The End of the Road - unmasking the SH 130 bankruptcy and financial web

Link to article here to view all the graphics and listen to audio of locals affected by the toll road.

The End of the Road
The state had great plans for the southern leg of Texas 130. An 85-mile-an-hour speed limit, no direct, up-front cost to state taxpayers, millions of dollars in toll revenue for the state. What happened?
By Katherine Blunt
San Antonio Express-news
September 16, 2016

When the Texas Department of Transportation signed a deal for the first public-private toll road in the state, it touted the partnership as a win for everybody: The San Antonio-Austin area would get a new section of highway at no upfront cost to Texas taxpayers, private developers would run the operation and profit over time, and the state would own the road and earn millions of dollars in toll revenue.

The deal allowed Cintra, a Spanish infrastructure developer, and San Antonio-based Zachry Construction Corp. to build, operate and maintain the 41-mile southern section of Texas 130 for 50 years as part of a lease agreement with TxDOT. Slicing through farmland between Seguin and Mustang Ridge, south of Austin, the road would become known for its 85-mph speed limit — the highest in the country.

“Over the 50 years, we would receive, it’s estimated, a substantial amount of revenues,” former TxDOT tolling official Phil Russell told the Texas Transportation Commission before it approved the deal in 2006. “It would be worth $245 million (in toll revenue) and a long-term funding source for operation and maintenance.”

Less than a decade later, Cintra and Zachry plan to walk away from the project and hand their bankrupt joint venture, SH 130 Concession Co., to its lenders. The company owes federal taxpayers more than a half-billion dollars and is engaged in a years-long dispute with TxDOT about maintenance and construction problems on the sparsely traveled road. And so far, it has paid the state only about $3 million in toll revenue.

Link to read the full expose' here.

Trump plan to lift ban on tolling existing interstates draws scorn

Link to article here.

Trump plan to lift ban on tolling existing interstates met with stiff opposition

By Terri Hall
February 13, 2018
Selous Foundation for Public Policy Research

The lowly taxpayer just can’t seem to cut a break. Weeks after the euphoria of passing the largest tax cut in a generation, President Donald Trump released his infrastructure proposal pushing toll roads and public private partnerships (P3s), which spells disaster for those middle class workers’ pocketbooks. The most contentious proposal being lifting the ban on tolling existing interstates.

Former U.S. Senator Kay Bailey Hutchison (R-TX) was instrumental in protecting taxpayers from double taxation by defending the ban on tolling existing interstates during her tenure, even imposing a special provision to protect Texas. Now Trump wants to provide states “flexibility to toll existing interstates.” This means the lanes you drive today toll-free could now have tolls slapped on them simply to generate revenue for big government as a new tax in the hands of unelected toll agencies or to line the pockets of private toll operators — completely out of reach of the voters.

Tolls hit $44 one way in D.C., how long before we see same in Texas?

Link to article here.

Out of control: Commuters clobbered with $44 one way in tolls

By Terri Hall
December 22, 2017

Tolls hit $44 one way to go 10 miles on Interstate 66 in Virginia. Rub your eyes and read that again. Tolls have become the new ‘drug’ of choice for politicians and bureaucrats. It’s become a legalized form of highway robbery. While elected officials try to navigate the mess they’ve made by unleashing unelected transportation bureaucrats with the unfettered power to enter into secret contracts with foreign corporations behind closed doors and giving them carte blanche access to commuters wallets with virtually no limit, it’s no wonder toll rates have reached unsustainable levels in a few short years after state lawmakers embarked on the grand toll experiment.

With little checks and balances, commuters are now locked into congestion misery or face financial hardship the likes of which have never been seen in America simply to get to work. For many, working will no longer pay the cost of getting there. It’s not just I-66, but also interstates 95, 395, and 495. Express toll lanes, often referred to as ‘managed’ lanes, are the new normal in many metropolitan areas, especially in states that jumped on board early due to the influence of Bob Poole and the Reason Foundation — like Florida, Texas, and Virginia.

