Perry backs more debt, toll taxes to pay for roads

Link to article here. Governor Rick Perry's Press release & the text of his speech is also below.

Actually this article makes it sound as though we'd be getting a portion of our existing vehicle sales tax dedicated to build free roads, but actually the Governor's plan is to use that TAX money to leverage more toll road debt. So they'll build the road with some of our tax money, but still charge us tolls to drive on it.

So if the Governor gets his way, he'll take the most promising pot of money we have to build free roads and get back to pay as you go and hijack it to build more toll roads and issue heaps more DEBT! Perry now advocates century bonds that will take 100 years to pay-off - well beyond the useful life of the road. He thinks we can 'manage' all this debt. But it's unsustainable. Under Perry, the state has amassed $31 billion in principle & interest in just the last 8 years maxing out the borrowing against future gas taxes and even dipping into general revenue to back bonds. Imagine what Perry would do with a new revenue stream!

Perry Backs Dedicated Car Sales Taxes for Highway Fund
By Aman Batheja
Texas Tribune
April 12, 2013

Gov. Rick Perry on Friday came out in support of dedicating a portion of future sales tax revenue from car sales to the state’s highway fund, while also leaving the door open to spending more of the Rainy Day Fund on infrastructure projects that he had proposed three months ago.

“With the rapid growth of our population and our healthy economy, the amount we take on in those sales is increasing steadily,” Perry said during a keynote speech in Austin at a transportation infrastructure conference hosted by the Texas Lyceum. “I propose that we dedicate the future growth of sales tax collected on motor vehicles to transportation infrastructure.”

The remarks put Perry in lockstep with the main proposal put forth by Senate Transportation Chairman Robert Nichols, R-Jacksonville, and House Transportation Chairman Larry Phillips, R-Sherman. Both have filed bills gradually dedicating a portion of future vehicle sales tax revenue to the highway fund.

The plan is one of several ideas lawmakers are considering to raise more money for the Texas Department of Transportation. Agency officials say they need $4 billion more per year just to maintain the current level of congestion in the state.

In his State of the State speech at the start of the legislative session in January, Perry called for spending $3.7 billion from the Rainy Day Fund for water and transportation infrastructure projects, and another $1.8 billion for some form of tax relief.  This week, Senate Finance Chairman Tommy Williams, R-The Woodlands, proposed spending $6 billion from the fund just on transportation and water projects. The fund is projected to accrue $11.8 billion by the end of the next biennium.

Asked by reporters Friday about Williams’ more expensive proposal, Perry didn’t rule it out.   

“I’m open to their ideas,” Perry said. “We need to use that Rainy Day Fund either for transportation infrastructure or to return it to the people of the state of Texas in the form of tax relief. We don’t need $12 billion in the Rainy Day Fund.”

Perry said he was less interested in putting Rainy Day Fund dollars toward public education, as Democrats in the House and Senate have proposed.

“We’ve got a substantial surplus in our state budget before you get to the Rainy Day Fund so I think the dollars for education are there in general revenue without going into the Rainy Day Fund,” Perry said.

In Williams’ plan, lawmakers would use $3.5 billion from the Rainy Day Fund to create a revolving infrastructure bank that would help local entities move transportation projects forward around the state by either loaning out money for the projects or helping public entities borrow money for the projects at lower interest rates. The projects would have to generate revenue, either through tolls or some other means, to pay back to the fund.

Perry said moving forward with such a plan makes sense now given “the very real possibility” that “interest rates are going to skyrocket.”

“We are in a unique position to take advantage of these historically low interest rates and use long-term bonds to capitalize on ongoing revolving infrastructure funds,” Perry said. “This will enable us to avoid the higher interest rates that are almost certainly coming soon.”

While Perry and Williams may be moving toward agreement on the Rainy Day Fund, the two men don’t see eye to eye on whether the state should dedicate tax revenue from car sales to road projects.

In a recent interview with the Tribune, Williams said such a plan would make things difficult for future legislatures as, over time, a bigger portion of state tax revenue gets automatically dedicated to roads. He has said he prefers raising the registration fee to raise more money for transportation.

“We’re going to have a great discussion on that, and I totally respect Tommy’s position,” Perry said. He said he prefers dedicating the vehicle sales tax over other proposals “because it’s not a new tax. It’s not a new fee.”

