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Follow TURFTestimony by TURF Founder, Terri Hall, before the Senate Transportation and Homeland Security Committee Addressing MPOs, August 12, 2008
Chairman Carona, Senators, thank you for having public testimony on this vital issue effecting transportation decision-making in the state, MPOs. The citizens have found by and large that MPOs are rife with many of the same problems we’ve experienced with TxDOT. MPOs are tone-deaf to the public and do not represent the will of the taxpayers anymore than TxDOT does, regardless of the elected officials that sit on those boards.The process by which this shift to toll financing for nearly every road project is flawed to begin with. The public has been shut out from DAY ONE and has never been given ANY meaningful input as to whether Texans even want to be charged both gas taxes and tolls to get to work or have any chance at mobility.
We don’t want or need any more organizations that give political cover to TxDOT (and frankly to the Governor and Legislature) that allows TxDOT to check the public involvement box and ignore the overwhelming opposition to tolling existing right of way and proceed as planned anyway. I’ve personally witnessed it in the NEPA public hearing process and there is no meaningful public input to date.
There is no provision that allows the public to veto a project or influence how its financed. There are already 2 lawsuits pending against the MPOs in this state due their flawed decision-making processes. MPOs are not a reflection of the will of the people. When hundreds of citizens have turned out to ask MPO Boards to nix toll plans (by a 2 to 1 or even 3 to 1 margin against), they consistently vote to toll anyway. What is the point of “public involvement” if the public’s input is consistently ignored? The only redress is to unseat at least half the MPO Board in the next election only to again have it stacked with pro-corridor, pro-toll, pro-privatization appointees. The citizens never know who will be appointed to the MPO, and therefore have no way to truly impact the MPO even at the ballot box. If a board member votes with the people, they promptly get removed from the Board and replaced with one who will vote pro-toll. Ask former Chairwoman Andrade, she facilitated that retribution in Bexar County.
THE FAIR AND EQUITABLE SOLUTION
Ordinary citizens and taxpayers have been alienated from the process of transportation decision-making at EVERY level. The citizens have a right to self-determination in a Republic and we deserve the right to bring this to a public vote or have some other means of having citizen input heeded perhaps through the NEPA process, rather than continue the TxDOT & MPO charade of “citizen involvement.”
Let’s remind ourselves what TxDOT thinks of as citizen involvement…it’s them breaking the law to hire a lobbyist to lobby elected officials and hire marketing firms and political consultants to write and coordinate their speeches, public appearances and press statements in order to spout the glowing benefits of the tolling to taxpayers in Town Hall meetings to convince an angry public that they really do want toll roads.
Texans are smart enough to know if we truly need this new infrastructure, how they want it financed, and what the preferred route and solution ought to be. It’s not just the top-down approach that’s upsetting people, it’s the lack of any meaningful input into the decisions being made at EVERY level of the process. It’s abundantly obvious that the decision has already been made for us. That’s what people are objecting to.
I do hope our message is clearly communicated and HEEDED in your recommendations to the Legislature.
Testimony by TURF Founder, Terri Hall, before the Legislative Study Committee on Private Participation in Toll Roads, August 12, 2008
The invited testimony before this CDA Study Committee has been noticeably stacked in favor of CDAs or PPPs, despite the overwhelming public opposition to privatizing our public infrastructure. Rather than heed the public’s concern, you have instead chosen to try and tweak PPPs in order to make them more palatable to an angry public rather than truly study what you were charged with studying: the EFFECTS of PPPs on the traveling public. This committee operated form the assumption that PPPs would continue from day one, rather than deliberate whether we should be engaging in any more of these types of contracts and whether this type of contract is in the public’ best interest.
We feel strongly that you should take a few steps back and study whether or not the government should even be in the business of making a profit and whether or not massive leveraged debt in this lending is the right approach. This committee also ought to study whether we should continue such a heavy reliance on tolling considering the sustained volatility of the price of gas. Considering both Houston and Dallas toll roads have experienced a decline in toll road usage and that there has been an overall decline in driving due to high gas prices, will 87+ toll projects be toll viable in 5 or 10 years given these conditions. Will the taxpayers be stuck with even higher toll prices because of lower ridership or worse be stuck bailing out a toll road in default?
Increasing the cost of transportation, particularly with a market-based toll rate and/or a PPP which is the most expensive transportation tax, is not only unwise, it’s a recipe for economic disaster.
Gas prices have caused a dip in toll road usage (per articles in Express-News and Landline Magazine) and caused marked drops in driving in general. The bond debt for these toll projects is very likely to default under these conditions, which most leading energy analysts agree will continue for the foreseeable future.
