06.15.07

The “New Way Forward” On Tolls

Posted in 80th Legislature, Privatization, Road Issues at 11:14 am by wcnews

“The message we got was toll roads are OK, but we don’t want privately owned roads.”
-Ric Williamson, chairman of the Texas Transportation Commission, which approved the projects.

It’s obvious from that statement that TxDOT/Gov. Perry’s plan to toll every new road will continue. With yesterday’s TxDOT approval of tolling more than 80 new road projects in Texas we have not come face-to-face with how SB 792 has been interpreted by the pro-corporate tollers.

The reason every road must be tolled is because TxDOT has no money, at this time, to build roads any other way. The reason they have no money is because the legislature has not raised the gas tax since 1992, that’s 15 years. It’s no coincidence, by the way, that the last time it was raised, was the last time Texas had a Democratic governor.

(Please click on “Read the rest of this entry” for much more on this topic and to find out what the new catch-phrase in tolling is).

We have no money therefore we have to toll every new road project in Texas. But now that the “so-called” moratorium has passed we have to give local authorities first right of refusal. But, before the local authority is allowed to proceed a study will be commissioned, by a “third party” consultant of course, that will deem the project too risky. Risk will become the new “catch-phrase” and excuse for corporate toll roads in Texas.

Under these projects, local officials would get the first crack at development before the state steps in. And even if privately financed, the government would own and operate the roads and collect the tolls.

But with that comes the added risk to taxpayers that if the tolls don’t produce the revenue they were expected, they get stuck with the loss.

This is exactly what is happening in North Texas with SH 121, Report: Privately built toll road less risky.

Building Texas 121 in Denton and Collin counties as a privately funded toll road would be less risky, and in most scenarios a better financial deal, than assigning the task to the public North Texas Tollway Authority, concluded an independent report unveiled Thursday.

A little history. This SH 121 deal with Cintra/JPMorgan was announced just before Sen. Carona’s hearing in March. It wasn’t until after that deal was announced, during the hearing, the NTTA stated they could “top the Cintra deal” and it became an issue. It’s even been rumored that the NTTA was pressured not to bid on the porject. Got to love State Rep. Jim Jackson’s (R-Carrollton) response, “It’s not having that pressure that’s the problem. It’s giving into the pressure….but that’s water under the bridge.” Because of this revelation a study was commissioned and a third party PriceWaterhouse Coopers has now come back and said, surprise, the Cintra/JPMorgan deal is actually better, and this deal is too risky – drivers might not show up in the numbers predicted – therefore it would be better to let the corporation assume that risk.

The tollway authority deal would be financially better only if the road far exceeded traffic projections, Pricewaterhouse consultant Arthur Baines said, so one key to the decision is whether the council wants to gamble on that possibility.Cintra stands to profit — $700 million by one estimate — but is a less risky partner, [Pricewaterhouse consultant Arthur] Baines said. If the project busts its budget or fails to draw motorists, Cintra’s investors would be responsible for the debt, not Texas commuters. The proposal calls for Cintra to pay its debt to the Metroplex before any other claim.

“If the project comes off the hinges, you’re insulated,” Baines said.

We know from the Denver Post series, which exposed the regular over-inflation of traffic and revenue (T&R) studies, that this project will, more than likely “come off the hinges”. No matter who “owns” it at that time the tolls will go up. Whether it’s to pay off the local entities bond debt or to insure shareholder wealth.

So the new way forward appears to be this:

• Propose a new road project
• Give the local entity first refusal
• Commission a study
• Declare it too risky for a local authority to take on
• Turn project over to the state/TxDOT
• TxDOT will cut a deal with a corporation to build the road

I feel so much better now that we have a toll road moratorium in place. The question is, will local officials, like the ones on the Regional Transportation Council in North Texas, be willing to assume the risk of a toll road project with a shaky T&R study. If they’re thinking of a political future, probably not. These comments probably don’t instill confidence in the NTTA:

Despite the two recommendations in favor of Cintra, the five-hour onslaught of dollar figures and traffic forecasts left several members of the Regional Transportation Council unconvinced.

“It is a little murkier than I thought,” said John Murphy, a Richardson City Council member. “I thought that one would come out clearly the winner, and obviously, that hasn’t happened.”

Even though both the Transportation Department and Price Waterhouse studies favored Cintra, Mr. Murphy said members could find numbers in each analysis to justify a vote for either proposal.

“I’m probably going to spend the weekend holed up with all these numbers,” he said. “I don’t have a clear position at this point. I think anybody in here that already has their mind made up, if they sift through this, they could actually change in one direction or the other.”

Others said they want the independent analysts to reconfigure their estimates based on higher traffic projections for fast-growing Collin and Denton counties.

“I really think they need to look at those traffic counts,” said Becky Miller, mayor of Carrollton. “I can never see those traffic counts going down – I can only see them going up.”

Regardless of who wins, council members said they face an enviable dilemma of choosing between high-profile bidders willing to fork over billions for the right to build the road.

“We truly have a great position,” said Charles Emery, chairman of the Denton County Transportation Authority. “Now we’ve just got to massage the final numbers and see where that falls out.”

The larger point in all of this is that that toll roads are a horrible way to finance the building of ALL our roads in Texas. Lest we forget the TTI report of November 2006 that informed us that raising and indexing the gas tax would pay for most if not all of these road projects. It’s always interesting that Ric Williamson and Gov. Perry will always talk about the lack of money, tolls, and toll boxes, etc.., but never mention their neglect of funding roads via raising the gas tax. They will also never mention the gas tax as one of those tools that could be used.

At times it seems like the neglect of our road financing over the last 15 years was all part of a plan to force us into tolling all our roads. It’s also curious that this all happened as the GOP in Texas really started to and completed their take over of our state’s government. As EOW has said many times there’s only one way to stop this. We must elect representatives, at all levels of government, that understand that a gas tax is a much better and fairer way to fund our new road projects in Texas rather than tolling. If and until then it’s clear that TxDOT and Gov. Perry, and most of our current elected representatives, see tolling as the ONLY option for building new roads in Texas. Therefore the new way forward is very similar, if not exactly the same, as what we had before the so-called moratorium was passed.

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