The Bush Administration doesn’t like the toll moratorium legislation winding its way through our legislature.
Recently, reports surfaced about a warning Federal Highway Administration acting administrator James D. Ray gave to the Texas Department of Transportation about the possibility that the Department might lose federal funds if the proposed toll moratorium is enacted. “In at least some of the bills,” Ray said in the letter, “there are a number of provisions that concern us from both a legal and transportation policy perspective. If signed into law, some of these proposals could affect the State’s eligibility for receiving Federal-aid highway funds.”
The referenced legislation, HB 1892, HB 2772, SB 1267 and SB 1929, bear one common trait: a two-year moratorium on new public private partnerships (PPPs) to raise funds to build toll roads in most of the state. The highway system’s biggest users, truckers will tell you that the Bush Administration is counting on PPPs to make up for drastic reductions in federal highway spending.
The Bush Administration’s $67 billion funding request for transportation in the 2007-08 budget disappointed the trucking industry. Immediately after the President’s budget was released in February, trade magazine Land Lines saw the paltry $40.3 billon in highway funding and reported “Not everyone was surprised when the president’s announced transportation budget funding request fell short of funding needs.”
But, the shortfall didn’t catch OOIDA (Owner Operator Independent Drivers Association) by surprise. Mike Joyce of the Association’s Washington, DC, office went on the record with “Land Line Now” on Friday, Feb. 2, saying that not only a budget shortfall was anticipated, but the now-public shortfall is more than likely kicking the door wide open for public-private partnerships.
The U.S. Department of Transportation has had public-private partnerships on its agenda for quite some time, even recently providing model legislation for states seeking to privatize their highways and toll roads.
The recent veto-proof toll moratoriums run in direct opposition to USDOT’s “model legislation.” No one should be surprised, then, that the Federal Highway Administration reacted sharply to this challenge:
Texas is considered the nation’s leader in developing new transportation facilities through public private partnerships (PPPs). These partnerships create opportunities for innovation not typically available for government only projects. The use of PPPs allows the State to leverage the limited state and Federal resources to better serve the people of Texas.”
Public sentiment has officially swung from curiosity to anxiety. Once hailed as free money by cash-starved governments, the Texas Legislature’s rebuke of PPPs is a sign that voters find these schemes too good to be true. BusinessWeek reporter Emily Thornton’s cover story, “Roads to Riches,” explores the booming PPP trend nationally:
With state and local leaders scrambling for cash to solve short-term fiscal problems, the conditions are ripe for an unprecedented burst of buying and selling. All told, some $100 billion worth of public property could change hands in the next two years, up from less than $7 billion over the past two years….
The governements’ poor financial condition is rooted in most politicians’ two-pronged reelection strategy: oppose raising revenues through taxation, and earn media attention cutting ribbons on new infrastructure projects. PPPs keep ineffectual leaders in office at a price that won’t be fully accounted in our lifetimes.
Corridors of the Future Program
CorridorWatch.org co-founder David Stall helped bring Ray’s letter to light and said that it came at State Rep. Mike Krusee’s request. A measure of how far Krusee’s stature has fallen in the Texas House of Representatives was the lopsided defeats with which members dispatched his numerous amendments to the House moratorium bills.
WorldNet Daily reporter Jerome R. Corsi said of Krusee “He was re-elected with barely 50 percent of the vote in a campaign in which his TTC support was contested.”
After Krusee’s narrow re-election and subsequent loss of clout in Austin, he has apparently been working his Washington DC contacts and burnishing his lobbyist resume. Last year, Krusee shepherded Wilbur Smith Associates’ application for a cross-country toll road along Interstate Highway 10’s right of way through the United States Department of Transportation’s “Corridors of the Future” Program (CFP).
The CFP is the corporate plum at the heart of Bush’s transportation policy. The official announcement of the program in the Federal Register spells out pretty clearly the PPP mandate (emphasis added):
The goal of the CFP is to accelerate the development of multi-State transportation Corridors of the Future for one or more transportation modes, by selecting up to 5 major transportation corridors in need of investment for the purpose of reducing congestion…. States are encouraged to work together and with private sector partners to develop multi-State corridor proposals to advance project development and seek alternative financial opportunities.
Krusee and Wilbur Smith and Associates heard the clarion call and submitted an application to line I-10 from Florida to California with toll booths. The relationship between Wilbur Smith and Krusee certainly extends back as far as CAMPO meetings in which the Florida engineering firm was awarded contracts for Central Texas Turnpike Authority projects TX-45 and TX-130. Should the I-10 proposal be enacted, Wilbur Smith would certainly be awarded sizeable contracts.
On February 1, Secretary of Transportation Mary E. Peters annnounced that the I-10 proposal was among the eight semi-finalists. This summer, the Administration will announce its five finalists, projects the federal government aims to drive to completion.
More evidence of Krusee’s matriculation into the DC movers and shakers set came on March 19, when Secretary Peters appointed him to the National Surface Transportation Infrastructure Financing Commission, a “blue ribbon” committee that will write a report about how PPPs will bring a future filled with “free” infrastructure.
Still further evidence of Krusee’s ever-increasing favor with the Bush administration came two months ago when he was invited to speak at the White House:
The Administration continued its efforts to communicate its message at a high-level, invitation-only “White House Transportation Legislative Leadership Summit” on February 9. Held in the ornate Indian Treaty Room of the Old Executive Offices Building, the conference featured a group of distinguished speakers testifying about creative new approaches adopted in their jurisdictions to solve fiscal and congestion problems. Invited to the Summit were chairmen and ranking members of all state legislative transportation committees. A total of 52 state lawmakers attended the Summit, including chairmen and ranking members of house and senate committees from 28 states.
Conference speakers included … Mike Krusee, chairman of the House Transportation Committee in the Texas legislature and author of the landmark legislation that made toll revenues and public-private partnerships the foundation of the state’s transportation financing policy….
The Administration’s intent behind this initiative is clear. Facing the end of its term of office in less than two years, it wishes to leave behind a permanent legacy of the concepts, ideas and new strategies which it believes offer promising solutions to the transportation problems facing the nation.
The permanent legacy of the Bush Administration: a bankrupt treasury and taxes replaced by tolls, fines, fees and tuition payable to a private corporation completely unbeholden to the electorate.
CorridorWatch.org, of course, had the agenda:
From 11:50 a.m.-12:50 a.m. the topic of public-private partnerships will be discussed by Texas State Rep. Mike Krusee; James Smith, managing director at Merrill Lynch; Murray Bleach, Macquarie Infrastructure Group; and HNTB Senior Vice President Jack Finn.
Krusee is determined to steamroll the Trans Texas Corridor forward, over the veto-proof majority of our electeds who are quite aware of its unpopularity with the voters. If the allegation that he has called in a favor in Washington, inviting federal interference into what is strictly a state matter, turns out to be true; there is no doubt he will lose in a landslide, assuming he will even attempt a re-election campaign or even obtain his own party’s nomination.
His movements and actions since November 2006 give the impression that he has his eyes set toward a different kind of public private partnership — that of a lobbyist.