Indiana toll operator going bankrupt

Link to article here.

This is what privatizing our public roads reaps:

"Tolls for cars driving the length of the road are now $8.80 as compared to $4.65 when the lease was signed. Tolls for large semitrailer trucks are now $35.20, as compared to $18 when the lease was signed."

Then here's a Letter to the Editor that appeared in the Las Vegas Review Journal, June 25, 2011:

Road worries

To the editor:

State Sen. Joe Hardy's legislation allowing a toll road around Boulder City may lead to a perilous path.

Indiana sold its portion of a federal highway to bankers. The contract the governor signed is for 75 years. That contract prevents Indiana from improving any roads near the toll road or having high-speed rail service. Indiana must reimburse the investors for loss of tolls due to floods, etc., and the state must maintain the toll road.

Today, the tolls have increased obscenely and will continue to increase. Is this the future of Boulder City?

The Nevada Department of Transportation will not be allowed to maintain U.S. Highway 93/95, or Nevada Way, which is the main thoroughfare through Boulder City, if the contract with investors is similar to Indiana's.

I feel that any contract with investors should be approved by the voters of Clark County to safeguard our rights.



Report: Indiana Toll Road operator may default

By Keith Benman This email address is being protected from spambots. You need JavaScript enabled to view it., (219) 933-3326 | Posted: Saturday, June 25, 2011 12:00 am

Motorists drive under i-Zoom signs near the Indiana Toll Road Portage exit. Toll Road operator ITR Concession Co. could be in danger of defaulting on its huge debt by early next year, according to a report. Also, tolls are scheduled for another increase Friday.

The private operator of the Indiana Toll Road could be in danger of defaulting on its huge debt by early next year, according to a report on the news wire service Debtwire.

The May report in Debtwire, a Financial Times Group publication, stated Toll Road operator ITR Concession Co. is rapidly burning through an interest reserve account, which much be maintained to keep $4.1 billion in loans in good standing.

Indiana Finance Authority Chairman Christopher Ruhl, in an email to The Times, stated that even in case of default and foreclosure, no taxpayer money is at stake, as the state has received the full $3.8 billion lease payment in June 2006.

He noted the lender would need the state's approval to transfer control of the Toll Road to any new private consortium or operator that may step in.

Tolls headed up

Tolls on the Indiana Toll Road make their annual increase Friday. Cars and motorcycles with i-Zoom or other electronic transponders will continue to receive a state-sponsored discount and see no increase. Tolls on the barrier system in Northwest Indiana also will not increase. Listed are some of the new tolls for driving the length of the road followed by the current tolls:

Cars and motorcycles: $9/$8.80

Car with trailer or small box truck: $11.50/$11.10

Semitrailer truck: $36.20/$35.20

"We've known since 2006 that the $3.8 billion lease payment was financed primarily through debt, that the debt came due in 2015 and that the amount of debt could place a significant burden on the capital structure of the concessionaire," Ruhl wrote.

The apparent financial difficulties have come about despite dramatic hikes in tolls since the 157-mile road was leased to a private consortium backed by Spain-based conglomerate Cintra and Australia-based Macquarie in June 2006.

Tolls for cars driving the length of the road are now $8.80 as compared to $4.65 when the lease was signed. Tolls for large semitrailer trucks are now $35.20, as compared to $18 when the lease was signed. Tolls are scheduled for another increase July 1.

According to the Debtwire article, the lending group for the Toll Road privatization is led by Royal Bank of Scotland, which has now assigned the troubled investment to its workout group to see if a financing solution can be found.

An interest reserve account of $150 million was established at the time the Toll Road lease deal was financed, but that has now dwindled to between $40 million and $50 million and could be depleted by year end, sources told Debtwire.

Royal Bank of Scotland did not respond to a Times' request for comment.

Cintra responded directly to questions on the status of the interest reserve account with an e-mailed statement that read in part: "The reserve account was initially created exactly for the intended financial gaps that occur over long time periods of operations. That is expected during economic cycles. Naturally it's going to be accessed and utilized on occasion, which is a continued sign of fulfilling its intended use."

A Macquarie representative said there has been no default on ITR Concession's debt, and no default is expected.

Ruhl stated the Indiana Finance Authority has been aware that interest expense has exceeded gross Toll Road revenue for years. He said that was "not a surprise" given the amount the private consortium borrowed to pay for the lease.

The lease agreement provides that the road returns to state control if any successive owner does not adhere to its operating standards. That owner could be a bank, hedge fund or consortium much like the current one.

As early as December 2009, ITR Concession Co. CEO Fernando Redondo told The Times traffic revenue for the Toll Road were not what the company had hoped it would be. He attributed the shortfall to lower than expected traffic levels during the recession and he expressed confidence revenue would recover.

Cintra parent company Ferrovial's annual report for 2010 shows traffic on the Toll Road in Northwest Indiana, its most heavily traveled section, was down 6.5 percent for the year. On the rest of the Toll Road traffic was up 2.7 percent.

However, a 10 percent toll boost in June 2010 helped pump up Toll Road revenues, with earnings before interest, taxes, depreciation and amortization (EBITA) increasing to $155.9 million, a 15.9 percent increase as compared to the year before.

The Indiana Toll Road Oversight Committee is aware of the possible financial difficulties at ITR Concession, said former Indiana Toll Road Executive Director Leigh Morris, who is now vice chairman of the oversight committee.

Morris said the lease between the Indiana Finance Authority and ITR Concession signed in 2006 contains more than adequate safeguards.

"It ensures continuity of the operation of the Toll Road and for the protection of the asset," Morris said.

Durbin: Tread carefully before selling public assets

Link to article here.

Durbin gets it. However, his bill needs to go farther. His bill still allows governments to enter into public private partnerships -- the only "protection" is disclosure of the terms and an insurance policy that the feds get their money back. That, however, isn't much protection for the actual taxpayers being asked to pay the daily toll taxes plus the profits of a foreign company in these government-sanctioned monopolies over our PUBLIC infrastructure.

Tread carefully before selling public assets

Federal taxpayers must be protected

By Dick Durbin

Special contributor to the Chicago Tribune

7:06 PM CDT, June 23, 2011


We all know the story of Chicago's parking meters — for a one-time payment of $1.15 billion, we turned over control of a public asset to a private investor. But now, only two years into a 75-year lease, that money is almost gone and the costs just keep going up for Chicagoans and visitors.

From parking meters to airports, public assets around the country are now seen as "cash cows" that can be sold or leased by cash-strapped state and local governments for a one-time payment.

Having billions of dollars immediately available to plug budget holes without raising taxes is very appealing. And to the delight of Wall Street investors, state and local governments often fail to ask the important questions or consider the long-term impact.

In 2006, Indiana struck a deal with foreign investors to lease the 157-mile Indiana Toll Road for 75 years in exchange for a one-time payment of $3.8 billion. Under the deal, the investors own the right to collect tolls, which they plan to increase in the coming weeks. For truckers that fee will rise to $36.20 from $35.20.

Is it surprising when foreign investors — with no stake in the road other than their interest in turning a profit — continue to raise tolls?

Whether you agree or disagree with privatization, two things are obvious. First, taxpayers need to be asking more and better questions before handing over control of critical public assets like a highway, an airport or a parking meter concession. And second, Uncle Sam is being played for a sucker.

In Washington we're broke, so for every dollar we spend, we borrow 40 cents from China, Saudi Arabia and others. We then give these borrowed funds to state and local governments because they can't afford to build highways and airports on their own. Now many of these same governments are selling and leasing these assets without any payback to the federal government.

It is time for the federal taxpayers to have a seat at the table and a return on their investment in these projects. Taxpayers across the U.S. have invested hundreds of billions of dollars building our nation's infrastructure and that investment should be protected.

Last week, I introduced legislation that would require state and local governments to take a hard look at the impact these deals are having on the federal taxpayer and the people that use these transportation assets. The Protecting Taxpayers in Transportation Asset Transfers Act would require full disclosure of the terms and conditions of any privatization of an asset that was built with federal tax dollars.

The bill would attach a lien to existing federally funded major transportation projects that have received more than $25 million in federal funding or have a value over $500 million. The lien would only be removed after state and local governments repay the depreciated value of federal funds used to build and maintain the asset.

Instead of incentivizing quick, short-term decisions, the federal government should be asking the tough questions when governments turn over publicly funded transportation assets to for-profit operators. This legislation will make sure those questions are answered before we sell our public assets.

U.S. Sen. Dick Durbin, D-Ill., is the assistant Senate majority l

Glenn Beck tackles Agenda 21 that seeks to privatize public roads

Finally a member of the mainstream press is uncovering Agenda 21 and the sustainable development policies. Agenda 21's stated goals are to abolish private property and restrict mobility in individual cars (ie - herd people into the cities and make them dependent on mass transit). Public private partnerships are a primary means to accomplish these goals, which is the sale of our public roads to private, even foreign corporations which not only mean toll rates as high as 75-80 cents PER MILE, it also restricts the expansion of free lanes and allows the government to abuse its eminent domain powers to steal your land and give it to another private interest for profit.

Check out Beck's expose' on YouTube here. Here's an example of the sort of propaganda sustainable development proponents produce in order to make it "cool" and "green" to give up your property rights and freedom to travel. Watch it on YouTube here.

Lawmaker wants to privatize transit

Link to article here.

So politicians in all their wisdom want to spread a system that's already NOT working, privatization of our public roads & parking meters, to another mode of transportation, mass transit, a mode already plagued by the need for massive public subsidies that has never been able to pay for itself with users alone. The famous Chicago parking meter boondoggle caused parking rates to go from $1/hour to $5/hour. A huge bump is also true of toll rates when public roads are privatized. So who's making out on the deal? Not the taxpayer. It's fiscally irresponsible governments willing to put taxpayers in hawk for generations to get quick cash to solve today's budget problems, rather than restrain spending to match revenue.

Kirk unveils plan to ease transit privatization

By Jon Hilkevitch

Chicago Tribune

11:14 AM CDT, June 20, 2011

Republican Mark Kirk today unveiled a plan designed to make it easier for governments to lease public transportation assets or enter into partnerships with private companies to build them.

In presenting the details of his--which runs counter to proposed legislation from Sen. Dick Durbin--said the plan could produce $100 billion for public-private partnerships on highway, mass transit, aviation and rail projects.

"Our roads, rail, transit and airports are facing unprecedented funding shortfalls,” he said.  “We should not further burden working families with higher gas taxes.  Instead, we should look to our own economic history to find a solution.”

The measure would "eliminate barriers for innovative funding options,'' he said. Joining Kirk at the announcement at the Union League Club were U.S. Reps. Randy Hultgren, a Winfield Republican, and Dan Lipinski, a Democrat from Western Springs.

