Dig Deeper Texas

Long article in the Texas Observer worth reading. Some highlights follow.

I’m sure this is standard practice in the private sector. After, all we’re going with toll roads to take advantage of the efficiencies of the private sector, right?

The Highwaymen by Eileen Welsome - The Texas Observer

Yet even the chairman is perplexed by some details of the new public-private partnerships being forged to build thousands of miles of roads quickly. During a break in a recent commission meeting, Williamson shook his head in befuddlement when asked why the state has begun paying millions of dollars in “stipends” to companies because they weren’t picked to build some of the toll roads.The notion of paying the losers, Williamson agreed, is “nutty as a fruitcake.” But the department is bound by law to do it, he said, a law Williamson suggested might be a holdover from the era of big government.

Actually, million-dollar parting gifts for the losers is a more recent Texas custom, courtesy of the huge 2003 transportation bill sponsored by Mike Krusee, a Republican state representative from Round Rock and chairman of the House Transportation Committee.

Already, TXDOT has paid roughly $4.3 million to companies whose proposals to spearhead two different road projects were rejected, according to documents obtained by The Texas Observer under the state’s Public Records Act. As much as $10 million more will be doled out in the coming months.

Don’t you just love it. Blame it on the “big government” Democrats when it didn’t even start until 2003.

This is just mind-boggling.

The Highwaymen by Eileen Welsome - The Texas Observer

It’s all part of a global effort by investment banking firms and multinational companies to convert public infrastructure—roads, bridges, tunnels, airports—into private, moneymaking ventures. “Hundreds of billions of dollars are moving around world markets looking for long-term investments,” D.J. Gribbin, a division director of Macquarie Holdings, recently told congressmen on Capitol Hill. Gribbin, whose company is part of the Australian-based Macquarie Bank, likened infrastructure in the United States to the “dead capital” created by Third World squatters who build homes on property they don’t own. Without clear title, the squatters can’t borrow against their homes or sell them. Thus the investment is “dead capital,” he explained. “Highway infrastructure here in the United States is analogous. Inadequate markets and legal systems in this country have locked up billions of taxpayer dollars in our transportation infrastructure,” said Gribbin, a former chief counsel of the Federal Highway Administration and former national field director for the Christian Coalition.

So is he saying that if someone other than the state owned the highways, they could be borrowing money and improving them, the tolls being the revenue they borrow against? Don’t government bonds based on certain taxes work the same way.

Later the article lists all the European countries jumping on the bandwagon. Somehow, I just don’t see all these countries going with the squatter analogy and toll roads in their own countries.

The Highwaymen by Eileen Welsome - The Texas Observer

Multinationals from Spain, Sweden, Japan, the Netherlands, and Australia have rushed to Texas to help liberate the state’s dead capital. The problem is that once freed, much of that capital won’t be staying in Texas. For the next 50, 75, or 100 years, it’ll be flowing overseas to its liberators.

Let’s see, that makes us stupid?

The Highwaymen by Eileen Welsome - The Texas Observer

For Republicans, though, the prospect of raising taxes was akin to heresy. So state officials snuck innocuous-sounding constitutional amendments onto the ballot in 2001. Proposition 2 allowed the state to issue bonds for road projects in border colonias. Proposition 15 created the Texas Mobility Fund, a bank of sorts that is funded by a stream of tax revenue and can make grants and loans, and issue bonds to finance the construction, reconstruction, acquisition, operation, and expansion of state highways, turnpikes, toll roads, toll bridges, and other mobility projects.Voters approved both amendments in a low-turnout election. Effectively, just 2 percent of the state’s population voted for the ballot measures, hardly a mandate. The Trans-Texas Corridor was never mentioned in either proposition, and the word “toll” appeared only in passing. Still, Perry and others now point to them as proof that voters have approved his administration’s behemoth road-building program.

Ah, so that was the public mandate.

The Highwaymen by Eileen Welsome - The Texas Observer

Another section of the legislation requires TXDOT to construct connections to and from the Trans-Texas Corridor. By doing so, TXDOT will help prop up a private developer’s operation, and quite possibly divert funds from free roads elsewhere that need improvement.

This will allow them to build the toll road as far away from the city as they want and still get the government to provide easy access to them.

And then there are all the little indications popping up that this may not be such a great deal after all.

The Highwaymen by Eileen Welsome - The Texas Observer

Among the greatest ironies is that the super-highways won’t really do much to reduce congestion, a fact that Chairman Williamson confirmed during a recent commission meeting while trying to allay the fears of businessmen and communities who worry they’ll become ghost towns once the new roads go through. In a question-and-answer session with Amadeo Saenz, TXDOT’s assistant director of engineering operations, he asked, “Is it also my understanding that we have a congestion relief study ongoing to determine what percentage of traffic moves off of Interstate 35 and onto the parallel?”“Yes sir,” responded Saenz.

“Is it safe to say that no less than 2.5 percent and no more than 10 percent of the traffic is going to fall somewhere in that range?” asked Williamson

“Yes, sir.”

“So for those who live in, for example, Hillsboro who believe that Interstate 35 is their economic lifeblood and the parallel might have the same impact on their city as Route 66 had on some cities in Oklahoma, we can represent to them that it appears, least-case your traffic shrinks 2.5 percent, worst case it shrinks 10 percent, and in no circumstance should that be enough to markedly impact your local economy?”

“That’s correct,” Saenz responded.

There are already reports of trucking companies that have a policy not to use toll roads. And then there is the report by the Governor’s Business Council that suggests Texas may not need tolls to support transportation construction.

Toll roads may be the solution to some of Texas’ highway problems. But any solution deserves to be debated in the public forum rather than offices of private investors.

Technorati Tags: The Texas Observer, Eileen Welsome, Trans Texas Corridor, Ric Williamson, Rick Perry, Texas Department of Transportation, TX DOT, toll roads, Mike Krusee, Karen Felthauser, HB 3588, TXDOT , Cintra, Macquarie, Amadeo Saenz, Texas Mobility Fund, Dead Capital

Filed under: Cintra, Dead captial, Eileen Welsome, Macquarie, Mike Krusee, Ric Williamson, Rick Perry, Texas Department of Transportation, Texas Mobility Fund, Texas Observer, Toll Roads, Trans-Texas Corridor, Uncategorized, texas