Eminent domain abuse Socialism for the rich

Link to article here.

This is a terrific article on how eminent domain abuse is Socialism for the rich. It's happening all over the country every day. The latest incarnation being public private partnerships (where they sell-off public infrastructure to the highest bidder on Wall Street) and the Keystone pipeline where the Canadian company has gained the power of eminent domain.

Socialism for the rich

By Thomas Sowell


Although socialism has long claimed to be for the poor, it has probably done more damage, on net balance, to the poor than to the rich. After all, the rich have enough money to leave the country if they think the socialists are going to do them any serious harm.

Some of our own rich have already had their money leave the country, to be sheltered from the higher taxes that limousine liberals say we should all pay. Meanwhile, the liberal media give them kudos for their selfless advocacy of higher taxes on higher income people, forgetting that these are not taxes on wealth.

Most of the people in the upper income brackets are not rich and do not have wealth sheltered offshore. They are typically working people who have finally reached their peak earning years after many years of far more modest incomes -- and now see much of what they have worked for siphoned off by politicians, to the accompaniment of lofty rhetoric.

The rich have learned to adapt socialist policies to their own benefit. For example, the city of Riviera Beach, Florida, is planning to demolish a working class neighborhood under its power of eminent domain, in order to prepare the way for a marina for yachts, luxury condominiums and an upscale shopping district.

What will the city of Riviera Beach get out of all this? More taxes from higher-income people, enabling local politicians to spend more money on programs to attract votes.

Meanwhile the rich get rid of lower-income folks without having to pay them the value of their homes and businesses that will be demolished. As in so many other cases, eminent domain is socialism for the rich.

Theoretically, those whose homes and businesses are demolished will get the "just compensation" to which the Constitution says they are entitled.

In reality, just announcing plans to demolish the homes in an area will immediately demolish part of their market value. Even if homeowners are compensated for whatever value remains when their homes are actually demolished -- which can be years later -- they have still been had.

For businesses, compensating them for the value of their physical assets -- which may or may not include ownership of the place where their businesses are located -- does nothing to compensate them for the often much larger value of the clientele they have built up over the years but who are now scattered to the winds by neighborhood demolition.

This game doesn't work the same way in rich neighborhoods. Not only can the rich hire big-bucks lawyers to fight city hall, why would city hall want to get rid of upscale taxpayers, who are often also big donors to political campaigns?

A very different form of socialism for the rich protects their communities from even the dangers of a free market. A whole array of laws and policies prevents outsiders from buying up property near them, even when these outsiders are ready to pay prices determined by supply and demand, rather than by eminent domain.

For example, the "open space" laws that have spread across the country to protect upscale communities represent one of the biggest collectivizations of land since the days of Josef Stalin.

Upscale residents say that they have a right to protect "our community." But not even the rich own the whole community.

They own what they paid for -- their own individual property. But they get the government to collectivize the often vastly larger surrounding property, in order to keep the unwashed masses from settling near them and spoiling their views.

Moreover, they wrap themselves in the mantle of idealism while doing this and denounce the "selfishness" of those who would stoop to building homes or apartments to house others, just to make money.

"Developer" is a cuss word to those who wax indignant in their righteous zeal to keep other people out. Why can't these money-grubbing developers just inherit money, like so many of the upscale idealists?

Meanwhile, back in the working class neighborhood in Riviera Beach, it is being defended legally by the Institute for Justice, one of the few "public interest" organizations that deserve the name.

Virginians protest tolls & PPP on Hampton Roads



More than 3,500 sign anti-toll petition

Street Smart

By Jon Cawley

9:25 PM EST, February 11, 2012

Do you hate the idea of paying a toll to travel between Norfolk and Portsmouth in the Midtown or Downtown tunnels?

Perhaps what really gets you steamed is the likelihood that even more tolls will pop up around Hampton Roads as part of a growing trend toward mega-project public/private partnerships.