The legislation, called the Lincoln Legacy Infrastructure Development Act, would remove federal restrictions on public-private partnerships while requiring that the proceeds of leases or sales be reinvested in infrastructure, Kirk said.

The initiative to loosen the reins on privatization, coming at a time of record federal and state deficits and the prospect of declining government spending on public infrastructure, runs counter to legislation that Democrat Durbin introduced Friday.

It also follows controversial privatization deals in Chicago, including former Mayor Richard Daley's long-term leases of the Chicago Skyway and the city's parking meters. Daley also approved an agreement, which subsequently fell apart, to lease Midway Airport.

Durbin's focus is to protect taxpayer dollars that are used on state and local projects involved in a privatization deal. His proposed legislation, The Protecting Taxpayers in Transportation Asset Transfers Act, would require public involvement before major transportation projects could be leased or sold, he said.

Durbin said he is not opposed to privatization. "But as the private financiers take control of an airport, road or other transportation asset for decades, sometimes as long as 99 years, the federal taxpayer is often left holding the bag,'' Durbin said.

In the case of the Skyway and Midway, the city spent hundreds of millions of dollars rebuilding both the elevated toll road to Indiana and the Southwest Side airport before putting them on the block.

Chicago business owners and residents led by Little Village community activist Raul Montes Jr. called Sunday on Mayor Rahm Emanuel to end the city's lease of the tollway.

"It's an infamous deal," Montes, 36, said. "When we sell Chicago's assets to alleviate budget concerns, it's pretty much fiscally irresponsible."

The city sold the rights to the Skyway in 2005 for $1.83 billion for a 99-year lease. The roadway now costs $3.50 to travel.

The city's contract with Skyway Concession Company LLC is legally binding. Ending the lease early would likely be extraordinarily expensive, if possible at all.

The parking meter deal also has caused public anger over hefty increases in parking rates, the private operator's initial mismanagement of the system and criticism that the city should have received more money for the 75-year lease.

Any deal to sell or lease public assets should include a return on the federal taxpayer investment, Durbin said.

Perry lies about foreign creditors

Link to article here.

Texas Governor Rick Perry, who is clearly testing the waters regarding a presidential bid though he promised Texans he wouldn't before they re-elected him last November, told a Republican gathering in New Orleans over the weekend that Texas doesn't have "some foreign creditor to finance deficit spending" like the federal government does. Wanna bet? By selling off Texas' public buildings and roads to foreign corporations like Cintra and Balfour Beatty, Perry and the Legislature are clearly making future generations of Texans pay for a bailout of lawmakers for their chronic underfunding of and raiding of highway funds. Entering into public private partnerships for every sort of infrastructure is the flavor of the month that lawmakers turn to in order to hawk-up our public 'assets' (like taking out a second mortgage) to get quick cash rather than match spending with revenues or end gas tax diversions for non-road purposes. In other words, PPPs give politicians a get out of jail card to engage in spending beyond their means, using the same 'foreign creditors' that Perry denounced.

For more on the bills passed that allow this, go here. Also, Texas currently has 20 deals in the works with none other than China.

Texas defers its responsibilities more than Perry would have America believe

Jason Embry, Commentary

Published: 7:25 p.m. Monday, June 20, 2011

Key to Gov. Rick Perry's I-may-be-running-for-president summer tour is the contrast he draws between the way Texas and federal officials write their budgets.

"In Texas, we believe that you can't defer tough decisions for tomorrow's generation," Perry told Republican activists in New Orleans on Saturday. "And unlike Washington, we don't have some foreign creditor to finance deficit spending."

You've got to give him that second part. The two-year state budget that lawmakers wrote this year is balanced, and it doesn't rely on foreign creditors.

The first part of Perry's statement, however, isn't so simple. Texas may not be deferring tough decisions to tomorrow's generation, but it is deferring them to tomorrow's Legislature.

To start, lawmakers are putting the finishing touches on legislation that would defer about 
$2 billion in payments to school districts until the opening days of the next budget cycle. This accounting trick has broad support in the Legislature, and for good reason. It gives lawmakers a chance to free up more money for the rest of the budget this year, but schools get the money soon enough in the next budget cycle to prevent any major disruptions. Still, it is a way to avoid the tough choice of balancing the budget with spending cuts alone.

But the more significant issue is that legislators balanced the budget by leaving almost $5 billion in expected Medicaid costs unfunded.

Medicaid, which provides health care for the state's poorest residents (mostly children and elderly people), is a required program that uses state and federal dollars. The Texas version provides some of the least generous benefits in the country.

The Legislature is supposed to fund Medicaid over the next two years based on how much state health officials say it will cost, but this year lawmakers decided to pay only part of the bill. That decision may have allowed lawmakers to prevent even deeper spending cuts or tax increases, but it also means lawmakers will find a $5 billion invoice waiting for them when they arrive for the 2013 legislative session.

Lawmakers also avoided any real discussion of the long-term deficit in the tax structure that will indefinitely complicate efforts to invest in Texas schools, colleges and universities.

Senate Finance Committee Chairman Steve Ogden, a Bryan Republican who is perhaps the most candid state official who has any real power at the Capitol, told the Houston Chronicle that this year's Legislature "basically kicked the can down the road in almost every area."

One other note about Perry's speech in New Orleans: Before he started talking about deferring tough decisions, he bragged that Texas had left $6 billion in the rainy day fund. If anyone is still wondering why Perry so strenuously resisted spending that money to cope with this year's shortfall, even though he had advocated using rainy day money in previous years, you just got your answer.

Goldberg: Public Private Partnerships are corporate bailouts

Glenn Beck interviews Jonah Goldberg on his book that exposes how big corporations and regulators work hand in hand to rip-off taxpayers using public private partnerships (PPPs). Texas lawmakers opened the floodgates to PPPs in the 82nd regular legislative session for roads and every other type of public infrastructure, where they hawk-up Texas sovereign land and 'assets' like highways, public buildings, schools, water supply facilities, ports, etc. to private, even foreign, corporations in sweetheart deals with massive public subsidies that result in 75 cents per mile in new toll taxes to use our 'public' roads.

See it on YouTube here.

Private toll road, not a good deal, says Deal

Link to article here.

Toll-road deal might not be good deal, says Deal

June 7, 2011, by Jay Goodman, Atlanta Journal Constitution

Under prodding from Gov. Nathan Deal, the state Department of Transportation has suspended a new toll project along I-75 north of the Perimeter into I-575 in Cherokee County.

If you’ve driven it at rush hour, you know there’s a real need for additional capacity in that corridor. That unmet need explains why three major international consortiums were ready to negotiate for the right to build and own the toll project, which they see as a potentially profitable business.

The state has a lot to gain as well. The hundreds of millions of dollars in private investment that the project might attract would stretch Georgia’s transportation budget, freeing up resources it could invest elsewhere. But there’s a catch, or more accurately a few of them.

First, the new toll lanes were intended to be “managed,” meaning that if the lanes got too crowded, the toll would automatically rise high enough to discourage additional drivers from using the lanes. Those drivers who couldn’t afford or justify the additional cost would be forced to use the existing, more crowded lanes.

DOT studies confirm that lower-income Georgians would be less likely to use the so-called Lexus lanes, even if it saved them time. Those studies also document that building the additional toll lanes would not ease congestion in the existing 1-75 lanes. Any drivers lured into the less-congested toll lanes would quickly be replaced by new drivers who are currently discouraged from using the interstate by traffic.

Finally, even with heavy traffic in that corridor, the toll lanes would not come close to paying for themselves. To make the project pencil out, the state would have to subsidize private investment by as much as $450 million.

Apparently, that’s what got the governor’s attention. He has asked the DOT board to halt the project pending approval of a federal loan to help lower the state’s costs.

That’s an important point: Transportation debates in Georgia often run aground on the claim that transit and rail systems ought to be self-supporting, as if they were businesses. But as the example of the toll project demonstrates, most highways don’t pay for themselves either. (Neither does the street outside your home, by the way.) The same is also true of freight transportation, which is why Deal and Atlanta Mayor Kasim Reed were in Washington, D.C. last week trying to shake loose federal money for the deepening of the Savannah harbor.

Yet for some reason, I don’t recall state legislators insisting that such projects be abandoned because highways and harbors ought to be able to paying for themselves, without taxpayer subsidy. Apparently that is a test applied only to mass transit.

It’s also important to be clear about the nature of the “public-private partnership” proposed for the I-75 toll project and similar projects. While such projects would be privately run and owned, they’re not normal businesses. For example, a key point of negotiation between the state and private investors would be the ability of toll road operators to bar new transportation options from competing with them in that corridor. Overall, the amount of profit that private companies make in such an arrangement is driven less by the efficiency with which they operate than by the skill with which they negotiate with public officials.

That makes openness important. Under the original process laid out by DOT officials, Georgians would not be allowed to know the details of any deal negotiated on their behalf until after the final contract had been signed. It’s as if your lawyer were to negotiate a house purchase on your behalf, then refuse to let you read the contract until after you signed it.

That’s unacceptable. If the proposal is revived, it should be with the understanding that the entire contract will be made public for least a month before state officials can make it final.

– Jay Bookman

Perry for Prez? Just say 'No'

While Rick Perry is galavanting around the country pretending NOT to run for President, the business of taking care of Texas is being left to a Legislature (in a special session called by the Governor) that's hostile to taxpayers, property rights, and freedom.

Texans thought they sent a message to politicians of all political stripes last November — we’re fed-up (no mistake that was the title of Perry's latest book) with out of control taxation, debt, spending, and big government and politicians who proceed on that course do so at their own peril. While Governor Rick Perry tried to convince tea partiers and grassroots conservatives that he took up the mantle of limited government and low taxes, there’s plenty of evidence that the Governor's promises are nothing more than empty rhetoric.

Apparently, Texas is for sale since the Texas Legislature is drinking Rick Perry's Kool-Aid to sell-off virtually everything not nailed down using controversial public private partnerships (PPPs). Perry's priorities are not what the grassroots have been demanding like ending diversions of road taxes to non-road uses. It’s not cleaning up the highway department. It’s not getting all of Texans’ gas taxes back to Texas. It’s not reining-in the $31 billion in road debt (most of it used to subsidize toll roads, a DOUBLE TAX, and they just added $3 billion more in Prop 12 road debt to the budget). It’s selling off Texas to the highest bidder (with PPPs), which is the MOST expensive (75 cents a mile in tolls, like adding $15 to every gallon of gas you buy kind of expensive), anti-taxpayer method of funding infrastructure. Yet he'll tell you with a straight face he's balanced the budget without raising taxes.