Should voters promote pro-toll Burkett to senator?

Burkett wants highest possible toll taxes for constituents
By Terri Hall
November 9, 2017

With Cindy Burkett throwing her hat in the ring in an attempt to unseat grassroots conservative stalwart Senator Bob Hall, the voters of Texas Senate District 2 need to know about her record. Burkett was quick to support selling off Interstate 635 E to the highest bidder using a controversial toll contract known in Texas as a comprehensive development agreement (or CDA) that gives control of our public roads to private toll companies.

Interstate 635 toll lanes from I-35E to the Dallas North Tollway are already operated by Spain-based Cintra. Commuters in the Metroplex face paying upwards of $24/day in tolls to this foreign corporation just to get to work, and no elected official has any control over how high those toll rates can go. Burkett wants that tax burden to extend to commuters in her own district from US 75 to I-30.

GONE: Trump yanks P3s and private toll roads from plan

Link to article here.

Trump pulls the plug on private toll roads, centerpiece of infrastructure plan
By Terri Hall
Setpember 30, 2017

It’s big news for taxpayers, but for the special interests who have been pushing public private partnerships (P3s) and toll roads as the way to fund $1 trillion in upgrades to America’s infrastructure not so much. This week, President Donald Trump officially pulled the plug on P3s as the centerpiece to his infrastructure plan.

The president said simply, “They don’t work.”

Trump mentioned it in a meeting with members of the House Ways and Means Committee on Tuesday as the president met with lawmakers to discuss tax reform. Citing the failure of the Interstate-69 P3 contract done under Vice President Mike Pence when he was governor of Indiana, the state recently had to sever the contract, take over the project, and issue its own debt to get it finished.

Texans angered over SH 130 bankruptcy deal that wipes out money owed to taxpayers

Zero: Money owed taxpayers for SH 130 toll road erased by bankruptcy court
By Terri Hall
July 8, 2017

The defunct SH 130 tollway just emerged from bankruptcy court and the news isn’t good for taxpayers. In 2007, the Texas Department of Transportation (TxDOT) entered into a Comprehensive Development Agreement, or public private partnership, with SH 130 Concession Company, a subsidiary of Spain-based Cintra and Zachry Toll Road 56, which had ownership dispersed among Australian and many other foreign entities. The 41-mile southern stretch of SH 130 opened in November 2012, designed to be a bypass around congested downtown Austin. But the traffic never materialized and the private concession company sought bankruptcy protection in March 2016. According to the terms that emerged from bankruptcy court, all of the private entity’s $1.4 billion debt was wiped away, leaving federal taxpayers left holding the bag for the $430 million federally-backed Transportation Infrastructure Finance and Innovation Act (TIFIA) loan given to the private entities.

Texas taxpayers feel betrayed. Former Texas Transportation Commission Chairman Ric Williamson swore under oath before the Senate Transportation Committee on March 1, 2007, that if the private entities went bankrupt, the Texas taxpayers would get the road back free and clear of any debt. Free and clear means no debt obligations, and therefore no need to continue to charge tolls for usage. However, that didn’t happen. Instead, new owners were brought in, Strategic Value Partners, $260 million in new debt was issued, and the new private company will continue to charge tolls until the contract is up in 2062 — for a road that now owes virtually no debt compared to its original $1.4 billion.

Killing the private toll road bill made national news!

We did it!  Not only did we send a message to Texas lawmakers and special interests that the Rick Perry era of toll roads is over, we also sent a message to the Trump Administration that private toll roads are dead on arrival in Texas!

