A Line in the Sand - Fed-up Texans voice disapproval of Trans Texas Corridor

March 26, 2007

Fed-up Texans by the hundreds descended on the Capitol in Austin, March 1st to voice their disapproval of the Trans Texas Corridor (TTC). About one hundred citizens signed up to speak at the hearing while hundreds more submitted written comments. "We want a do-over," said Willa Kulhavy of Garland. "I think it's fair to say that many legislators who voted for this legislation in the past would like a do-over as well," said Sen. John Carona, R- Dallas. Carona is the chairman of the Senate Transportation and Homeland Security Committee. "I would like to see [the Texas Department of Transportation] slow down considerably to let us vet this more," said Carona. "My hope is that TxDOT will agree to a moratorium," he continued. Members of the public used their three-minute presentations to excoriate Governor Perry's grand plan to pave their farms and ranches for a road that many believe will only benefit the state and its elitist business partners. Legislators are belatedly trying to correct their errors in judgment from past sessions by offering a number of legislative fixes, including HB 857 that repeals the authority for the TTC and HB 962 and SB 165 that provides increases to the state gas tax. Texans hope their "line in the sand" will put a spoke in the TTC's wheels long enough to bring the project to a halt.

RELATED STORY:

Texas toll-road policies hit a pothole 

By TONY HARTZEL / The Dallas Morning News
thartzel@dallasnews.com

March 23, 2007

AUSTIN, TX – Texas' toll-road policies hit a pothole Thursday as Senate leaders and dozens of speakers railed against the Trans-Texas Corridor and other privately operated toll roads, including State Highway 121.

"We want a do-over," said Garland resident Willa Kulhavy, who drove to Austin to protest the Trans-Texas Corridor and the state's other toll road plans.

Sen. John Carona, R-Dallas, agreed.

"I think it's fair to say that many legislators who voted for this legislation in the past would like a do-over as well," said Mr. Carona, the chairman of the Senate Transportation and Homeland Security Committee.

The hearing marked the first time that Senate leaders held a meeting solely to question past major transportation legislation, including House Bill 3588 in 2003. That bill and another piece of legislation in 2005 paved the way for the Trans-Texas Corridor, Gov. Rick Perry's $181 billion vision for hundreds of miles of new toll roads crossing the state. The first corridor project will parallel Interstate 35, and portions could be open in six years.

Thursday's committee meeting featured more than 100 registered speakers and more than 500 written comments. An overflow crowd of more than 500 forced Capitol officials to set up television feeds in three committee rooms.

The hearing sets the stage for further debate as various bills limiting the scope of toll roads move through the Legislature. However, the chances those bills will become law could be limited because the corridor has supporters in the Legislature, and because the governor probably will support the department's approach. And while the Trans-Texas Corridor still appears likely, legislators could chip away at that plan.
Roads are questioned

The growing use of toll roads revolves around the need for more revenue for road projects. Lawmakers have been reluctant to raise gasoline taxes in the past, and that has led to a large number of toll road proposals. Senators say their constituents are beginning to question the toll-road push.

"I know what my colleagues and I are hearing, and it is growing in numbers," Mr. Carona said. "The drumbeat is getting louder."

Trust between lawmakers and the Transportation Department also is wearing thin.

"It's human nature. People have been led to believe there is some other agenda," Mr. Carona told transportation commissioners.

The daylong hearing also elicited rounds of applause for auditors and a smattering of boos for transportation commissioners. The state auditor's office drew applause after its presentation questioned the Texas Department of Transportation's accounting methods.

Auditors found $29 million budgeted for legal fees associated with the Trans-Texas Corridor. They also found that some of the Transportation Department's payments for expenses originally billed as Trans-Texas Corridor engineering costs should have been coded as spending on public relations efforts.

"To the extent anyone working for me has made a mistake in coding an invoice, it will be corrected," said Transportation Commission Chairman Ric Williamson.

The state needs up to $86 billion to meet its upcoming road-building needs, and the only real option the Transportation Department has is toll roads, Mr. Williamson said.

"There was no way, short of inviting the private sector into our world, that we were going to be able to bridge that $86 billion gap," he said.
Taking back control

Elected leaders from Hill County, Montgomery County, Cooke County, Wharton County and many other areas spoke against the toll road plans, with some urging lawmakers to wrest control of transportation policy back from the state Transportation Department.

"We've given too much away to the [Texas Transportation] Commission," said former Hillsboro Mayor Will Lowrance, chairman of the Hill County Historical Commission. "Please take charge of transportation in the state of Texas, and people will be behind you."

Members of the committee, which also includes Sens. Kim Brimer, R-Fort Worth, and Florence Shapiro, R-Plano, discussed this week's approval of a multibillion-dollar deal to turn over the State Highway 121 project to a private builder and operator for the next 50 years. Of particular concern to those lawmakers was wording of the Highway 121 deal to allow toll rates to rise automatically every two years.

Some estimates show that toll rates could rise from 14.5 cents per mile in 2010 to 70 cents per mile or more by the end of the deal in 2057. A trip on the 24-mile toll road would cost about $3 in 2010, and could rise to about $15 in 2057.

Such deals have led lawmakers to file bills that would halt any more toll road deals with private groups. While politically popular, such a move could harm Tarrant County, which is working on two major projects that could open in a few years.

"We can't wait. We need it done," said North Richland Hills Mayor Oscar Trevino.

TRANSPORTATION BILLS

House Bill 857 – Repeals authority for the establishment of the Trans-Texas Corridor

House Bill 962 and Senate Bill 165 – Provides for annual increases to the state gas tax based on inflation

House Bill 998 – Prohibits creation of any new Texas Department of Transportation toll roads until 2009

Senate Bill 275 – Limits the time a private group can collect tolls on a state highway to 30 years

Senate Bill 386 – Requires that tolls on state roads be set at a rate no higher than needed to cover costs and meet financial reserve requirements

RELATED STORY:

Toll hearing focused on private turnpike deals - Senator calls for moratorium on 50-year tollway leases.

By Ben Wear, Laylan Copelin
AMERICAN-STATESMAN STAFF
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; 512-445-3698

lcopelin@statesman.com; 512-445-3617