PPPs represent eminent domain for private gain, which is what caused much of the backlash to the Trans Texas Corridor, where PPPs were the financing mechanism that grants these private entities the control of not just the facility, but the right of way/surrounding property where private companies make a killing on concessions. Texans hold private property rights sacred, and PPPs throw gasoline on the Trans Texas Corridor fire that Perry is attempting to convince Texans has been extinguished.

A repeal of the Trans Texas Corridor (TTC) finally passed, yet through a bill just enacted 15 Texas road projects can be sold-off to foreign companies for a half century giving those entities the ability to cash-in and effectively own and control all the hotels, restaurants, and gas stations along those tollways, Perry got his Trans Texas Corridor piece by piece without the radioactive TTC name attached.

So while Perry trapses all over the country with his limited government, lower taxes rhetoric, he and his party are basically granting government a blank check to trample on property rights and pick winners and losers — who will lose their land to benefit another, not for matters of public necessity. If the government can steal your land, it’s tantamount to stealing your wealth. Who said Republicans aren’t socialists? PPPs are just the sort of wealth redistribution they like — giveaways to their cronies and special interest friends. Steer clear of Rick Perry. He's hazardous to your wallet and your freedom!

Texas for Sale: New laws sell Texas to highest bidder

Texans thought they sent a message to politicians of all political stripes last November — we’re fed-up with out of control taxation, debt, spending, and big government and politicians who proceed on that course do so at their own peril. While Governor Rick Perry tried to convince tea partiers and grassroots conservatives that he took up the mantle of limited government and low taxes by declaring certain pet issues as “emergency items” in the 82nd regular legislative session, there’s plenty of evidence that the Governor and the Legislature’s priorities don’t remotely resemble those of the electorate (the water rights war, making Texas the repository for the nation’s nuclear waste and the original ‘loser pays’ tort reform bill are just a few examples, many more to follow).

Whether it was Voter ID, eminent domain reform, or the sonogram bill, such grassroots hot button issues got watered down demonstrating it was more about political pandering and serving up red herrings to distract the grassroots than about meaningful reform. Yet, bills that had massive grassroots support, like ending tolling existing roads, groping TSA patdowns, and naked body airport scanners, all failed to pass. With all the GOP talk of throwing off federal government interference in Texas, the Texas Senate cratered to threats from the Justice Department to make Texas a no-fly zone if it passed the patdown ban. Guess all that huffing and puffing amounted to mere election-year rhetoric to get re-elected.

Texas landowners need not apply
The author of SB 18, the eminent domain bill, Sen. Craig Estes called it a carefully brokered deal with special interests, brokered behind closed doors before the session even started, and Texas property owners weren’t invited. The bill does NOTHING to protect landowners from having their land taken and handed to another private party in the name of a laundry list of ‘public uses,’ the cornerstone of the landmark Kelo case from which Texans remain unprotected. SB 18 also fails to protect property owners from eminent domain for economic development and blight, and that’s by design based on what the Legislature had in store later.

Name your price & they’ll sell you Texas
A steady stream of bills to sell-off Texas infrastructure to private corporations flooded the pipeline during the 82nd Regular Session of the Texas Legislature with a key bill, SB 1048, to authorize state and local governments to privatize virtually every kind of public infrastructure (except roads) and charge user fees or lease payments for the public to access its own buildings: schools, hospitals, nursing homes, water supply facilities, ports, mass transit, libraries, even telecommunications and pipelines.

Chair of the House Transportation Committee Larry Phillips authored the most sweeping public private partnership (PPP) bill pertaining to roads (HB 3789 that never even got a hearing in Committee when the grassroots got wind of it), with Rep. Bill Callegari (HB 2729 passed both chambers) and Rep. John Davis carrying bills (HB 2432 the companion to Sen. Mike Jackson’s SB 1048) for other types of civil works projects. In total, more than 30 bills to privatize Texas infrastructure were filed this session.
Apparently Texas is for sale and SB 1048 will be Katie-Bar-the-Door on selling off virtually everything not nailed down. The priorities of this Legislature are crystal clear. It’s not what the grassroots have been demanding like ending diversions of road taxes to non-road uses. It’s not cleaning up the highway department. It’s not getting all of Texans’ gas taxes back to Texas (HB 3390 that died in the Senate Transportation Committee). It’s not reining-in the $31 billion in road debt (the House caved in conference committee adding $3 billion more in Prop 12 debt to the budget). It’s selling off Texas to the highest bidder, which is the MOST expensive, anti-taxpayer method of funding infrastructure.

TURF along with over 100 grassroots groups delivered an Open Letter (note: this version of letter includes only the list of groups, not individuals, due to file size) with 2,000 signatures (collected in just one week) to Perry and every single legislator putting them on notice about PPPs and transportation issues, yet the Legislature ignored the public opposition.

The bill was written by British infrastructure firm, Balfour Beatty, which doesn’t sit well with a plurality of Texans who don’t like the idea of foreign ownership of our public infrastructure. Unlike the 52 year cap on road PPPs, SB 1048 gives no limit on the length of time a PPP can last (one example given in Austin was for 100 YEARS) or whether such broad authority expires.

Two anti-taxpayer provisions in SB 1048 are the fact taxpayers secure the private entity’s debt (2267.061 (f)) and it authorizes public subsidies for private profits by raiding taxpayers’ money through loans from the State Infrastructure Bank, which is currently NOT authorized in law (Sec. 2267.060 (2)). The House voted for Rep. Lois Kolkhorst’s amendment to the TxDOT Sunset Bill, SB 1420, to ensure the Phillips’ Amendment regarding the State Infrastructure Bank could not lend taxpayer money to private entities (both amendments were later stripped). Yet, no one insisted upon the same protection in SB 1048.

Eminent domain for private gain
PPPs represent eminent domain for private gain, which is what caused much of the backlash to the Trans Texas Corridor, where PPPs were the financing mechanism that grants these private entities the control of not just the facility, but the right of way/surrounding property where private companies make a killing on concessions. SB 1048, in Sec. 2267.001 (10) (a), grants the private entity rights to apurtenance, which the legal definition given by Merriam-Webster’s Dictionary of Law is “property (as an outbuilding or fixture) or a property right (as a right of way) that is incidental to a principal property and that passes with the principal property upon sale or transfer.”

In Sec. 2267.002, SB 1048 also uses the term ‘public purpose’ (which could mean a shopping mall) as opposed to the stricter ‘public use,’ to ensure the taking through eminent domain is for a legitimate public necessity). Texans hold private property rights sacred, and these bills will throw gasoline on the Trans Texas Corridor fire that lawmakers are attempting to convince constituents has been extinguished. Kolkhorst’s TTC repeal bill, HB 1201, passed both chambers but will Perry sign it?

So Texas lawmakers are basically granting government a blank check to trample on property rights and pick winners and losers — who will lose their land to benefit another, not for matters of public necessity. If the government can steal your land, it’s tantamount to stealing your wealth. Who said Republicans aren’t socialists? PPPs are just the sort of wealth redistribution they like — giveaways to their cronies and special interest friends. Democrats also like PPPs because it gives government more power. PPPs are a BIG step in enacting the U.N.’s Agenda 21 policies whose stated goal is to abolish private property and restrict mobility.

Sweetheart deals, government-sanctioned monopolies
Michelle Malkin called PPPs corporate welfare. Fannie Mae and Freddie Mac were PPPs, which required massive taxpayer bailouts.

PPPs socialize the losses and privatize the profits that amount to horrible public policy. Such contracts are sweetheart deals that eliminate competitive bidding and grant government-sanctioned monopolies (with guaranteed profits) to the well-connected.

Public interest not protected, kept secret
These contracts can be negotiated in SECRET, without financial disclosures (like financing, the structure of the ‘user fees’ or lease payments, viability studies, public subsidies, or whether or not it contains non-compete clauses or other gotcha provisions). There is no meaningful public access to PPPs before they’re signed, and the few guidelines created simply exist to advise governmental entities outside the public purview.

Corporations granted power to tax
Sec. 2267.057 of SB 1048 allows a private entity “to collect lease payments, impose user fees.” This means a private entity will have the power to levy a tax. Ditto for PPPs for highways.

The public cannot pressure nor hold accountable a private corporation if the ‘fee’ or ‘tax’ is too high. PPPs are the marriage of the corporation with the state and grants monopolies to private entities for a private rather than a public benefit. Such deals also violate the public trust and the fiduciary duty of lawmakers to protect Texas taxpayers. It’s piracy of the public’s assets, and state lawmakers of BOTH parties passed these bills by huge margins, effectively selling off what doesn’t even belong to them — our roads and infrastructure belong to the PEOPLE of Texas.

SB 1048 & HB 2729 include the sale of schools and public hospitals, and since PPPs grant private, even foreign, corporations a right to operate and maintain the “asset,” it grants authority to privatize the public sector workforce now in place. Now decisions will be made based on private profits, not the public interest.

Tolls in perpetuity comin’ your way
Tolling authorities got their every wish granted this session under the moniker of ‘local control.’ Two bills in particular, HB 1112 and SB 19, 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. 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, and such risky multi-leveraged debt also means Texans will be tolled in perpetuity by un-elected boards (with the exception of El Paso’s tolling authority board), making it one of the most anti-taxpayer bills of the session.

SB 19 by Sen. Robert Nichols, known as the ‘primacy’ bill, gives 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. These effectively grant a limitless power to tax to UN-elected toll entities.

Robin Hood tax grab
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, though Sen. Chris Harris advanced a Constitutional amendment, SJR 13 (which died in the Calendars Committee in the House), to change that.

Toll authorities even got the right to conduct their own environmental studies, which is like the fox guarding the henhouse, ensuring the preferred alternative is always a toll road, not a free road.

No sunset on what’s wrong at TxDOT
TxDOT and toll agencies didn’t get left behind in the PPP feeding frenzy. SB 1420, the TxDOT sunset bill, will allow 15 Texas road projects (complete list below) to be sold off to foreign companies, a move Texans persistently and loudly object to. One of the worst parts of the bill aside from ending the ban on various forms of PPPs, are the sweeping changes to the environmental review process. It allows TxDOT to grant local toll authorities environmental clearance under certain circumstances (1- if the project is in a Metropolitan Planning Organization’s plan, 2 – if the Transportation Commission says the project is eligible, or 3 – if the toll entity pays TxDOT for the review), even projects requiring federal review.