Where is the consideration of the taxpayer in all of this? Short of some brief comments by Senator Tommy Williams and Rep. Wayne Smith, the taxpayers pocketbooks and their ability to pay these new taxes hasn’t even been on the radar. Where was the invited testimony from leading experts about high gas prices and the dwindling availability of oil and its effect on driving and the subsequent increase in usage of other modes of transportation? These issues have an enormous impact on the sustainability of 87+ leveraged toll projects. The Transportation Summit put on by Dean International had a speaker on this subject, and this area is being investigated by Congress, yet the Committee didn’t see fit include such an elephant in the room in its decision of whether or not to recommend the most expensive transportation funding option….PPP toll roads?
Several witnessed testified that most toll roads aren’t self-sustaining. Why are we building toll projects that can’t sustain themselves and need massive taxpayer subsidies? Raiding other public funds to piece these projects together does the exact same thing the gas tax does, takes from some to give to others. How is this process better or more efficient for the taxpayer? It’s not, it just allows an unaccountable government revenue stream.
Testimony in answer to Senator Robert Nichols’ question concluded not a single PPP currently on the books anywhere in the U.S. could be used as an ideal model or exemplary PPP deal. The taxpayers can’t afford any more untested experiments when the risks and costs to the pubic are so high. We’re not guinea pigs for the financial markets and road builders to “try out” their “innovative financing” schemes. We’ve studied these deals for many years now and we’ve been reaching to find one that served the public well. So far, one doesn’t exist. To continue such risky schemes and to ignore the obvious warning signs to the tune of billions of dollars is totally unacceptable.
Dennis Enright testified that CDAs cost 50% more, that there is no risk transfer, and these projects should always stay in the public sector. None of these areas make PPPs palatable to the taxpaying public. We keep hearing PPPs and tolling are just a tool in the “toolbox” and that “one size doesn’t fit all,” but due to TxDOT’s Minute Order passed December 18, 2003 mandating all new capacity be studied for tolling, it’s become the only tool in the toolbox unless you remove it.
The GAO recently cautioned that public protection must be put in place when using PPPs and indicated PPPs aren’t right for every project. SB 792 took the first step toward primacy, but the fundamental assumption that everything that can be tolled will be tolled (including subsidizing projects that aren’t 100% self-sustaining) must be removed. Senator Nichols’ Primacy Determination model needs to take a few steps back to change the assumption that everything will be a toll project of one kind or another, to one where the priority is to improve freeways and keep them freeways, resorting to tolling dead last.
To ignore the economic warning signs and bury our heads in the sand and continue down the path of models that require sustained increases in driving and affordable gas, is to foolishly invite economic disaster and would be a complete failure of the Legislature’s fiduciary duty to the public it swears an oath to protect and serve.
Testimony by TURF Founder, Terri Hall, before the House Appropriations Transportation Subcommittee on Transportation Financing Options, August 13, 2008
Thank you for studying the vital issue of transportation. There are many considerations before this committee that will impact the taxpayers’ everyday lives. The shift to privatizing and even maximizing profit (even on public toll roads) should cause every public servant to pause.While some are trying to “fix” PPPs to make them more palatable to an angry public already suffering under high gas prices, we need to take a step back and look at whether this shift to reliance on tolling to fund new road construction is prudent, protects the public interest, and is sound fiscal policy that best serves the public interest. We submit that tolling satisfies none of those areas.
While we’re not opposed to all tolling, the tolling of existing right of way, market-based tolls, and privatization smack of runaway taxation and both government and private profiteering exploiting what amounts to government-sanctioned monopolies, our public highways. The toll-first Minute Order #109519 passed by the Transportation Commission on December 18, 2003 demonstrates tolling isn’t just a “tool in the toolbox,” it’s the only tool they’ll continue to use in order to fill their coffers. Through the prolific use of tolling, TxDOT has become a defacto taxing entity with no accountability to the traveling public who depends on these highways for their daily living.
We’d like to bring some things to your attention that we feel are vital to setting transportation on the right course.
TOLL ROAD USAGE, DRIVING DOWN
First, we cannot bury our heads in the sand and ignore the warning signs around us. In a San Antonio Express-News article July 29 and a Landline Magazine article from August 1, it states that toll road usage is down in both Dallas and Houston, largely due to high gas prices. The FHWA also reports that driving is going down causing gas tax revenues to also drop.