Watch the Bloomberg story on it here

HB 2861 Record Vote

FB post bootOut Phillips crew

Those who voted to hand 19 TX roads to private, foreign toll operators are:
Yeas 51 — Allen; Alonzo; Alvarado; Are´valo; Blanco; Burkett; Button; Coleman; Collier; Cortez; Elkins; Farrar; Flynn; Geren; Giddings; Gooden; Guerra; Gutierrez; Hernandez; Howard; Huberty; Israel; Johnson, E.; King, K.; King, P.; Koop; Longoria; Lucio; Martinez; Moody; Morrison; Murphy; Neave; Oliveira; Ortega; Perez; Phillips; Raymond; Rodriguez, E.; Rodriguez, J.; Rose; Sheffield; Shine; Smithee; Thompson, E.; Thompson, S.; Turner; Uresti; Villalba; Walle; Workman.

FB post taxpayer champs
Taxpayer champions who voted against are:
Nays 82 — Anderson, C.; Anderson, R.; Bailes; Bell; Biedermann; Bohac; Bonnen, D.; Bonnen, G.; Burns; Burrows; Cain; Canales; Capriglione; Clardy; Cosper; Craddick; Cyrier; Dale; Darby; Dean; Deshotel; Dukes; Dutton; Faircloth; Fallon; Frank; Frullo; Goldman; Gonzales; Gonza´lez; Hefner; Herrero; Holland; Hunter; Isaac; Kacal; Keough; King, T.; Klick; Krause; Lambert; Landgraf; Lang; Larson; Laubenberg; Leach; Lozano; Metcalf; Meyer; Miller; Mun˜oz; Murr; Neva´rez; Oliverson; Parker; Paul; Phelan; Pickett; Price; Raney; Reynolds; Rinaldi; Roberts; Romero; Schaefer; Schofield; Schubert; Shaheen; Simmons; Springer; Stephenson; Stickland; Stucky; Swanson; Thierry; Tinderholt; VanDeaver; White; Wilson; Wray; Zedler; Zerwas.


Absent, Excused — Anchia; Paddie; Wu.
Absent, Excused, Committee Meeting — Ashby; Davis, S.; Davis, Y.; Sanford.
Absent Unexcused — Bernal; Cook; Gervin-Hawkins; Guillen; Hinojosa; Johnson, J.; Kuempel; Minjarez; Vo.

Source: House Journal Recorded Vote

See press release: VICTORY: Grassroots KILL private toll bill, secure Abbott's vision for toll-free future

Trump floats gas tax hike after tolls get cold shoulder

Link to article here.

Trump floats gas tax increase after cold reception to privatized toll roads

By Terri Hall
May 5, 2017

It’s tough being a change-agent. Newly minted President Donald Trump came into office with high hopes of a major infrastructure overhaul. With the nation’s crumbling bridges, pothole stricken roads, and millions of commuters choking in urban congestion, Trump had a big plan to harness the private sector through public private partnerships (P3s) to address congestion by adding toll lanes. The problem is those privatized toll lanes grant private, usually foreign, entities monopolies over vital public highways where the companies are given the exclusive right to extract the highest possible tolls for 50-99 years.

With the pushback to P3s coming fast and furious from working class families to truckers, Trump has begun to change his tack. After meeting with members of the trucking industry this week, Trump has floated the idea of a federal gas tax increase to raise the revenue necessary for the big infrastructure fix. Truckers prefer a gas tax increase to tolls.

Here’s the back story. The National Highway Trust Fund, which is funded with a federal gasoline tax of 18.4 cents per gallon, has teetered on the edge of bankruptcy for over a decade while the gas tax has remained unchanged since 1993. Inflation has diminished its buying power over the last 24 years, and members of congress have been reluctant to raise it. Under President George W. Bush, many Republicans pushed road privatization and implementing toll ‘managed’ lanes as the means to finance road projects as perpetual road funding shortfalls plagued the highway system.