The new terms allow TxDOT to enter into an agreement with local toll entities and the Federal Highway Administration (FHWA) where TxDOT does the environmental review on local toll projects, which essentially delegates the environmental clearance to TxDOT if certain terms of that agreement are met (Section 201.753). While TxDOT’s environmental decision still goes to the FHWA for final clearance, basically, the FHWA will simply rubber stamp the determination and review done by TxDOT.

Federal oversight has provided one of the few ways Texans have stopped unwanted toll projects, including the Trans Texas Corridor. TxDOT was caught doing grossly inadequate studies and even fraudulent environmental studies for which TxDOT was eventually prohibited by FHWA from conducting the new environmental review on US 281. So as such a bad actor, TxDOT is the LAST agency that should be given the right to grant environmental clearance for toll projects.

The great property tax heist…for ROADS!
The sunset bill also expands the use of Transportation Reinvestment Zones (TRZs) to heist property taxes to fund transportation projects. Local governments can designate any area it considers underdeveloped a TRZ and raid the anticipated property tax increases to pay for not only transportation, but also virtually anything else government wants to fund as well. TRZs expressly grant governmental authorities to get into the business of economic development, yet another property rights abuse. Don’t count on your property taxes ever being lowered when government can sell bonds dependent on ever increasing property taxes. A stand alone bill with similar language to expand TRZ authority also passed (HB 563 by Rep. Joe Pickett).

All this coupled with the fact that we ended up with a status quo Transportation Commission (NO CHANGE to the governing structure of this rogue agency at all) and few meaningful reforms to TxDOT were adopted (after multiple scathing sunset reviews and audits), the entire session was a transportation-taxpayer nightmare and a special interest dream.

Lawmakers ‘Just Say No’ to Lemonade Stands, Roadside Vendors
After a similar bill died in the Transportation Committee, your local county governments lobbied to ensure passage of HB 1768 that gives counties with a population of 450,000 or more the power to regulate roadside vendors (think taxes or putting you out of business), including the sale of pets, and anything that collects money, even your kid’s lemonade stand! At a time when Texans are looking for additional sources of income to help make ends meet, this is big government overreach when Texans can least afford it. Yet Perry and our politicians keep trying to convince us that Texas is the last bastion of freedom, limited government, and lower taxes!

A few victories
Often a session is characterized more by the bad bills that were stopped versus the good ones that got passed. That’s definitely the case with the 82nd Regular Session. The revolving debt bills, HB 3218 and HB 2802 that were tacked onto the TxDOT sunset bill, were successfully stripped out in conference. While the final repeal of the Trans Texas Corridor finally made it to the Governor’s desk (HB 1201), the passage of SB 1048, HB 2729, and SB 1420 essentially revive a Trans Texas Corridor-style sale of Texas infrastructure through Public Private Partnerships.

Aside from halting the Constitutional Amendment that would have repealed the ban on perpetuities, a bill to install automatic license plate readers in DPS vehicles failed, along with bills to take away lanes open to both autos and bikes and make them bike-only lanes and one to establish police checkpoints to verify auto insurance (‘Papers, pleez’). Then there are the bills to increase the gas tax, one solely dedicated not to building roads but to retiring mounting road debt, that also died. There are too many other bad bills to chronicle here, but for a full list, go the “Grassroots Action Center” at for a comprehensive list.

The message to the grassroots is clear. Sit down, shut up, and hand us your money, your property, and your freedom. When elected officials brazenly thumb their noses at over 100 grassroots groups and fail to even respond to their Open Letter (aside from passing all the legislation they said ‘NO’ to and allowing the bills they did want passed to die), the electorate had better take heed and respond appropriately and demand accountability by getting their pound of flesh at the ballot box. After all, every single one of them is up for re-election next year, thanks to the census and redistricting. Anything less is hazardous to your freedom!

List of Texas highways eligible to be privatized:
(1) the State Highway 99 (Grand Parkway) project (outer loop around Houston through Harris, Montgomery, Liberty, Chambers, Galveston, Brazoria and Ft. Bend counties — click on MAP HERE);
(2) the Interstate Highway 35E managed lanes project in Dallas and Denton Counties from Interstate Highway 635 to U.S. Highway380;
(3) the North Tarrant Express project in Tarrant and Dallas Counties, including on State Highway 183 from State Highway 121 to State Highway 161(Segment 2E);
(4, 5, 6) on Interstate Highway 35W from Interstate Highway 30 to State Highway 114 (Segments 3A, 3B, and 3C); and
(7) on Interstate Highway 820 from State Highway 183 North to south of Randol Mill Road (Segment4);
(8) the State Highway 183 managed lanes project in Dallas County from State Highway 161 to Interstate Highway35E;
(9) the State Highway 249 project in Harris and Montgomery Counties from Spring Cypress Road to Farm-to-Market Road 1774;
(10) the Highway 288 project in Brazoria County and Harris County;and
(11) the U.S. Highway 290 Hempstead managed lanes project in Harris County from Interstate Highway 610 to State Highway 99
(12) the Loop 1 (MoPac Improvement) project from Farm-to-Market Road 734 to Cesar Chavez Street;
(13) the U.S. 183 (Bergstrom Expressway) project from Springdale Road to Patton Avenue;or
(14) a project consisting of the construction of: the Outer Parkway Project from U.S. Highway 77/83 to Farm-to-Market Road 1847; and
(15) the South Padre Island Second Access Causeway Project from State Highway 100 to Park Road 100.

Lessons from South Bay Expressway bankruptcy

Link to article here. FYI, Robert Poole is one of the top players that lobbies for public private partnerships (PPPs) that socialize losses and privatize the profits. So in his essay, he tries to defend the indefensible and tries to say there were no taxpayer bailouts. Really? How do you explain the nearly $80 million loss of taxpayer money on the portion of the taxpayer-backed federal TIFIA loan that won't be repaid? Taxpayer beware!

Lessons from bankruptcy of South Bay Expressway

By Robert J. Hawkins

10:17 a.m., May 27, 2011

The South Bay Expressway continues to be held up as an object lesson for those thinking of entering into private-public partnerships for highway projects -- make that toll-road projects.

The latest is from Bob Poole, director of transportation policy for the Reason Foundation.

Poole asks the obvious -- and it seems, nearly inevitable -- question: "What happens if the owners of the private toll roads go bankrupt?"

He cites the $2 billion Clem Jones Tunnel project in Brisbane, Australia and the South Bay Expressway in San Diego County.

In both cases the heavy-duty bank investors get priority over all other claimants -- but even they get the short end of their original investment. Some get nothing for their troubles.

In both cases, the highway projects kept running through bankruptcy and reorganization, notes Poole.

Here's how Poole breaks down the local settlement:
"Under the terms of the settlement, owner Macquarie lost all its $150 million equity investment. A group of 10 banks that held $363 million in debt settled for $210 million in new loans (58 percent of the previous amount) and a 68 percent ownership stake. The federal TIFIA (Transportation Infrastructure Finance and Innovation Act) program, suffering its first-ever default, wrote down its $172 million loan to $93 million, while gaining the remaining 32 percent ownership stake."

Poole's conclusion?

Toll projects are risky ventures.

"The best way to deal with that riskiness," he writes, "is to shift it from general taxpayers to sophisticated investors who are prepared to balance the occasional loss in exchange for solid long-term returns in other cases."

You can read Poole's entire essay here.

Transportation bills that threaten prosperity, freedom

Link to article here.

Note how the bills that raise your tax on driving to 75 cents a mile (private toll roads) are soaring through, but bills to dedicate existing taxes (vehicle sales taxes) to roads so your roads don't have to be tolled and bills to take tolls off roads when they're paid for got buried in Committee.

Slow legislative session for transportation nonetheless has a few bills worth following in final weeks

Ben Wear: Getting There
Austin American Statesman

Published: 7:12 p.m. Sunday, May 8, 2011

Back in 2007, when the Legislature was about to have its biennial 140-day talkanalia, I thought it probably would be a low-key session for my beat. After all, lawmakers had passed a huge transportation bill in 2003, and then a fairly large follow-up bill in 2005.

Not much was likely to happen. Boy, was I wrong.

The new Senate transportation chairman that January called for the Texas Transportation Commission chairman to step aside; Houston lawmakers turned on the Texas Department of Transportation for bigfooting them on some huge tollway projects; Dallas senators were mad at the agency about another toll road deal; and rural folks wanted to drive a stake into the heart of the Trans-Texas Corridor. Holy Hades — and big changes — ensued.

I had the same feeling this session, that transportation would take a back seat to the state's ailing budget and redistricting. I wasn't wrong this time. About the biggest thing to happen in transportation this time — $19.5 billion big, as I reported last week — is that TxDOT's budget may grow by 23 percent, while the rest of state government is checking vending machines for spare change.

With three weeks remaining in the 82nd Legislature, here are the transportation bills that are cooking and cooling.

TxDOT sunset and private tollway leases. Senate Bill 1420 is headed to a House-Senate conference committee laden with dozens of amendments tacked on in the House.

Most prominently, the bill would authorize private concession agreements for about 20 specific tollway projects across the state, including MoPac Boulevard (Loop 1) managed lanes north of the river and U.S. 183 in East Austin.

Those long-term leases with private companies were part of the huge stir in 2007, when legislators banned most of them. They've had a change of heart, and this bill probably will go to Gov. Rick Perry with those roads still in it. What it won't have, after both chambers rejected the idea, is a single transportation commissioner to replace the existing five-member commission appointed by the governor.

Full speed ahead. House Bill 1353, which would allow TxDOT to set 75 mph speed limits on rural highways in about 150 counties where the maximum is now 70 mph and would do away with the lower speed limits at night and for trucks, probably will pass the Senate this week. I'm told the Senate probably will leave it unchanged from the House version, sending it to Perry.

As for the ballyhooed 85 mph speed limit bill, which in fact would apply only to the second phase of Texas 130 under construction southeast of Austin (and would remove the Trans-Texas Corridor from the statutes), it passed the House and is now pending in a Senate committee. Hard to say what its fate will be.

Big (borrowed) bucks. The Senate's version of House Bill 1, the 2012-13 state budget bill, has $3.2 billion more in it for TxDOT than what the House approved late last month. It appears that the Senate budget figure — the difference is made up almost entirely of money that would be borrowed and paid back from the state's general fund over 30 years — has a good chance of prevailing.

Capital Metro labor. Senate Bill 650, which among other elements would force Austin's transit agency to contract out all bus and rail service, or make all workers full-fledged agency employees, has passed the Senate and a House committee and is awaiting a spot on the House calendar for action. Either option, which would eliminate Capital Metro's subsidiary-faux-contractor StarTran, would save the agency millions of dollars a year, according to a recent agency report. The bill stands a good chance of passage, which would force a hard choice on the Capital Metro board that it has shied away from making on its own.

