Bills to allow Robin Hood perpetual tolls near passage
HB 1112 & SB 19 give toll agencies unlimited power to tax, SJR 13 makes Constitutional change
(Austin, TX, May 20, 2011) - Three bills are making their way through the Texas Legislature that represent a huge policy shift away from traditional turnpikes where the toll comes off the road when it's paid for to granting authority to keep tolls in place to fund other projects. HB 1112 by Rep. Larry Phillips allows toll entities, in effect, to toll in perpetuity and use borrowed money to secure more borrowed money, the same multi-leveraging methods that caused the subprime mortgage crisis.
"It's like building roads with credit cards," maintains Terri Hall, Founder, Texans Uniting for Reform and Freedom. "The fact that this risky multi-leveraged debt also means Texans will be tolled in perpetuity by un-elected boards makes these anti-taxpayer bills that much more egregious."
SB 19 by Sen. Robert Nichols, on the General State Calendar in the House for tomorrow, is known as the 'primacy' bill giving toll entities the right of first refusal on all toll projects in its jurisdiction. However, when toll entities exercise a right of first refusal, under Nichols' bill, they also get development rights for ALL future segments of the project. SB 19 also grants toll entities ownership of the road in perpetuity. This virtually guarantees tolls will be charged in perpetuity and that these projects will be never become non-toll roads. Hall believes this bill gives far too much power to these UN-elected toll entities.
'System financing' code for Robin Hood perpetual tolling
Some have dubbed this practice known as 'system financing' as Robin Hood since it steals toll taxes from one corridor and pledges it to another corridor (that those same users may not use). It can also involve increasing the toll on one segment to gain 'surplus revenue' to pledge to another project and so on, making it impossible to take tolls off the original road. The Texas Constitution currently prohibits perpetuities in Art I, Sec. 26.
However, if SJR 13 by Sen. Chris Harris, which has already passed the Senate and is currently in the House Calendars Committee, becomes law, Texans could lose their Constitutional protection from perpetuities since it, too, allows surplus toll revenues to be committed to other projects (potentially keeping tolls in place after the debt is retired).
"They worded SJR 13 in such a way as to hoodwink voters into thinking the amendment is about dedicating toll revenues to transportation projects, when it likely means tolls will be charged beyond when the road is paid for to fund new projects. It wouldn't even have to be road projects, 'transportation projects' could mean light rail or transit," notes Hall.
During some questions on the back mic on third reading of HB 1112 in the House, it was claimed HB 1112 does not mean tolls in perpetuity. But according to testimony by Sen. Steve Ogden in the Senate Transportation Committee March 9 while laying out his bill SB 363 that would make tolls cease when a road is paid for, it is: “I’m here to atone for my sins, and to make sure the innocent don’t pay for the guilty and to make sure we have truth in taxation. SB 363 addresses an issue in current law where the length of time a tolling entity is authorized to collect tolls on a project is not specified. SB 363 removes the authorization of all tolling entities from using surplus toll revenue to fund other toll projects. SB 363 also adds that once acquisition and construction costs for a toll road have been paid for then the collection of a toll ceases and the road becomes part of the state highway system which TxDOT maintains...
“But what we have in this state right now is perpetual tolling. And I don’t think it is truth in taxation...What I’m trying to do is to make tolls truly a fee for use rather than a general tax that gets spent by entities that really voters have not voted for or approved...I’m positive if you ask the public do you think tolls should go away if the road is paid for it’d be an overwhelming 'yes.'”
"So these bills would grant permission for toll entities to toll our citizens in perpetuity and make tolls no longer a user fee, but a perpetual, hidden tax; whereas right now, the law is not specific. A vote for these bills is a vote for PERPETUAL taxation in the hands of UN-elected bureaucrats," affirms Hall.
HB 1112 is in conference and may come up for a vote ANYTIME in either chamber.
Gives toll agencies lock on roads, assures higher road taxes
The implications of SB 19 could be widespread. Metropolitan Planning Organizations (MPOs) have been forced, due to persistent funding shortfalls, to designate most every road project as tolled in order to keep projects in its plans and moving forward, using the toll designation, essentially, as a placeholder. But due to primacy and the language in SB 19, a toll entity can exercise primacy over the project at any time once an MPO adopts ANY toll project into its plan, when locals may wish to revert that project back to a non-tolled project at a later date. SB 19 does not give them the flexibility to do so.
"The initiation process and re-initiation process coupled with the flawed MPO financially constrained mandates all but guarantee a huge portion of road projects will be tolled FOREVER. Plus, a project could be jockeyed back and forth over whether to toll or not and who will do it, indefinitely. There is no end to this process clearly spelled out in the bill," notes Hall.
The bill also allows toll entities to conduct its own environmental studies.
"Under no circumstances should a toll entity be able to conduct its own environmental studies -- this practice makes it certain that a tolled outcome will always be churned out as the 'preferred alternative' under the National Environmental Policy Act (NEPA), which violates the requirement of an unbiased review of all reasonable alternatives, including non-toll options," Hall reports.
Texas TURF is a non-partisan, grassroots, all-volunteer group defending Texans’ concerns with toll road policy, Trans Texas Corridor-style projects like public private partnerships, and eminent domain abuses. TURF promotes non-toll transportation solutions.