Schertz fights back against Cibolo's private toll road scheme

Link to article here. (Note: The article at this link is modified from the one below. It addresses the connection to the NAFTA superhighway network in North America)

Revolt: Sister city fights back against Cibolo private toll road

By Terri Hall
April 6, 2017

A funny thing happened on the way to handing over a public highway to a private toll operator —a sister city said an unequivocal, ‘No!’ A small suburb of San Antonio, the city of Cibolo, inked an irrevocable deal to hand an existing public highway, FM 1103, over to a private toll company so it could place express toll lanes down the middle, granting it the exclusive right to operate both the toll lanes and the existing free lanes for the next 50 years. FM 1103 runs through the city limits of Schertz before it connects to Interstate 35. But what Cibolo didn’t count on was its neighboring city not cooperating with the scheme.

Raw Deal: Private toll company weasels sweetheart deal out of Cibolo

So what’s in that controversial private toll road contract?
By Terri Hall
March 9,2017

After a controversial decision by the Cibolo City Council to give development rights for a private toll road to a corporation that's never even built a road last week, Cibolo Mayor Allen Dunn has been busy shooting the messenger. The Development Agreement, kept secret from the public prior to its approval last week, was finally made public and it verifies and validates citizen concerns. When the terms of an exclusive 50-year development agreement was negotiated in secret and handed to a single private firm in a no bid contract, it shouldn't surprise elected officials when the public is irate.

The city signed an irrevocable development agreement with, Cibolo Turnpike, an entity created by the investors of Texas Turnpike Corporation. The draft operating agreement requires the city to repay all the company's debt and the net present value of future distributions (anticipated revenues) if it wants out of the deal -- after it's built. There is no other way out for the city, however, there are lots of exit strategies for the company.

So what are some of the other red flags? First, the agreement seeks to give operational control of the non-toll portion of FM 1103, a state highway, to the private company.

Lone Star Rail survives through link to I-35 toll lanes

Link to article here.

Lone Star Rail resurrected by link to I-35 toll lane debacle

By Terri Hall
Selous Foundation for Public Policy Research
August 24, 2016

The saying that two things are inevitable — death and taxes — just got expanded to three things: death, taxes, and government boondoggles that never die. Yesterday, the day after the Alamo Area Metropolitan Planning Organization (AAMPO) unanimously rejected funding further study of the Lone Star Rail which was on the heels of the Capitol Area Metropolitan Planning Organization (CAMPO) pulling its funding, the Bexar County Commissioners Court passed a resolution to transfer the Lone Star Rail environmental study from the Lone Star Rail District to the Texas Department of Transportation (TxDOT). So now, not only will every Texan’s state gasoline taxes be paying for this rail boondoggle at the state level, the resolution also called for moving the rail corridor over to Interstate-35, despite the Texas GOP platform's plank opposing rail.

The Lone Star Rail project envisions a 77-mile commuter rail between Austin and San Antonio, and it’s been studied since the creation of the Lone Star Rail District by the Texas Legislature in 1997. Over $20 million in taxpayer funds have already been spent on studying the feasibility of the corridor, and the price tag is somewhere between $2-$3 billion (that’s a big range). Union Pacific announced in February it would not allow the rail project to utilize its tracks. The feds passed on granting the project federal funding. Then the Chair of CAMPO, Will Conley, decided enough is enough and led the charge to have the board vote to defund the project August 8, leading all to believe it was the death knell for the Lone Star Rail.

Report reveals private equity toll roads a bad deal for taxpayers

Link to article here.

Public private partnerships are one thing both liberal and conservatives can agree on - they're a BAD deal for taxpayers.

Report Examines Equity In Toll Road Deals
Policy paper from the Center for American Progress addresses misconceptions about the way toll roads are financed.
The Newspaper.com
August 12, 2016

States have increasingly turned to tolling as a solution to heir funding and infrastructure problems. Private tolling companies end up with very little skin of their own in the game when making deals to take over roads, according to a report released Wednesday by the Center for American Progress, a liberal think tank. The group reviewed the US Department of Transportation's Transportation Infrastructure Finance and Innovation Act (TIFIA) federal loan program and found that the two dozen toll road projects it financed with taxpayer dollars had an average value of $1.3 billion, but the average equity investment was just $183 million, or 14 percent.