Buses on MoPac shoulders? Maybe not. Senate Bill 1102, which would allow transit buses to skirt traffic congestion by using highway shoulders on certain freeways in Travis and a few other counties, is awaiting action by the Senate as a whole. But it has fallen off the Senate's calendar for debate. With time short and a variety of legislative deadlines looming, the bill could be in trouble. Perry vetoed a similar bill two years ago, citing safety concerns, but supporters have added training and public awareness requirements this time to address his concerns.

Also in trouble. Idling on various lower rungs of the legislative ladder, and thus unlikely to become law, are bills that would: completely ban converting free lanes to toll lanes (it can be done with a public vote now); prohibit selling devices to jam police radar; divert various fees to a now-empty "rail relocation and improvement fund" (to move freight lines outside urban areas) that voters created several years ago; require that revenue from the 6.25 percent state sales tax on vehicle purchases, about $2.5 billion a year that now goes to the state's general fund, instead go to TxDOT for highway work; allow counties to have local elections to raise fees or taxes for local transportation projects; and require toll roads to become free roads once the bonds sold to pay for construction have been paid off.

Taxpayers get shafted in bankrupt San Diego tollway

Link to article here.

Last year when we found out this PPP tollway went bankrupt, we predicted the taxpayers would NEVER get repaid for the federal TIFIA loan given to this private company, sadly, we were right. This is why we have got to STOP these public private partnerships....they socialize the losses and privatize the profits. The private banks got repaid, but taxpayers didn't. This is OUTRAGEOUS!

Trend in the Region

Tollway Exits Chapter 11

TIFIA Ends Up Taking a Haircut

Friday, May 6, 2011

By Randall Jensen
The Bond Buyer

Related Stories

California P3 Files Chapter 11 - March 30, 2010
New P3 Toll Road Opens - November 15, 2007

SAN FRANCISCO — At its inception the South Bay Expressway toll road was promoted as a model public-private partnership. It took ages to build, then quickly plunged into bankruptcy.

The 10-mile tollway in southern San Diego County exited from bankruptcy last week, leaving its ownership in the hands of senior creditors, one being the federal government, which took a 42% haircut.

South Bay Expressway LP filed for Chapter 11 bankruptcy in March of last year in the Southern District of California, citing construction delays and costs, litigation with its contractors, and economic fallout from the housing and credit markets that cut into traffic.

The expressway cost $635 million to build, according to the Federal Highway Administration.

The South Bay Expressway was billed as a way of using government funds to attract private investment in an effort to off-load some of the risk. It was one of two P3 projects built under legislation California approved in 1989, when George Deukmejian was governor.

Former Gov. Arnold Schwarzenegger renewed the push for P3s after taking office in 2003. The project farthest along is a reconstruction of t he Presidio Parkway Project in San Francisco.
The company that operates the South Bay Expressway saw its bankruptcy exit plan confirmed in federal court after getting support from secured creditors on April 29.

“It feels good to have emerged now,” said South Bay Expressway chief executive officer Greg Hulsizer. “The court was very good to us during the year that we were working our way through Chapter 11, in that we were able to continue our regular operations.”

The main settlement provides a group of 10 banks, including Spanish Bank Bilbao Vizcaya Argentaria and Irish bank Depfa, that held $363 million of the expressway’s debt prior to bankruptcy, with $210 millionofn new senior loans and a 68% stake in the toll road.

The road’s initial financing structure also included one of the first loans from the U.S. Department of Transportation under the Transportation Infrastructure Finance and Innovation Act of 1998.

The DOT, the second largest creditor with $172 million in TIFIA loans including interest, will get $93 million in new senior debt and $6 million in equity, according to a fact sheet posted on the FHA website. Itwill own 32% of the company, and share any surpluses with the other new owners, as well as any equity distributions.

The expressway borrowed $140 ­million through TIFIA in 2003, a figure that grew to $32 million because of capitalized interest. Interest payments on the 4.46% TIFIA loan had been scheduled to start in 2012 and principal payments in 2021.

“The department’s primary goals in arriving at an agreement were to ensure the good stewardship of taxpayer dollars by maximizing the potential recovery of the TIFIA loan and to maintain the road open for the traveling public,” DOT spokeswoman Nancy Singer said in an e-mail. “TIFIA continues to fill a vital role in advancing critical surface transportation projects.”

Demand for TIFIA loans has risen over the last couple of years amid falling Treasury rates and more expensive private-sector financing.

The toll road received 62 claims totaling more than $1 billion during the bankruptcy, many of which it claimed were invalid, according to court filings.

The South Bay Expressway was also able to settle several lawsuits before the confirmation hearings, including litigation with its primary contractors.

It also settled litigation with the California Department of Transportation and the San Diego Association of Governments. Caltrans had leased the right-of-way to the expressway when it was completed in 2007 and helped with upkeep of the toll road.

Caltrans gave the company a 35-year franchise agreement to recover investment by setting toll rates.

“The state of California is gratified that this matter was resolved amicably,” Caltrans director Cindy McKim said in an e-mailed statement. “This project resulted in a key 11-mile freeway connector being built, a project that was only completed because private funding was available.”

The next step for South Bay Expressway appears to be a sale.

The toll road has been in talks with the San Diego Association of Governments about a sale after the agency that represents 18 cities and governments in the region expressed interest in the deal, according to Hulsizer.

Hulsizer said other private entities have also expressed interest but added that he could not elaborate.

California awarded the franchise for the toll road in January 1991. But construction of the road, which extended State Route 125 to the Mexican border at Otay Mesa, was stalled for years as builders sought environmental permits.

The permits came in 2003, shortly after Australia’s Macquarie Infrastructure Group acquired a controlling interest in the concessionaire in 2002.

Macquarie wrote its investment in 50% of the expressway’s equity in the toll road down to zero in June 2009. The equity investors were wiped out in the bankruptcy.

The project included a $20 million environmental program that involved the purchase of 1,000 acres of land to be used as an open-space preserve.

One of the most significant features of the expressway is the Otay River Bridge, one of only two precast segmental bridges in the state, stretching three quarters of a mile and towering 18 stories high.

The highway did not open until November 2007 — just in time for the subprime mortgage market to unravel, taking a major toll on the suburban communities the expressway was built to serve.

Things are starting took look up, ­according to Hulsizer, in the form of year-over-year growth and a strong customer base.

“Now that our capital base is restructured, we are looking pretty solid going forward,” he said.

However, Hulsizer said the region must see a significant drop in its unemployment rate and a big rise in new housing and development before the toll road experiences strong growth.

The South Bay Expressway recorded $21 million in revenues by the end of fiscal 2009, resulting in $3 million in earnings before interest, taxes, depreciation and amortization.

By the time it went bankrupt, the tollroad had $640 million in assets and $570 million in liabilities, according to court documents.

TxDOT overhaul advances in TX legislature

Link to article here.

Texas transportation overhaul bill advances

By Keith Goble, Land Line state legislative editor

May 4, 2011

A major transportation bill nearing passage in the Texas Legislature includes provisions to overhaul the Texas Department of Transportation, authorize private toll roads, transfer permitting for oversize and overweight vehicles, and restrict use of ticket cameras.

House lawmakers voted 121-24 on Monday, May 2, to approve the bill after discussing more than 100 amendments. SB1420 will now go before a conference committee made up of select members from the House and Senate to hash out differences in the bill.

If the chambers reach agreement on the provisions in the bill, it would advance to the governor’s desk.

The “sunset” legislation authorizes a review of TxDOT every four years.

The Texas Transportation Commission would also get a makeover. The five-member board has the final say on which roads to build, which companies to hire, and which policies to set for the agency.

Instead of the highway chiefs being appointed solely by the governor, one would be recommended by the House speaker, and one would be appointed by the lieutenant governor.

Most Texans credit those commissioners with starting the state down the path toward toll roads.
Other changes would include the following: having an inspector general appointed to offer independent scrutiny of operation; firing employees found to have lobbied the Legislature; and creating a 20-year transportation plan.

Changes have been sought for the past few years in retaliation for the board turning a deaf ear to public sentiment about the Trans-Texas Corridor, which was the controversial pet project of Gov. Rick Perry. At one time the corridor plan called for private contractors to build and operate billions of dollars of toll roads in the state.

The Owner-Operator Independent Drivers Association has criticized the corridor plan since it was unveiled in 2002. The Association cited reasons that included the proposed toll rate of 50 cents per mile for large trucks.

Rep. Jodi Laubenberg, R-Rockwall, lauded the transparency created by the bill.

“Any tools we can give citizens to help hold government entities accountable is good policy,” Laubenberg said in a statement.

Rep. Rafael Anchia, D-Dallas, said he welcomes the changes to TxDOT included in the bill; however, more still needs to be done.

“Additional state scrutiny of the agency is definitely warranted,” Anchia stated.

A separate provision in the bill would allow about 20 private toll roads to be built. The so-called comprehensive development agreements would include work on a 28-mile segment of Interstate 35 East between Interstate 635 and U.S. 380; a nine-mile portion of state Highway 183 between state Highway 161 and I-35 E; five segments of the North Tarrant Expressway project; and the Grand Parkway, state Highway 99, in Houston.

Opponents say the state should not give up control of its roads to corporate interests, which often are foreign-owned.

“I think it’s a fragmented approach to how we deal with what our needs are for the state,” Rep. Yvonne Davis, D-Dallas, told lawmakers during floor consideration. “It just looks pretty shabby.”

Another provision calls for shifting from TxDOT to a new Texas Department of Motor Vehicles the permitting for oversize and overweight vehicles. The transfer would include all personnel and other functions associated with regulating oversize and overweight vehicles.

TxDOT would continue to be responsible for determining routes for affected loads.

Also included in the bill is a provision to prohibit ticket cameras on state roads, unless approved after a public hearing. Towns with fewer than 40,000 residents would be forbidden to use the technology to issue tickets.

To view other legislative activities of interest for Texas, click here.

– By Keith Goble, state legislative editor

Editor’s Note: Please share your thoughts with us about the legislation included in this story. Comments may be sent to This email address is being protected from spambots. You need JavaScript enabled to view it..

Copyright © OOIDA

Feeding Frenzy: Texas House makes a mockery of TxDOT Sunset Review

Friday, the Texas House passed the Texas Department of Transportation (TxDOT) Sunset Bill, substituting the House language for the Senate bill,  SB 1420. The biggest news is that this bill will revive parts of Trans Texas Corridor TTC-69/I-69 and that the House made virtually no change to the way TxDOT is governed -- a status quo five member appointed commission, after a long string of scathing reviews and audits. The only change was allowing the Lt. Governor to appoint one and the Governor to choose one from a list provided by the Speaker. Even the addition of the Inspector General was watered down from he/she ‘shall’ report suspected illegal activity to law enforcement to ‘may.’