A Suffolk resident has started an online petition to express that very dismay. And as of Friday evening, more than 3,500 people have signed Todd Cairns' petition on http://www.change.org. The petition is "Tell Virginia State and Local Officials: Block Tolls in Hampton Roads."

In part, the petition reads: "In an attempt to make up for a road-funding model that becomes increasingly insufficient with each passing day, Hampton Roads is on the precipice of heavy tolls and public-private partnerships. While there is much concern from our citizens and representatives, the response is divided. This petition has been created to unify our concerns and hopefully to reverse course on public-private partnerships and tolls.

"The most worrisome aspect is what tolls will do to the local economy and citizens. In Hampton Roads, it will heavily affect small businesses, students at ODU, NSU, TCC, the military who depend on our roadways," the petition states.
A second online petition at the same website has garnered 89 supporters.

The petitions are an example of the growing public discord in Hampton Roads regarding Gov. Bob McDonnell's plan to finance state transportation needs — such as a new Midtown Tunnel tube and upgrades to the Downtown Tunnel and Martin Luther King Expressway — in large part through public/private partnerships and tolling.

The governor's plan to start a statewide tolling authority suffered a setback last week when it was stripped from General Assembly legislation before the Senate finance committee.

DMV grants

The Virginia Department of Motor Vehicles Highway Safety Office is accepting transportation safety grant applications from programs statewide that "strive to reduce traffic deaths and injuries."

The deadline for filing a submission is March 15.

The cost-reimbursement funding phase, for selected programs, will run Oct. 1, 2012, through Sept. 30, 2013, according to a DMV statement.

Instructions say applicants should contact their regional manager to get access to an online application that must be filled out at http://www.dmvnow.com. The Portsmouth regional manager is Dwight Jenkins. He can be reached at 804-699-0364 or This email address is being protected from spambots. You need JavaScript enabled to view it..

Rendell calls to strike ban on tolling interstates

Rendell wants to strike ban on tolling interstates

By Terri Hall, San Antonio Transportation Policy Examiner
February 17, 2012

Former Pennsylvania Governor Ed Rendell headlined the second day of the Texas Department of Transportation’s (TxDOT) 7th Annual Texas Transportation Forum at the Grand Hyatt in downtown San Antonio. The theme of the conference was a TxDOT (hence taxpayer) sponsored plea for more money. Rendell didn’t disappoint. His geniality and humor didn’t make his attacks on the taxpayer any more palatable, however.

He blamed Congressional inaction on a new federal highway bill (that expired in 2009) on fear. He said, “They’re all scared of Grover Norquist,” and likened Norquist to the Wizard in Wizard of Oz,  who had a powerful hora until Dorothy and her friends discover who’s actually behind the curtain -- a whimpy little guy that’s all bark and no bite. He equated those afraid of raising taxes as "afraid of their own shadow."

Because of Norquists’s no tax pledge, “we basically have a Congress who has pledged never to raise taxes no matter what,” Rendell concludes. “If we don’t retry courage (the courage to raise transportation taxes), we’re cooked.”

Lobbying to remove ban on tolling existing freeways
But the most anti-taxpayer statement came when the former Governor called to lift the ban on tolling existing federal-aid highways from the federal highway bill -- a ban Senator Kay Bailey Hutchison has put in place for Texans since 2007.

In the same speech, Rendell, a Democrat, said he agreed with the tea party sentiment that we can’t saddle our grandchildren with debt, yet he also said “there’s never been a better time to borrow.” The way toll roads are being done in Texas and around the country are not like traditional turnpikes where they were brand new roads and private bond investors took all the risk if the drivers didn’t show up.

Now states are slapping tolls on existing right of way, even on existing free lanes, a DOUBLE TAX, charging us again to use what we drive on today toll-free. It’s a giant tax grab (while they tell you they’re not raising taxes). Private bond investors now insist upon profit guarantees that ensure congestion on competing free routes through non-compete clauses that prohibit or penalize government agencies if they expand free roads surrounding the tollways. Most all “managed lane” toll projects, where they add toll lanes to existing corridors, use heaps of taxpayer money to subsidize them, so the risk gets shifted to taxpayers rather than the private bond investors.