Perry also reiterated his support for ending diversions of the state gas tax to areas other than transportation, an issue budget writers in the Legislature have said they still hope to address this session

By combining all his ideas on transportation funding, Perry said, “Texas would be able to capitalize more than $41 billion in transportation projects over the next 20 years. That should be enough to take care of the major improvements we need in this state.”

Transportation has been a politically tricky issue for Perry over the last decade. In 2002, he proposed the Trans-Texas Corridor, a hugely ambitious plan to blanket the state in a network of privately-operated toll roads, railroad tracks and utility lines. He later scrapped the plan once public opposition mounted and virtually the entire Legislature disowned it.

On Friday, he seemed ready to tackle the issue head on once again.

“We have to take on this challenge of transportation infrastructure much more aggressively than we have in the past,” Perry said.
Link to press release here.

Gov. Perry: Now is the Time to Invest in Texas’ Future Infrastructure
Gives keynote address at Texas Lyceum Public Conference
Friday, April 12, 2013  •  Austin, Texas  •  Press Release

Gov. Rick Perry emphasized his commitment to finding long-term solutions to Texas' growing infrastructure needs, specifically strengthening the state's transportation infrastructure to meet the demands of our rapidly growing economy and population. The governor delivered the keynote address at the Texas Lyceum Association's 47th Public Conference.

"We have arrived at a moment of great possibility in our state's history - our booming economy has grown demand on our infrastructure, but has also left us with a solid financial foundation upon which to build sound infrastructure for the next half-century," Gov. Perry said. "Now is the time to do the fiscally responsible thing and make our state more accessible and productive for generations to come. Strengthening our infrastructure will improve the flow of goods throughout our state, reduce wear and tear on vehicles, and improve our quality of life in a way that can't be measured in dollars and cents."

In his State of the State address, Gov. Perry outlined several proposals for funding future infrastructure projects, including using the Rainy Day Fund for a one-time capitalization of water and transportation projects around the state. The governor also called for ending diversions from the State Highway Fund, which would make billions more available for road maintenance and construction.

Gov. Perry noted that Texas' principled fiscal discipline has kept spending in check and our debt low, allowing the state to take advantage of historically low interest rates to capitalize a revolving infrastructure fund using long-term bonds. These bonds would enable the state to lock in today's low interest rates to begin infrastructure projects now, keeping the cost of construction low when rates inevitably increase in the future. Additionally, Gov. Perry has proposed dedicating future growth in the motor vehicle sales tax, which the state already collects on every vehicle bought in Texas, to transportation infrastructure.
Text of Governor Rick Perry's Key Note Speech to the Texas Lyceum, Friday, April 12, 2013

Almost didn't make it here on time, the traffic was really awful.

That's a terrible joke, but for a second there, you probably didn't know if I was kidding or not.

Such is the state of roads in a wildly-successful economy.

It's hard to apologize for it, though.

Our population continues to grow by more than a thousand people a day, looking for jobs and their share of the American dream in a state that makes those dreams more attainable.

And it's not just people who are picking Texas as their new home, either.

Our business climate continues to attract employers, large and small, seeking to relocate and expand.

Just a week or so ago, we got the news that Borusan Mannesmann, a global leader in steel pipe construction based in Turkey, would be building its first U.S. factory right here in Texas.

Baytown will be home to the facility, along with 250 jobs and $148 million in capital investment.

A week before that, GlaxoSmithKline and Texas A&M announced they were teaming up in the creation of a $91 million, state-of-the-art facility for the development and manufacture of cutting-edge influenza vaccines.

If you've been in town in the last few days and know a techie, you've probably also heard that Google has selected Austin as the next city for its Google Fiber service, which will bring super-high-speed Internet at competitive rates.

Combined with the existing digital infrastructure already put in place by providers like AT&T, Grande and Time Warner, this helps affirm Central Texas as the most logical location for start-ups and research firms who want to grow and thrive.

Visionary companies like Facebook, EA, Samsung and Apple aren't going to stop coming to Texas anytime soon, as long as we remain committed to the fiscally conservative policies that have helped us reach the top of the economic mountain.