Despite the author’s insistence that in no way does the bill revive the Trans Texas Corridor, the House indeed adopted multiple amendments that would allow portions of the Trans Texas Corridor TTC-69/I-69 project, now referred to as the innocuous I-69, to be built as a foreign-owned toll road controlled by private developers.

Trans Texas Corridor sneaks by without the name

Of course, politicians claim it's not (the Trans Texas Corridor). They know how radioactive those words are. They think we are too stupid to connect the dots. The proposed Trans Texas Corridor TTC-69/I-69 route (see map) shows several of the projects the House adopted that would sell-off Texas roads to foreign toll operators are indeed Trans Texas Corridor projects.

One of the primary issues 28,000 Texans objected to on TTC-69 was the fact it would sell our public roads to a private, foreign corporation, which involves eminent domain for private gain, a loss control over public infrastructure, non-compete agreements, higher toll rates, profit guarantees, public subsidies, etc. So while the footprint may not be 1,200 feet wide and the authority not derived from Transportation Code Chapter 227 (but Chapters 370 and 223 instead), the authority for these Trans Texas Corridor projects have been granted in this bill.  It's being done segment by segment as TxDOT announced it would pursue.

"Major corridor projects will now be comprised of several small segments closer to 600 feet wide and will no longer be called the Trans-Texas Corridor. Instead, the department will use the highway numbers originally associated with each segment, such as I-69, SH 130 and Loop 9." (Source:

A Spanish company, ACS (who partnered with Zachry), already bid on some of these same segments in the Valley under a prior proposed public private partnership (or PPP called CDAs in Texas) which expired in October of last year (see press release here). ACS/Dragados states the: “The I-69/TTC (Trans Texas Corridor) will connect the Mexican border with the Gulf of Mexico coastline, Houston and major industrial and logistics centres in Texas with the north of the country.” So many of the projects in the list of CDAs make these logistics and port connections.

Selling Texas to special interests

I knew they were going to sell-out Texas when they adopted Alonzo’s amendment right out the gate that allows TxDOT to hire an ‘emerging fund’ manager. So we’re firing teachers over our state’s fiscal crisis, but hiring ‘emerging fund managers’ that specialize in juggling multi-leveraged debt, high finance accounting tricks, and private equity deals that sell our Texas roads to foreign companies. Those are the priorities of the Texas House.

These fund managers are the very same people responsible for the subprime mortgage crisis and the financial meltdown in Greece. The GOP dominated Legislature has become a wholly-owned subsidiary of special interests, not the people’s representatives and guardians of the public interest.

Over 100 amendments got tacked onto what is supposed to be a TxDOT reform bill. Based on its actions Friday, the priority of this Legislature is not fixing an agency run amok, but rather handing Texas’ roads to private, foreign corporations using concession CDAs that will greatly increase taxes on driving. Even worse, it places the power to tax in the hands of private corporations that taxpayers cannot hold accountable. With toll rates of 75 cents a mile, it’s like adding $15 to every gallon of gas you buy.

Rep. Larry Phillips’ HB 2255, was adopted in amendment form and became the primary amendment that lumped all the CDAs into one place to privatize and toll what began as 11 different Texas highways from DFW to the Valley, but then legislators engaged in a feeding frenzy and starting adding project after project once they saw Phillips had the votes.

House ‘made a mockery’ of TxDOT review

It was like watching kids in a candy store, giddy to sell-off Texas to the highest bidder and get to be the next one to do it. The Texas House made a mockery of TxDOT sunset review process. What they did was a disgrace and makes me ashamed to be a Texan.

Andy Hogue of the Lone Star Report reported: “ became a free-for-all, as legislators lined up to add their own projects to the list of approved CDAs. Five were approved, before Rep. Lois Kolkhorst asked if her colleagues were ‘adding all the highways in Texas’ to the list.”

Rep. Yvonne Davis attempted to sober-up her colleagues at the end saying she was ‘embarrassed,’ and that the way they had conducted themselves was not ‘honorable.’ She chided them that they were misleading the public as to what they were really doing. Davis tacked on an amendment to ensure none of the CDAs could be done with authority from the Trans Texas Corridor chapter of the Transportation Code (Chapter 227), though any CDA authority will lead to essentially the same outcome.

Phillips’ Amendment #90 eventually lumped in George Lavender, Eddie Lucio III’s, and amendments that will revive segments of the Trans Texas Corridor TTC-69/I-69 in East Texas and down in the Valley, bringing the grand total to 20 projects before the pandemonium came to an end. The vote to adopt CDAs was 109-27 (1 present not voting, 13 absent). Authors of the other CDA amendments whether stand alone or under Phillips’ amendment #90 were: Allen Fletcher, Mike Hamilton, Linda Harper-Brown, Tan Parker, and Randy Weber.

“This is a tax bill,” said Kolkhorst in Friday’s Quorum Report. “When you put CDAs on there, it is a tax bill, there’s no doubt about it. All those people who voted against fees? This is a fee bill.”

Kolkhorst remained a stalwart against PPPs and led the fight against them on the floor. She won a round, 69 Nays to 65 Ayes, to shoot down design-build CDA authority for Regional Mobility Authorities (contracts that also eliminate competitive bidding like concession CDAs, but stop short of giving the private entities a leasehold and the right to collect tolls), only to have Phillips, author of HB 2574 that he made into Amendment #67 to the sunset bill, take it up for reconsideration and got it attached (by a vote of 109 to 36) the second try after significant lobbying of urban legislators on the floor.

This is what makes voters’ stomachs turn - when the bad guys don’t like the result of the vote, they just keep bringing it to a vote until they win.

House members embrace revolving DEBT BOMB

At least two other major pieces of controversial legislation were adopted in the sunset bill, one by Phillips which is his bill HB 3218 that involves the State Infrastructure Bank (SIB) and multi-leveraging of taxpayer money being loaned to subsidize both public and private toll roads for which the taxpayer will pay back their own money with interest through tolls. It also allows the SIB to guarantee the toxic debt that private bond investors won’t touch -- in the same way Fannie Mae and Freddie Mac gave home loans to those who didn’t have the ability to pay it back.

The other was HB 2802 by Rep. Joe Pickett that establishes a ‘revolving fund’ using Texas Mobility Fund, Prop 12 and Prop 14 revenues, most of which is borrowed money, and would involve using borrowed money to pay-off and secure more borrowed money. The bill analysis for the revolving fund said it seeks to “mitigate certain project financial risks” and loan money to toll entities who are having trouble securing financing at a reasonable rate. That’s code for private muni bond and toll revenue bond investors aren’t willing to risk their capital on loser toll projects so lawmakers want to risk the taxpayers money to subsidize the toxic debt for toll projects that have no business being built as toll projects.

Mark my words, this will come back to bite us. Politicians are playing games of high finance with other people’s money and we know from experience who loses in the deal...the taxpayers. They’ll be coming to us with draconian tax hikes or asking for an infrastructure bailout or both. It’s not a matter of if, but when.

Sends wrong signal to a rogue agency

The Sunset Committee Advisory Report said: “The Sunset review of the Texas Department of Transportation (TxDOT) occurred against a backdrop of distrust and frustration with the Department and the demand for more transparency, accountability, and responsiveness. Many expressed concerns that TxDOT was “out of control”...Sunset staff found that this atmosphere of distrust permeated most of TxDOT’s actions and determined that it could not be an effective state transportation agency if trust and confidence were not restored. Significant changes are needed to begin this restoration; tweaking the status quo is simply not enough.”

This coupled with a scathing 628 page management audit that revealed deep-seated, structural problems in every department division with TxDOT, it’s inexplicable that our legislators are essentially giving this agency a free pass to keep putting the screws to the taxpayers with their unpopular privatized toll road network that are rife with eminent domain abuse and a loss of sovereignty over Texas infrastructure that will cost Texans dearly to move about this state.

The abuse of property rights, the punitive level of taxation, the reckless disregard for the public interest just to get a road built, and the special interest giveaways are simply staggering.

God help Texas if this bill becomes law.

TURF is urging Texans to contact their state lawmakers at (512) 463-4630 to remove CDAs and these controversial debt/loan provisions from the bill and to focus on fixing the highway department.

Complete list of Texas roads eligible to be sold off to private corporations:

(1)  State Highway 99 (Grand Parkway) project (loop around Houston);

(2)  the Interstate Highway 35E managed lanes project in Dallas and Denton Counties from Interstate Highway 635 to U.S. Highway 380;

(3) North Tarrant Express project in Tarrant and Dallas Counties - State Highway 183 from State Highway 121 to State Highway 161 (Segment 2E);

(4, 5, 6) North Tarrant Express project in Tarrant and Dallas Counties  - Interstate Highway 35W from Interstate Highway 30 to State Highway 114 (Segments 3A, 3B, and 3C);

(7) North Tarrant Express project in Tarrant and Dallas Counties  - Interstate Highway 820 from State Highway 183 North to south of Randol Mill Road (Segment 4);

(8) State Highway 183 managed lanes project in Dallas County from State Highway 161 to Interstate Highway 35E;

(9) State Highway 249 project in Harris and Montgomery Counties from Spring Cypress Road to Farm-to-Market Road 1774

(10) Loop 1 (MoPac Improvement) project from Farm-to-Market Road 734 to Cesar Chavez Street;

These projects were added in the feeding frenzy

(11) Highway 288 project in Brazoria & Harris Counties (this coupled with TTC-69/I-69 projects means many connections to our ports and major logistics centers in the Valley and around Houston will be controlled by private, foreign companies, not Texans)

(12) Managed lane improvements to the Grayson County Tollway project, an extension of the Dallas North Tollway in Grayson County

(THIS ONE IS A DUPLICATION OF #10 above) Loop 1 (MoPac Improvement) project from Farm-to-Market Road 734 to Cesar Chavez Street

(13) the U.S. 183 (Bergstrom Expressway) project from Springdale Road to Patton Avenue.

(14) Managed lane improvements to the U.S. Highway 290 Hempstead managed lanes project in Harris County from Interstate Highway 610 to State Highway 99

Trans Texas Corridor TTC-69/I-69 Projects

(15) Outer Parkway Project from U.S. Highway 77/83 to Farm-to-Market Road 1847;

(16) the South Padre Island Second Access Causeway Project from State Highway 100 to Park Road 100; or

(17) a project identified as part of the Hidalgo County Loop System or the La Joya Bypass project.