Rendell remarked that Texas used to be the model for road privatization and that it can be again. There’s one BIG reason why Texas faded from the forefront of privatization  -- the PEOPLE of Texas DO NOT want to sell-off our Texas sovereign public road system to private corporations in government-sanctioned monopolies that essentially give corporations the power to tax.

Such deals, called public private partnerships (PPPs), include extremely high toll rates and represent eminent domain abuse as well-- taking someones’s private land (in the name of a ‘public use,’ a road), and handing it over to another private party for private gain. Texans hold property rights sacred, so this doesn’t sit well either.

When Rendell was Pennsylvania’s Governor, he tried to sell the Pennsylvania turnpike to private interests and his legislature voted it down. Where is such a spirit in the Texas Legislature that just voted to hand 15 more segments of Texas roadways to foreign companies using PPPs despite no popular support for it? Georgia Governor Nathan Deal recently called PPPs “ill-conceived sell-outs of state sovereignty.” He’s exactly right, Texans agree. However, Texas Governor Rick Perry and state leaders are really good at ‘states rights’ rhetoric, but their actions keep the special interest money coming.

Rendell went so far as to liken the fight to raise transportation taxes to our Founding Fathers‘ fight for liberty. What? He said America was built by risk takers (colonial shopkeepers who stood up to the mightiest nation on earth), and he encouraged the room full of road industry advocates and lobbyists to encourage lawmakers to take the risk to vote to ‘increase funding’ (ie - raise taxes). Why is it a risk? Because they are likely to be held accountable at the ballot box (but they’re counting on the voters’ short memory, as usual). Rendell said to “give them (lawmakers) a permission slip” to raise taxes.

How was American prosperity built?
Something’s wrong with this picture. America was not built on tax hikes, in fact, quite the opposite. The American War of Independence was sparked by a tax protest, the Boston Tea Party, and they fought for freedom from King George’s tax tyranny. Rendell equated raising taxes with making America great again, but there’s never been an economic model that shows any country can tax its way into prosperity.

Even worse, though Rendell had stirred up controversy with these words before, he chose to end his speech with it anyway. He invoked Todd Beamer’s American spirit during the 9-11 attacks by telling the road lobby to get moving on those tax hikes by repeating Beamer’s inspirational last words, “Let’s Roll” -- as if the fight AGAINST the taxpayer in raising road taxes is a noble cause equivalent to the cause of American liberty for which those who gave their lives on 9-11 were taken into eternity! OUTRAGEOUS! He didn’t even get Mr. Beamer’s name right.

Why would a Republican Governor’s highway department invite a Democrat ex-Governor to come down to ‘conservative,’ tax-averse Texas to advocate for the MOST expensive way to fund roads -- unbridled tax hikes in the hands of unelected toll road bureaucrats and even private corporations? Perhaps because Governor Perry and our state leaders are not so conservative after all. Special interests know no party lines.

The forum concluded with videotaped remarks from Senator John Cornyn. The plight of the federal highway bill currently being debated in the U.S. Senate loomed large over the two-day event. Cornyn could not make it back to Texas to deliver his address live due to the floor action on the highway bill. Like last year, Cornyn advocated for PPPs and tolling, but he added a new tax to those -- indexing the gas tax. Yesterday, State Representative Drew Darby advocated for a $50 hike in vehicle registration fees to raise revenue to end the $1 billion in annual gas tax diversions. Rather than exercise fiscal discipline, by ending gas tax diversions through prioritizing spending, Darby lobbied for yet more tax hikes.

Really? They want all of the above? We won’t have money left for food and a roof over our heads if this license to tax, tax, tax becomes law.

It begs the question -- where exactly are the conservative leaders in Texas? It sure wasn’t on display at this taxpayer-sponsored shin-dig. Our personal economic survival is on the line, and if our leaders have their way, you’ll soon be paying a premium to maintain your freedom to travel.