Our low taxes, reasonable regulations, fair courts and world-class workforce have become a big part of what Texas is all about, and I can't see us changing that basic formula anytime in the foreseeable future.

Our efforts to support the new generation of entrepreneur, through programs like the Texas Emerging Technology Fund, have further diversified our industry portfolio, and captured the attention of publications and broadcasters as the gold standard of how to do business.

That, in turn, attracts the attention of CEOs and industry decision makers from across our country, many in high-tax, high-regulation states like California and Illinois who were already looking for a better way to do business.

So Texas is blessed with an abundance of interest and an abundance of people.

The results of that blessing can be found jammed into our highways during rush hour across the state, or along our interstates between those cities that are the lifeblood of our economy, and in our status as the nation's top exporter for 11 years running.

Every hour stuck in traffic is an hour missed with our families, an hour spent not living the life we've all worked so hard to build.

And congested roads are only part of the problem.

Innovative drilling methods have opened up vast new areas of Texas to gas and oil production in Shale Fields like Barnett in the north and Eagle Ford down south.

This thriving industry is employing thousands, but also putting a strain on the roads in those regions, roads that simply were not built for that level of industry.

So, again, as we celebrate our success, we have to take steps to ensure we can sustain that success.

We don't want to become another example of the wildly successful restaurant Yogi Berra once criticized "Nobody goes there anymore, It's too crowded."

We're at a crossroads in Texas, and we have arrived at a moment of great possibility in our state's history.

Our booming economy has left us with a solid financial foundation upon which to build sound infrastructure for the next half-century.

The fragile nature of our nation's economy has resulted in historically low interest rates, and nobody believes that can go on indefinitely.

In fact, we all have to prepare for the probability that interest rates will skyrocket.

Because Texas has been so vigilant in our stance against unnecessary spending, and because we've kept our debt to a minimum, we are in a unique position.

We can take advantage of these historically low interest rates, and use long-term bonds to capitalize an ongoing, revolving infrastructure fund.

This will enable us to avoid the high interest rates that are almost certainly coming soon, and begin projects now before the price of construction takes another giant leap forward.

In essence, we can lock in these projects at the interest rates and construction costs of today when the cost of both are significantly cheaper than they will be in the very near future.

This isn't a matter of choice anymore, either we have to take on the challenges of our transportation infrastructure much more aggressively than we have in the past.

Over the years, we've come up with solutions that solved individual transportation challenges in a variety of ways.

But we have to think bigger.

That's why, during my State of the State address, I called for utilizing money from the Rainy Day Fund for a one-time investment of billions in infrastructure programs.

I also called for an end to the diversion of State Highway Fund appropriations, which would mean billions more for road maintenance and construction.

We're making progress in those initiatives, and talks are ongoing.

We have to continue to think outside the box, and consider new ways to fund transportation.

For example, on every car or truck sold in the State of Texas, we take in sales tax.

With the rapid growth of our population and our healthy economy, the amount we take in on those sales is increasing steadily.

I propose we dedicate the future growth in sales taxes collected on motor vehicles to transportation infrastructure.

Now, this is not a new tax, and it is not a new fee.

The sales tax rates would remain the same, and the money would still be collected, either way.
What this will do is take a portion of future sales taxes collected on motor vehicles and dedicate it to a more productive, efficient experience for the people buying those cars in the first place.
We need to find big solutions to our transportation challenges.

Now is the time.

By using strategic debt management, enhancing the existing infrastructure fund, ending Highway Fund diversions, investing Rainy Day Funds and future sales tax collections, Texas would be able to capitalize more than $41 billion in transportation projects over the next 20 years.

That should be enough to make major improvements and keep traffic flowing in the Lone Star State for the next several decades, at least.

You know as well as I do that strengthening our infrastructure will improve the flow of goods throughout our start, reduce the wear and tear on vehicles, personal or business, and improve our quality of life to a degree you really can't measure in dollars and cents.

It's also important to remember that a big part of convincing employers to come to Texas is convincing them we'll have adequate electricity, water and transportation infrastructure to fit their needs.

Now is the time to make sure we do.

Now is the time to do the fiscally responsible thing and make our state more accessible, more productive, and more inviting to employers for generations to come.

May God bless you and, through you, may He continue to bless the great State of Texas.