TTC-69/I-69 Projects added in feeding frenzy

(18) State Highway 550 from U.S. Highway 77/83 to State Highway 48.

(19) The Interstate Highway 69 project in Bowie County from the Sulphur River Bridge to Interstate Highway 30 (see the north-east end of the TTC-69/I-69 map - This uses very vague language, presumably because it will convert parts of the existing right of way of Hwy 59 into TTC-69/I-69 and make it a foreign-owned toll road without saying so. Hwy 59 is the new identified route for TTC-69/I-69 in northeast Texas)

(20) Managed lane improvements to the Interstate Highway 69 project from Interstate Highway 10 to the Tyler County line (northward logistics connection from SH 69 in Beaumont east of the Port of Houston to Tyler County which eventually connects up to Hwy 59 near Lukfin, which is slated to be upgraded to I-69)

Flap over speed limits in Trans Texas Corridor repeal

Link to article here.

85 mph flap much ado about Texas 130

Ben Wear: Getting There

Published: 7:19 p.m. Sunday, April 17, 2011

You may have heard or read that the Texas House this month passed a bill that would create an 85 mph speed limit on Texas highways. The widely misreported news sparked unsettling images of SUVs barreling down U.S. 183 or Interstate 35 at 90 or more, given the general assumption that people tend to drive a few miles per hour over the posted limit.

T'ain't so.

What the House did — and who knows if the Senate and Gov. Rick Perry will go along in the coming weeks? — was allow the possibility of an 85 mph speed limit on what amounts to one road. Which isn't open yet. And, oh, by the way, Texas law already allowed that speed on that road.

That highway, it's worth knowing, is here in Central Texas: the southern 40 miles of Texas 130, which has been under construction for a couple of years between Mustang Ridge and Seguin and should open in late 2012.

Actually, the real purpose of the legislation that started all this — House Bill 1201, by Rep. Lois Kolkhorst, R-Brenham — is to drive a final stake into the already inert heart of the Trans-Texas Corridor. The governor, the Texas Department of Transportation and the facts on the ground already have made it obvious that Perry's one-time plan for 4,000 miles of tollways, railroads and utility lines is deader than disco.

Multiple references to the corridor plan still exist in state law, though, and Kolkhorst, who represents an area that was a hotbed of opposition to Perry's corridor brainchild, wants that language gone. But those statutes also include authorization to slap an 85 mph speed limit on any Trans-Texas Corridor road, and officials assumed all along that the new portion of Texas 130 would be designated a part of the corridor.

This is no small financial matter to the state. Its contract with a consortium led by Cintra, a Spanish toll road company that is building and will operate (and, it hopes, profit from) that section of Texas 130 for the next half-century, specifies that TxDOT would get an extra $67 million if the speed limit is 80 mph. Set the limit at 85 mph, and that premium rises to $100 million. TxDOT would have six months from when the road opens to set those higher limits or lose the chance to get that extra money.

The logic is that a faster speed limit, which only the Texas Transportation Commission can authorize, will draw more toll-paying drivers to the road and thus increase Cintra's revenue. Ergo, the state should get some of that bonus cash.

Kolkhorst's bill would let TxDOT adopt that higher speed limit, but only on roads completed after May 31 this year that are specially designed to accommodate those extreme speeds. Which means the roads, among other elements, must be flatter, straighter and better banked in curves than a normal freeway.

The bill goes on to require TxDOT, in order to exceed the "normal" rural freeway speed limit of 70 mph, to conduct studies showing that the bulk of cars are already going faster than the existing limit. The logic is that people, absent the heavy-duty presence of state troopers handing out tickets, tend to drive at speeds appropriate to the road design and amount of traffic.

In other words, you could set a 70 mph speed limit on Lavaca Street downtown, and still the overwhelming number of people probably would never go faster than, say, 45. Or you could tell people the limit on empty and flat Interstate 10 near Ozona is 70, and people would still tend to go something close to 80. Actually, the limit in that section of I-10 is 80 mph already, thanks to legislation passed several years ago.

As for the idea that if you set the limit at 85, people 
will go a death-defying 90, TxDOT officials say that their studies, after I-10 from Kerr County west got that 80 mph limit, showed that 85 percent of drivers were going 81 mph or less. Yes, you could go 85 and probably not get a ticket. But most people had decided on their own that 80 was quite fast enough.

The kerfuffle over Kolkhorst's bill has obscured another bill that would make a much more meaningful change. HB 1353 by state Rep. Gary Elkins, a Houston Republican, would raise that general 70 mph highway limit to 75, and there would no longer be a 5 mph lower nighttime speed limit. That bill has motored through committee and is awaiting a final vote of the House as a whole.

People with safety and gas-guzzling concerns about high speeds should probably be fretting over this bill, not Kolkhorst's handiwork.

Lawmakers to sell TX highways to Spain?

Link to article here.

Though Vic Suhm of the Tarrant Regional Transportation Coalition claims there's no public money in these privatized toll deals called public private partnerships (PPPs), there most certainly is -- they use BILLIONS in public money. See how the North Tarrant Express (I-820) and LBJ private toll deals are financed here (See page 2).

Texas likely to expand authority to lease highways to developers

Posted Friday, Apr. 22, 2011

By Gordon Dickson, Ft. Worth Star Telegram

This email address is being protected from spambots. You need JavaScript enabled to view it.

AUSTIN -- Lawmakers expect to expand the state's authority to lease out highways to developers -- often foreign companies -- for up to 52 years, despite lingering opposition from some Texans.

A handful of bills on the subject could have huge implications for Dallas-Fort Worth, where some of the first such development deals in the U.S. were signed for projects like the $2.5 billion North Tarrant Express, which will overhaul Northeast Loop 820 and Texas 121/183 in Northeast Tarrant County. Now, Metroplex officials want to expand that project to include Interstate 35W in Fort Worth.

Developers have also been awarded the $2.7 billion project known as LBJ Express -- the construction of toll lanes under Interstate 635 in Dallas. It's a trend that worries residents who object to corporations controlling roads and keeping the tolls from them.

"Here in a session where we have a committee on state sovereignty talking about how we're going to throw off the federal government and exercise state rights, we're at the same time losing our sovereignty over public infrastructure, handing over highways to foreign contractors and handing Texas back to Spain," said Terri Hall, founder of Texans Uniting for Reform and Freedom.

Hall's group rose to prominence several years ago as Texans rejected Gov. Rick Perry's plan to build a $178 billion toll road network known as the Trans Texas Corridor.

But among lawmakers, the vitriolic opposition to privatization that dominated previous sessions seems to have calmed.

Immersed in attempts to fix the state's budget crisis, elected leaders say that they realize that where local support is broad, it's appropriate to allow the Texas Department of Transportation to turn over projects to outsiders in the form of comprehensive development agreements.

"We're going to get some authorization for CDAs," Lt. Gov. David Dewhurst told the Star-Telegram this week. "Texas has done CDAs, and by and large these have been well-received."

Other candidates for development: Interstate 35E in Denton County and Texas 183 in Irving.

Reluctant support

Sen. Wendy Davis, D-Fort Worth, authored a bill that would expand North Tarrant Express to include I-35W, Texas 183 from Texas 121 in Bedford to Texas 161 in Irving, and East Loop 820 from North East Mall to Randol Mill Road.

"They [lawmakers] are resigned to the fact that at this point a funding mechanism for transportation has not been created, and in limited instances they're willing to accept comprehensive development agreements," Davis said.

Long-term, lawmakers are realizing that once they've solved the budget crisis and settled the redistricting issue, a conundrum is looming over how to pay for the next generation of Texas roads, Dewhurst said.

"For 2014 and 2015, I want to work to increase the different sources of funding so we can continue to build the roads we need to reduce congestion," he said. "No one wants to see free roads tolled, and we're not going to do that. They want to see us fund the essential services."

For 2012-13, he said, the plan is to allow a small number of development agreements and make available $8.1 billion for new road work, construction, maintenance and right of way -- including gas taxes, vehicle registration fees and the remaining $3 billion in Proposition 12 funding approved by voters in 2007. Proposition 12 allows the state to issue debt and repay it over the long term with general revenue.

Several other senators have filed separate bills for each project they wish to build with a development agreement, with most of the projects in North Texas and Houston. Rep. Larry Phillips, R-Sherman, the House Transportation Committee chairman, has filed a single bill with multiple projects -- setting the stage for a debate in the next few weeks.

Some lawmakers are expressing concerns about a lack of competitive bidding for privatized projects. Once a developer is selected as the "best value," the developer has the latitude to hire and make purchases beyond what's normally allowed in bidding laws.

Foreign roots

The team of companies building the North Tarrant Express project is known as NTE Mobility Partners. It includes: Cintra U.S., a huge toll road development corporation from Spain; Meridiam Infrastructure, an investment firm from France; and the Dallas Police and Fire Pension System, which represents 8,500 public safety employees.

The Transportation Department contributed $573 million in public dollars to the project. Cintra is putting in $427 million of its own equity, $400 million in federally backed private activity bonds and $650 million from a federal transportation infrastructure loan.

The four-year job began late last year. Construction should be in full swing by summer in Bedford, Haltom City and other cities along the 13-mile corridor.

In return for its investment, NTE Mobility Partners keeps tolls collected on the new lanes through 2061.

The project will rebuild existing lanes and add toll lanes so motorists can choose to stay on the main lanes for free or pay to go faster on toll lanes. Tolls will range from $1.20 to $6.50 for the length of the project, fluctuating depending upon traffic conditions.

While most of the companies in NTE Mobility Partners are behind the scenes, the on-site construction leader is Bluebonnet Contractors. Although it has a nice, Texas-sounding name, Bluebonnet is actually made up of Spaniards, including Cintra's parent company, Ferrovial; a U.S. subsidiary known as Ferrovial-Agroman; and Webber Llc.

Webber has four decades of engineering and construction roots in Houston, but it's now a foreign company, too, having been bought by Ferrovial Group in 2005.

That arrangement bothers critics such as Hall, who got involved in transportation issues while fighting a toll project in San Antonio.

"I don't think our legislators have a clue that all these companies are front companies for Cintra," she said.

Supporters of North Tarrant Express say they're comfortable with the arrangement. Many critics don't live near the project and don't fully realize how sorely traffic relief is needed, they say.

"They view it as a situation in which public money is subsidizing private interests, when in fact it's the exact opposite," said Vic Suhm, executive director of the Tarrant Regional Transportation Coalition. "These private investors are walking in with money to finance a project, and they get paid back through toll revenue. In fact, the private people are subsidizing us."

