transportation who walked into the Capitol rotunda this spring found themselves engulfed in a perfect storm. For months, bloggers had been at their keyboards, whipping up fractious constituents. Demonstrations had been held, bumper stickers passed out, and alliances forged between groups that normally find themselves at opposing ends of the political spectrum. They had a common goal: slaying the Hydra-headed monster—the Trans-Texas Corridor—a network of supercorridors with lanes for cars, trucks, trains, and pipelines, as well as other infrastructure.

Ric Williamson, who chaired the monthly Texas Transportation Commission meetings with the benign indifference of Henry the Eighth, could have looked out a window of the gothic Greer Building on 11th Street and seen the gathering clouds at the Capitol. But Williamson, an old friend of Gov. Rick Perry and an ex-legislator himself, was not concerned with such piffle. He had more important things on his mind, like the $86 billion shortfall that TxDOT faced in a few decades, when there would not be enough money to maintain roads. Williamson felt the best way to solve the $86 billion problem (a figure state auditors would later say was inflated) was to let deep-pocketed multinational companies build gleaming new tollways that would be paid for by Texas drivers for the next two, three, or even four generations.

Read entire article in The Texas Observer

Read earlier article:

Low-Hanging Fruit
Texas faces obvious problems that the 80th Lege should fix. It probably won't.

by David Pasztor - The Texas Observer - Jan. 26, 2007
Streets of Gold

Since 2001, a clique of powerful Texas officials and their friends in the business community have been laying the legal and legislative groundwork to build a network of superhighways and toll roads. One of the most ambitious road-building plans in the world, the for-pay highways will suck up thousands of acres of farmland, induce development, and do little to reduce congestion along the state’s most glutted highways, most notably Interstate 35.

In the process, thousands of miles of state roads that have already been paid for by motorists through gasoline taxes will be turned over to multinational firms that will collect tolls for the next 50 years or so. The deals have drawn plenty of criticism, but with the help of state legislators and a fleet of Madison Avenue-styled public relations firms, highway officials so far have succeeded in steamrolling the opposition. The current leadership authored the plan and has shown little willingness to back away.

New highway proposals are on the drawing board, and portions of State Highway 130, which will likely be the first leg of what’s called the Trans-Texas Corridor 35, are already open. Perry, Round Rock’s Republican state Rep. Mike Krusee, and Ric Williamson, chairman of the Texas Transportation Commission, are the three officials primarily responsible for pushing this new world order.

In the coming weeks, the Texas Department of Transportation—an agency with annual revenues greater than the entire income of some states—will be back at the Legislature trying to widen its powers. It will also be asking for millions to fund a new entity called the Texas Rail Relocation and Improvement Fund, which basically will help two of the largest rail carriers in Texas—Burlington Northern Santa Fe Corp. and Union Pacific Corp.—upgrade their rail lines and cash in on the staggering growth in freight transportation projected for the next 10 years or so.
TXDOT wants to lift the cap on the 50- to 70-year contracts so it can negotiate more contracts lasting for as long as 100 years with multinationals from Spain, Australia, and Sweden. TXDOT also wants to amend state laws so it can perform its own environmental reviews and approvals. It might seem like an obvious conflict of interest for a department whose main function is to bulldoze and pave, but TXDOT says it could use the latitude to build projects faster, thereby reducing congestion, improving air quality, and enhancing safety.

Though deals are being drawn up, contracts signed, and concrete poured, there’s still time to rethink the toll roads if legislators decide to enact a moratorium and demand an open and honest debate with the public about how to address transportation gridlock. Then voters could be allowed to decide by what road they prefer to travel. That, as the poet says, may make all the difference.

The Best Leadership Money Can Buy
A good argument can be made that Texas’ inability to deal with its pressing problems stems from the ironclad grip a few contributors and lobbyists hold over the state’s policy agenda. The influence of their money drives the privatization debate and is felt in most every policy area, from education to transportation and electricity to social services. In one small example, most Texans, including most legislators, are opposed to school vouchers. The fear is that they will take money away from already underfunded public schools. Yet in 2005, Speaker Craddick scheduled a vote on a voucher bill. Might this have had something to do with the fact that the state’s biggest voucher proponent, hospital-bed magnate James Leininger, is also one of the GOP’s biggest political donors? Most recently, in the 2005-2006 election cycle, Leininger gave more than $5 million to Texas candidates. He’s not the only one. Republican home builder Bob Perry—the biggest political donor in the state and nation—gave $6.7 million to Texas candidates and political action committees, according to campaign watchdog Texans for Public Justice.

A number of simple steps could instantly diminish the power of money over sound public policy in Texas. The first would be an aggregate limit on individual contributions. Texas is one of the few states that have no limits on the size of campaign contributions, allowing mega-donors like Perry and Leininger to swamp an election with an endless flow of cash. During the 2004 election cycle, 87 individuals or couples donated more than $100,000 each to state candidates and committees. This accounted for 10 percent of all political donations. TPJ is part of a campaign-reform coalition that has suggested a modest contribution cap of $100,000 per election cycle. While legislation has been filed along these lines, with the current leadership it’s not likely to prosper.

In June 2006, state District Judge Mike Lynch tossed out a felony indictment against the Texas Association of Business. Lynch ruled that TAB had not expressly advocated the election or defeat of candidates when it spent $1.9 million in secret corporate money on “issue” ads in the 2002 election cycle. Lynch wrote in his order that most “non-technical, common-sense people” would see the ads as clearly violating the law, but that “these statutes and this indictment aren’t equipped to do the job [of keeping corporate money out of elections].” Unless the law is strengthened to strictly prohibit the use of corporate money for electioneering, business interests like TAB will once again use undisclosed corporate money to smear candidates with whom they disagree.

Finally, more legislation would probably not be necessary if Texas had a functioning Ethics Commission. Unfortunately, to call the current commission dysfunctional and ineffectual is charitable. It is a paper tiger, underfunded and, worse, loathe to enforce the law or improve upon it through its rule-making authority. At a minimum, legislators should create a separate law-enforcement division for the commission. They should also provide for a budget based on a funding formula that is independent of the Legislature. Finally, the eight-member commission should be abolished and replaced with one accountable executive director. As with most of what Texas desperately needs fixed, the state’s leaders won’t likely give the keys to the henhouse back to the public this session without a fight.

See entire article