One can see there is an inverse relationship between a drop in driving and the escalating price of gasoline. So any transportation policy that substantially increases the cost of transportation will not only wreak havoc on the economy and leave less money for taxpayers to cover other necessities, it’ll actually reduce tax revenues, particularly toll road usage, necessitating increases in toll rates or causing the massive leveraged debt used to build these facilities to go into default leaving the taxpayers to bailout a HUGE mess not unlike the mortgage and banking crisis we’re seeing now.
INDIRECT EFFECTS OF TOLL ROADS
We must also consider indirect effects and the unintended consequences of toll proliferation like traffic diversion to surface streets which will increase wear on county and city roads, not meant to handle such traffic loads. In a study called the Empirical Evidence of Toll Road Traffic Diversion by Peter Swan of Penn State and Michael Belzer of Wayne State, released January 14, 2008, Swan and Belzer noted that efforts to "monetize" existing toll roads is a recipe for the level of higher toll rates that increase truck diversion.
A summary of the findings published in the Newspaper.com (January 14, 2008) states:
The researchers analyzed decades of data from the Ohio Turnpike and nearby alternate routes in Ohio, comparing both to national data to determine the effects the toll rates had on nearby free roads. Ohio raised toll rates in the 1990s and subsequently lowered them, allowing an easier calculation of the effect of different rate levels. The study showed that as the Turnpike toll increased, truck traffic increased on alternate, free routes as truckers balanced the monetary savings with the cost of the extra time needed to take an indirect route.
Swan and Belzer's economic modeling showed that the Turnpike could maximize its revenue by setting a truck toll rate of 46 cents per mile and collecting $111 from each truck driving the length of the Turnpike. At this high rate, however, the number of trucks avoiding the toll road would quadruple and place 608 million vehicle miles of added traffic and wear on secondary roads.
The study did not directly examine accident rates but the results suggested that imposing tolls on divided highways would increase the number of road fatalities by pushing truck traffic onto roads not designed to handle heavy truck traffic.
"Because we know that secondary roads pose greater safety hazards, the safety cost of diversion will be substantial," the study explained. "We know enough about the frequency and severity of crashes based on highway type to suggest that a substantial increase in crashes, crash severity, and fatalities in the state of Ohio probably would occur as a result of this diversion."
Interestingly, 46 cents a mile is the exact truck toll rate set by the Alamo RMA in the 281 toll project. In a TURF lawsuit to stop that toll project due to an insufficient environmental study of the impacts of that toll road on existing residents and businesses, no economic impact was conducted nor any study of the indirect effects of the toll road on surface streets and neighborhoods due to diversion.
DELIBERATE SUPPRESSION OF POTENTIAL NEGATIVE IMPACTS HIDDEN
Also found through litigation to stop the 281 toll road, TURF attorneys discovered a key study by a geologist TxDOT hired was deliberately hidden from the FHWA during the environmental review process. The report speaks of potentially “severe” impacts from the toll road on the Edwards Aquifer. Obviously this information could have changed the outcome of the FHWA’s environmental clearance (“Finding of No Significant Impact” or FONSI) for the 281 toll project had it been submitted with the environmental assessment. TURF’s attorneys also uncovered correspondence that shows management at TxDOT tried to pre-determine a FONSI on both 281 and 1604.
Such deliberate deception by a state agency cannot be tolerated, not to mention it violates the National Environmental Policy Act (NEPA). The public trust can only be restored by direct punishment (employee terminations) for such violations and through strong legislative oversight.
PUBLIC PROTECTIONS PARAMOUNT
The GAO recently released a report to Congress in February 2008 citing concerns about needing more rigorous up front analysis of PPPs to ensure pubic protections are put in place. Senator Robert Nichols released a draft of a decision tree of sorts called a “Primacy Determination” that suggests a process by which any decision to toll would go through to determine if a PPP was the right type of method for a given project. We think this sort of process must be in place to ensure the public interest is protected. However, it assumes most if not all projects will be toll projects.
We submit that this decision-making draft ought to take one step back, and that is, to have a process by which TxDOT and the MPOs must go through to keep our freeways toll-free FIRST. Tolling should be the last option considered (PPPs, if not completely eliminated, the last on the tolling option list), especially considering high gas prices and tighter, more expensive lending conditions.
HIGH COST OF BORROWING
Even if a public toll authority does the project, a Bloomberg article, Not Even 2% Fed Funds Help Munis Amid Record Rates, from just days ago, August 7, 2008, shows that even municipal bonds and other government financial instruments are experiencing higher lending rates.