Sell out: House Committee passes bill to hand TX roads to private for-profit corporations

Yesterday evening, the Texas House Transportation Committee passed HB 2255 that would sell-off seven Texas highways to private, for-profit companies in 50 year sweetheart toll road deals, WITHOUT competitive bidding.

Sadly, eight other members of the Committee voted with Phillips against stiff public opposition to HB 2255. They were: Drew Darby, Allen Fletcher, Linda Harper-Brown, George Lavender, Armando Martinez, Joe Pickett, Eddie Rodriguez. Representatives Yvonne Davis voted against, Ruth Jones McClendon was present not voting, and Dennis Bonnen was absent.

Phillips had to withdraw his bill Monday due to objections and concerns by Committee members. He brought it up in Committee again Wednesday morning and several members reluctantly voted for it and several voted against -- it was a picture of chaos as Phillips tried to shore-up his Committee to vote against the taxpayer. At that time, the Committee had not even been furnished with a copy of the substitute bill (he had changed the bill) when Phillips called it up for a vote.

By evening when the Committee reconvened, they were handed the substitute bill moments prior to being asked to vote and Rep. Davis brought up significant issues with the authority granted to TxDOT to remove the requirement of competitive bidding. The North Tarrant Express project involves four highways in Tarrant County and the bill would grant TxDOT the authority to enter into a controversial Comprehensive Development Agreement (CDA also known as a public private partnership) without competitive bidding and allow the initial winning team to get the development rights with a right of first refusal on ALL future projects WITHOUT competitive bidding.

One of the concerns with CDAs is it replaces traditional low-bid, competitive procurement contracts with "best value" bidding rather than requiring the lowest price for the taxpayer, a process open to favoritism and cronyism. Despite Davis' concerns, the Committee passed the bill, casting doubt on the so-called "conservative" credentials of many of its members.


Why we must keep the current BAN on public private partnerships (PPPs), known as CDAs in Texas, in place:

- Grants private, even foreign, entities MONOPOLIES for 50 years
- Means the loss of control over Texas infrastructure & toll tax rates, Texans can’t go to a corporation’s Board of Directors to request relief from high toll rates as they can with elected officials. It’s taxation without representation and the marriage corporations with the State.
- Eminent domain for private gain -- to take private property in the name of a public use then hand it to a private interest, for a private benefit for a HALF CENTURY
- Terms of contract kept secret from the public until AFTER the deal is signed.
- Ends competitive bidding and even grants the initial winning team right of first refusal on all future segments without competitive bidding.
- Limits the expansion of free roads (to guarantee congestion on the free routes)
- Manipulates the speed limits to drive more traffic to the toll road
- Charges toll rates as high as 75 cents PER MILE (these are PUBLISHED rates for both the LBJ & North Tarrant Express CDAs in DFW) or 80 cents per mile (for I-35 according to Denton Record Chronicle, Feb. 13, 2011)
- Puts the taxpayer on the hook for the losses while the private investors are GUARANTEED PROFITS in the contracts
- Allows private corporations the power to tax
- Use massive amounts of public money & debt to subsidize/prop-up toll projects that can't pay for themselves. This model doesn’t remotely resemble the claim that the ‘user’ pays for the road. On two PPPs in DFW, $500 million dollars in gas taxes, and another $1.5 BILLION in PABS and TIFIA loans are subsidizing the LBJ project and $500 million in gas taxes and $1 BILLION in PABS and TIFIA loans are subsidizing the North Tarrant Express.
- Eliminates due process in contesting fees, interest, and penalties, with the possibility of losing your car’s registration for failure to pay what they say you owe

Rep. Larry Phillips' signature issue this session has been to expand TxDOT and un-elected toll authorities' ability to enter into controversial highway contracts and their ability to use risky financing schemes (like using borrowed money to secure more borrowed money, like building roads with credit cards) to toll Texas roadways, even existing roads. The sheer volume of anti-taxpayer legislation coming out of Phillips' Committee is staggering. The public has been undaunted in its opposition to these anti-taxpayer, anti-sovereignty, anti-property rights policies. Now these bills (HB 1112, HB 2255, HB 2475) go before the full House where the grassroots will work to ensure this legislation ends up on the ash heap. The Senate has already railroaded every CDA bill through its Committee.

Trucker group: Kill any attempts to resurrect TTC and PPPs

Texas House OKs 85 mph speeds, wipeout of Trans-Texas Corridor

By Keith Goble, Land Line state legislative editor, April 8, 2011

A bill halfway through the Texas Legislature would authorize the fastest speeds in the nation and put to rest any lingering uncertainty about a proposed superhighway.

Other bills being considered at the statehouse address public-private partnerships to complete road work.

The House voted unanimously Thursday, April 7, to advance a bill to the Senate that would permit the speed limit on certain new roadways to be set at 85 mph. Such authorization would allow drivers to travel faster than anywhere else in the nation.

Speeds of 85 mph could be authorized on highways built after June 1, 2011. The Texas Department of Transportation would be required to perform engineering and traffic studies to determine whether the speed is appropriate.

Texas has more than 520 miles of Interstate 10 and Interstate 20 in west Texas posted at 80 mph during the day for motorists while trucks are limited to 70 mph. Speeds for all vehicles are lowered to 65 mph at night.

Todd Spencer, executive vice president for the Owner-Operator Independent Drivers Association, said the uniformity of speeds is truckers’ primary concern.

“The only speed limit policy that makes sense is to have all vehicles traveling at the same speed,” Spencer said.

A separate provision in the bill – HB1201 – would write the Trans-Texas Corridor out of the books.

The corridor was the pet project of Gov. Rick Perry. Approved in 2003, the proposed 4,000-mile network of toll roads was billed as setting the path for a NAFTA superhighway stretching from the Mexican border to Canada.

After years of debate in Austin, the multibillion-dollar TTC was declared dead in 2009, but concern about language still on the books has spurred additional action.

The bill would remove any reference to the failed highway project from statute, which would bring the state in line with the cancellation of the project.

OOIDA has criticized the corridor plan since it was unveiled. The Association cited reasons that included the proposed toll rate of 50 cents per mile for large trucks.

Another toll bill drawing consideration in the Texas House would authorize the use of public-private partnerships to get road work done. Intended to boost projects at the local level, HB3789 would authorize the state or regional tolling authorities to work with private groups to complete projects “identified in the statewide transportation plan.”

Still other bills pursue partnerships with private groups on road work. The Senate voted Thursday to advance three bills that would allow TxDOT to make deals for work on a 28-mile segment of Interstate 35 East between I-635 and U.S. 380, a nine-mile portion of state Highway 183 between state Highway 161 and I-35 E, and five segments of the North Tarrant Expressway project. Senators already approved a separate bill that would authorize a partnership for the Grand Parkway, state Highway 99, in Houston.

SB1007, SB1017, SB1144 and SB1145, respectively, have been forwarded to the House for further consideration.

OOIDA encourages Texas truckers to contact their state lawmakers about these bills.

To view other legislative activities of interest for Texas, click here.

Editor’s Note: Please share your thoughts with us about the legislation included in this story. Comments may be sent to This email address is being protected from spambots. You need JavaScript enabled to view it..

Private toll road shocker: Raise tolls to pay for transit

Link to blog here.

A shocking revelation

By Dan Malouff, Washington Post

A number of Virginia politicians are shocked and appalled that the Metropolitan Washington Airports Authority is considering raising tolls on the Dulles toll road in order to pay the extra $330 million needed to put the Silver Line airport Metro station underground.

This is a good learning opportunity for those who think public/private partnerships equate to free money. When you turn over public infrastructure to private groups, you lose your authority to dictate policy, and the new private owners may not have the same priorities as the previous public ones. Virginia’s leaders should have realized when they turned the roll road over to the MWAA that MWAA would henceforth make policy for the road with its own interests in mind.

Apparently the idea that there’s no such thing as a free lunch is a shocking revelation.

Dan Malouff is an Arlington County transportation planner who blogs independently at The Local Blog Network is a group of bloggers from around the D.C. region who have agreed to make regular contributions to All Opinions Are Local.

Texas House votes to finally repeal the Trans Texas Corridor

Finally a story that actually reports what happened Wednesday! The Texas House voted unanimously to REPEAL the despised Trans Texas Corridor statute from the books and the only thing the press reported on was the amendment to that bill, HB 1201, that would allow TxDOT to increase the speed limits on Texas highways to 85 MPH.

Our problem with that amendment is that it was originally structured as a pay-off to Spain-based Cintra for its Trans Texas Corridor contract for SH 130 segments 5 & 6 where it pays TxDOT the maximum payment if it raises speed limits up to 85 MPH on its tollway (to incentivize more drivers to use their high speed toll road, hence Cintra gets higher toll revenues for which its willing to pay TxDOT for the enrichment to its coffers). See Ex 7 of the contract here. TxDOT would also receive a greater share of the toll revenues if it raises the speed limit to 85 MPH on Cintra's tollway. So just when you thought speed limits were about "public safety," private toll road interests come in and hijack the citizens' bill to REPEAL the Trans Texas Corridor to get the last laugh! The amendment, however, was apparently changed to only affect projects built AFTER the law takes effect in June.

Our hats off to Rep. Lois Kolkhorst who has worked with the people of Texas tirelessly since 2005 to KILL this beast that would have left a scar over Texas for generations.

House moves to kill the dead Trans Texas Corridor

Posted on 04/06/2011 by Gary Scharrer
  The controversial Texas Trans Corridor has been dead for a few years, but it still lives on in the state statutes.

Rep. Lois Kolkhorst, R-Brenham

All references, however, will be removed under legislation tentatively approved Wednesday by the Texas House. HB 1201 would repeal the chapter providing its statutory authority.

The Texas Trans Corridor remains a controversial legacy of Gov. Rick Perry. Widespread opposition by landowners and others upset about foreign ownership of state highways doomed the massive project that was authorized in 2003. Perry pushed the plan, which included a large network of tolled highways, dedicated lanes for trucks, railways, and rights of way for utilities.

  HB 1201 – approved without discussion – would allow the Texas Transportation Commission to establish speed limits up to 85 miles per hour on a part of the state highway system that was designed to accommodate travel at that speed, following engineering studies.

Rep. Lois Kolkhorst, R-Brenham, a fierce opponent of the Trans Texas Corridor, authored HB 1201.

“As our state grows in population, we are facing a pressing need for a more modern, more efficient network of roads and highways to move people and goods.  We do not, however, need the Trans-Texas Corridor, and I thank Speaker (Joe) Straus and my colleagues in the Texas House for working with me to repeal the Trans-Texas Corridor from state law,” Kolkhorst said.

She has been fighting the Trans-Texas Corridor since 2005.

Read the rest of the story here.

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