Cintra hands SH 130 to its creditors

Link to article here.

Texas’ first foreign-owned toll road handed to its creditors

By Terri Hall
August 15, 2016
Selous Foundation for Public Policy Research

It was so predictable. The people of Texas revolted against former Governor Rick Perry’s grand network of toll roads, once dubbed the Trans Texas Corridor, and many grassroots groups that sprung up to oppose it predicted its eventual demise. The press, always eager to jump on the ribbon cuttings, seldom show you the angling inside bankruptcy court, yet that’s where State Highway 130 Concession Company ended up. As part of its Chapter 11 bankruptcy, Spain-based Cintra and San Antonio-based Zachry ceded the delinquent toll project to its creditors Friday.

The southern 41-mile stretch of SH 130, a bypass designed to avoid Austin traffic from Mustang Ridge to Seguin, opened with much fanfare in November of 2012, including an appearance by Perry who hailed this first public private partnership (or P3) as highway nirvana and ‘visionary.’ But crony capitalism is as old as dirt and taxpayers didn’t see it as anything other than graft.

Cintra's SH 130 toll road goes bankrupt

Link to article here.

Texas’ first public-private toll road goes bankrupt
By Terri Hall
March 2, 2016
Examiner.com

It's appropriate that on Texas Independence Day, March 2, Texans got to formally declare independence from its bondage to a tremendously unpopular, anti-liberty public private partnership (P3) contract as a result of Cintra's bankruptcy on SH 130 (segments 5 & 6, the southern 41 miles of the 86-mile tollway). It's been just over three years since former Governor Rick Perry's grand toll road experiment began on this stretch of highway.

Problems with ‘market driven’ road maintenance approach

Link to article here.

Though this is a very partisan viewpoint, her points about the pitfalls of road privatization are spot-on.

Problems with ‘market driven’ road maintenance approach
By Judy Ferro
Idaho Press
February 16, 2015

Recently Sen. Jeff Siddoway helped me realize that not all Republican legislators who’ve supported measures designed to destroy the public schools want to destroy the public schools. Now I’m hoping that Idaho also has Republican legislators who don’t realize that measures they support are designed to end public ownership of roads and bridges.

Sound impossible? Check out this headline from Bloomberg.com, “CPP Investment Board to buy 10 percent of 407 Toll Road for About $878 million.” That’s right. Corporations with $2 trillion sitting in banks are seeking profitable investments. Maybe people can’t afford to buy new things, but they’ll pay for necessities like roads.

Republicans claim that we can’t take care of roads and bridges today because we can’t pay for them. Never mind that in the 1950s — definitely not boom years — we embarked on an interstate highway system that was the envy of the world. Republicans then supported building roads because such long-term investments would help both businesses and people. For Democrats, there was the added bonus of good-paying jobs. Today’s Republican leadership, however, is more interested in making the rich even richer.

Since 2008, the transportation policy of ALEC — the American Legislative Exchange Council — has called for a “market-driven highway system” and “private investment in highway projects.”

“Tolling,” charging to use roads, is the subject of five of its seven principles. Do I need to remind you that several Idaho legislators are ALEC members? Loyola University economics professor Walter Block published a major book urging privatizing roads in 2009. Ted Stossel, Peter Samuel, David Klein and Linda and Morris Tannehill have echoed his call. Most cite “reducing congestion” as the No. 1 argument for privatizing.

Road crowded? Just charge more. Make those who can’t afford a $5 toll each day to crowd into side streets so the paying customers can cruise without delays. Economics professor Bruce L. Benson suggests privatizing even those side roads and giving the owners the power to police the environs so they can guarantee the safety of their customers.