Two experts didn’t parse words:
``The world is falling apart'' for borrowers, said Robert Doty, the president of American Governmental Financial Services, an advisory firm in Sacramento.
``The unwinding of the credit bubble has had dramatic implications,'' George Friedlander, a municipal strategist at Citigroup Inc. in New York who has covered the market for more than 30 years, said in an Aug. 1 report.
Government and certainly the Appropriations Committee cannot ignore its fiduciary duty to the public by looking the other way and ignoring the warning signs.
OVERSIGHT AUTHORITY MUST HAVE TEETH
Another area the Legislature needs to consider addressing in statute is giving the State Auditor the authority to force a tolling entity (whether public or private) to redo their traffic and revenue studies if the methodology or study is insufficient in any area. For instance, the State Auditor asked the Alamo RMA to redo its traffic and revenue study to take into account high gas prices, which is an obvious factor tolling authorities must consider in whether a toll road will be viable long-term. These agencies are doing inadequate studies to ram their agendas through. An article in the Express-News about this recommendation from the Auditor, emphasizes that the Auditor cannot force the RMA to re-do anything, that SB 792 only has the Auditor review their methodology. The Auditor should have the ability to force a tolling entity or TxDOT to redo an inadequate study that could potentially put these public roads in default at the taxpayers' expense.
MPO TONE DEAF TO PUBLIC
Also, MPOs can be just as tone-deaf to the public as TxDOT. Certainly RMAs and unelected toll authorities fit into this category as well. The public by and large has been left out of transportation decision-making at EVERY level. There is no provision that allows the public to veto a project or influence how its financed. There are already 2 lawsuits pending against the MPOs in this state due their flawed decision-making processes. MPOs are not a reflection of the will of the people.
When hundreds of citizens have turned out to ask MPO Boards to nix toll plans (by a 2 to 1 or even 10 to 1 margin against), they consistently vote to toll anyway. What is the point of “public involvement” if the public’s input is consistently ignored? The only redress is to unseat at least half the MPO Board in the next election only to, again, have it stacked with pro-corridor, pro-toll, pro-privatization appointees. The citizens never know who will be appointed to the MPO, and therefore have no way to truly impact the MPO even at the ballot box. If a board member votes with the people, they promptly get removed from the Board and replaced with one who will vote pro-toll. Ask former Chairwoman Andrade, she facilitated that retribution in Bexar County.
THE FAIR AND EQUITABLE SOLUTION
The taxpayers have a right to self-determination in a Republic and we deserve the right to bring this to a public vote or have some other means of having citizen input heeded, perhaps through the NEPA process, rather than continue the TxDOT & MPO charade of “citizen involvement.” We need some public involvement REQUIREMENTS that FORCE TxDOT to implement the alternative chosen by the public, not the one that makes the State the most tax revenue.
LOBBYING FOR TOLLS/PPPs
Let’s remind ourselves what TxDOT thinks of as citizen involvement…it’s them breaking the law to hire a lobbyist to lobby elected officials and hire marketing firms and political consultants to write and coordinate their speeches, public appearances and press statements in order to spout the glowing benefits of the tolling to taxpayers in Town Hall meetings to convince an angry public that they really do want toll roads.
We provided the Sunset Commission as well as the Chairwoman Harper-Brown’s office with in-depth documentation of TxDOT’s illegal lobbying activities. The Texas Government Code Chapter 556 states that TxDOT is subject to a reduction in appropriations per 556.005
(c) A state agency that violates Subsection (a) is subject
to a reduction of amounts appropriated for administration by the
General Appropriations Act for the biennium following the biennium
in which the violation occurs in an amount not to exceed $100,000
for each violation.
DETERMINE TRUE NEEDS, COMPARE FREEWAY FIX TO TOLLWAYS
We need to end the toll road wish lists (MPO TMMP plans that even the Governor admitted were based on an if-money-were-no-object principle) and get a true side-by-side, apples to apples comparison of the cost of fixing our roads and keeping them freeways versus the cost of turning them into tollways. If it's anything like the US 281 project in Bexar County, TxDOT/ARMA has turned a $100 million gas tax funded FREEway plan into a $1.3 billion toll project. This side-by-side comparison will help Legislators and the public discern our true "unfunded needs,” since we cannot rely on TxDOT's "funding gap" figures to be accurate. Then and only then can we accurately assess funding our roads in the least invasive, most affordable, and most transparent fashion.
Thank you for allowing us testify to the citizens’ concerns and we trust their voices will be heard and heeded as we seek to restore trust in the transportation decision-making process across the state and to put the citizens back in the driver’s seat.