Transportation point man in the legislature, Sen. John Carona, passed SB 1350 out of the Senate today. It will create the Texas Transportation Revolving Fund (TTRF), essentially a Transportation “bank”, as Patricia Kilday Hart calls it.
While the lege setting up a transportation bank is scary enough, there are a couple of other problems with this legislation. First from the fiscal note we find out who will be responsible for administering the fund.
The bill would amend the Transportation Code to create the Texas Transportation Revolving Fund to be held in the Texas Treasury Safekeeping Trust Company and to be administered by the Texas Transportation Commission (TTC) through the Texas Department of Transportation (TxDOT). The bill would require TTC to file an annual report with the Governor and the presiding officer of each house of the legislature providing certain information on the operation of the fund. (Emphasis added).
Letting TxDOT run a bank is probably not the best idea, considering TxDOT’s recent problems with fiscal management. Wouldn’t be wise to have TxDOT adminisgtering a transportation bank. The other problem the type of projects this is being structured/manipulated for.
The current economic instability in equity and credit markets has made it difficult for public and private entities alike to obtain financing for needed transportation projects, especially startup toll authorities such as regional mobility authorities. Issues with municipal bond access and project financial feasibility may require some degree of state level support to ensure the project is sound from a financial and credit standpoint.
Subject to constitutional limitations, a transportation revolving fund can be used to provide loans or credit enhancement, or to serve as a reserve fund for debt financing or the cost of operation and maintenance. This would allow public and private entities, particularly local tolling authorities, to mitigate certain project financial risks which limit access to the capital markets, or to access additional financing for needed projects. (Emphasis added).
Nothing like a bill to “prop up” toll projects that may not be “sound from a financial or credit standpoint”. Instead of doing this they could just raise the gas tax and not have to worry about creating another scheme to build toll roads. The AAS has more, Transportation revolving fund approved.