Just how high would tolls have to be to provide a private police force? Powerful people who crusade against “one more cent” in taxes aren’t worried about your pocketbook. They have no qualms about you having to pay whatever the market will bear to corporations like Toll Road Investors or CPP Investments. And toll supporters don’t have to convince the public to support privatization. They just have to prevent us from maintaining our decaying roads and bridges long enough that fear of death or injury builds.

A collapsing bridge killing a dozen or more and embroiling the state in lawsuits would be a boon for them. And once we let our roads and bridges go, the chances of buying them back are nil. How do we retain our public infrastructure? To start off, we should follow Siddoway’s lead and give maintaining our roads and bridges a higher priority than new tax cuts. Idaho already collects the least taxes per person of any state.

Then we should spread the cost over a number of measures. Legislators are considering increasing user fees for long-haul trucks, vehicle registration fees and the gas tax. (It’s doubtful congressional Republicans can increase the federal gas tax; the Koch brothers and other oil billionaires are against it.)

There is also talk of increasing the sales tax another cent. Or we could add a new income tax bracket, perhaps charging an extra 0.5 percent for those making over $140,000 a year. None of these options is appealing. But paying tolls to visit the kids in Moscow could be a lot worse.

* Judy Ferro is the state committeewoman for Canyon County Democrats.

5 ways privatization is fleecing American taxpayers

5 ways privatization is fleecing American taxpayers
Salon.com
February 2015

Government outsourcing goes horribly wrong more often than not. Here are a few representative horror stories

For decades we’ve been subjected to constant propaganda that government is inefficient, bureaucratic and expensive. We’re told that the answer is to “privatize,” or “outsource” government functions to private businesses and they will do things more efficiently and everyone comes out ahead. As a result we have experienced decades of privatization of government functions.

So how has this wave of privatization worked out? Has privatization saved taxpayers money and improved services to citizens? Simple answer: of course not. If a company can make a profit doing something the government had been doing, it means that we're losing out one way or another. It’s simple math. And the result of falling for the privatization scam is that taxpayers have been fleeced, services to citizens have been cut way back and communities have been made poorer. But the companies that convinced governments to hand over public functions have gotten rich off of the deal. How is this a surprise?

To read the rest of the story, click here.

CNN: Secret world of toll collection, focuses on Harris County, Texas

The secret world of government debt collection
By Blake Ellis and Melanie Hicken
CNN Money.com
February 17, 2015

Government agencies across the country are hiring private debt collectors to go after millions of Americans over unpaid taxes, ancient parking tickets and even $1 tolls.

It’s a good deal for cash-strapped states, cities and other local governments. By outsourcing this dirty work and letting private companies charge debtors sky-high fees, government agencies can get these collection services free of charge.

And it's a great deal for debt collectors. In an industry already known for bad behavior, debt collectors that work for government agencies usually don’t have to work within the confines of consumer protection laws – opening the door for higher fees and even more aggressive tactics.

Their government bosses can give them the power to threaten debtors with the suspension of their driver’s license, garnishment of their wages, foreclosure and arrest to get them to pay up.

To read the whole story, click here.

Montgomery County rails against High Speed Rail plan

Link to article here.

Texans oppose high speed rail through their communities, as they did when it was packaged as part of the Trans Texas Corridor. Impacts deemed 'catastrophic'!

Montgomery County leaders, residents rally against proposed high-speed rail
by Liza Winkler
Impact News
February 3, 2015

An estimated 800 Montgomery County officials and residents gathered Feb. 2 at the Lone Star Community Center in Montgomery to speak out against the proposed construction of a 240-mile high-speed rail project between Houston and Dallas by 2021.

“[The high-speed rail] is one of the biggest threats to Montgomery County in many, many years,” retired Montgomery County Judge Alan Sadler said. “Once those [assessed property value] decreases take place if this train hits this route in Montgomery County, the entirety of the county will pay the tax differential to make up for the loss. It is extreme.”

Donate Now

Help us fight to preserve our rights and freedoms!
Make a secure donation today!
or donate by mail. We cannot do it without you!