Continue reading on Examiner.com Rendell wants to strike ban on tolling interstates - San Antonio Transportation Policy | Examiner.com http://www.examiner.com/transportation-policy-in-san-antonio/rendell-wants-to-strike-ban-on-tolling-interstates#ixzz1mr0JL5yT

TxDOT drops idea of PPP on Grand Pkwy

Link to article here.

Don't confuse dropping the idea of a controversial public private partnership idea for the Grand Parkway as a move to do the right thing at TxDOT. It's all about weak traffic and revenue projections for those segments. Note: ALL Texas taxpayers will be on the hook for up to $550 million in SUBSIDIES for this LOSER toll project. Once again, our highway dept and politicians push a fiscally irresponsible, ill-conceived toll project upon Texans. They don't care how much of a rip-off and tax increase they saddle multiple generations of Texans with, as long as they get a ribbon cutting ceremony photo-op.

TxDOT drops P3 concession on Grand Parkway TX99 for design-build

Posted on Sun, 2012-02-12 21:49
Toll Road News

 Texas DOT has announced it is dropping the toll concession approach for the next stage of the Grand Parkway (TX99) north of Houston in favor of taking the traffic and revenue risk itself and using a design-build (DB) contract. In the usual brisk Texan fashion the decision came about a week after TxDOT had listed groups qualified for both concessions and DB on around 38 miles, 61km (segments F1, F2, and G of an eventual 180 mile, 290km circumferential road. It varies between about 23 miles to 40 miles, 37km-65km out from central Houston.

The 38 mile 2x2 lane segments that are part of this project run from the US290 northwest of Houston generally east through the far northern part of Harris County crossing I-45 and passing into Montgomery County  to terminate at US59. There are three expressway-to-expressway interchanges with those long and expensive direct connectors  and some segments with free frontage roads but the right of way will allow point upgrades where traffic justifies it.

Project cost for the F1, F2, and G stretch is put at around $1,400m - for a cost of $38m/route mile and about $9.5m/lane-mile. (TxDOT has a lower project cost number in a presentation for stakeholders: $1,129m.)

In a presentation last year (link below) TxDOT said they expected to get a concession fee to be paid at close of $1,100m. Design-build they said then would require a subsidy of $550m over toll revenue bonds.

A spokesman said that the difficult financial climate and weak traffic and revenue forecasts for the Parkway meant they were so unlikely to get strong toll concession proposals it wasn't worth pursuing that track.

Earlier forecasting in a presentation showed 2021 revenue for F1/F2/G segments in the range $130m to $260m, 2026 $190m to $480m, 2031 $230m to $650m, 2041 $300m to $1,120m (based on read-off of a graph.)

But there's a E segment (nearly 16 miles,25km long) already under construction that TxDOT will toll along with the three new segments.

Toll configuration

The new project segments F1, F2, G involves six mainline toll points and ten pairs of ramp toll points. The existing E segment to the southwest of F1 involves two more mainline toll points and nine ramp pairs. So E:G has 8 mainline toll points and 19 pairs of ramp tolls.

All-electronic tolling by transponder or license plate camera image is proposed, as in all other new toll facilities in Texas.

Traffic and revenue projections

Wilbur Smith's latest traffic and revenue forecasts for the Grand Parkway are only released in the form of a spreadsheet, but they incorporate an interesting approach in which they express different forecasts with four different probabilities: P10 meaning there is only a 10% probability the forecast will not be met (90% probability of meeting them), P25 a 25% probability of failing…., P75, and P90 a 90% probability that the forecast won't be met. And they forecast each constrained (by limited lanes) and unconstrained (with more lanes).

The forecasts use a starting toll rate of 17.1c/mile, 11c/km the toll rates increasing with the escalation of risk.

The P25 forecasts are for traffic starting in 2016 at 47.74m/year or 131k/day.

Remember this is the toller's definition of traffic - number of toll transactions. Since point tolling is being used each trip often generate multiple toll transactions, between one and nine transactions as tolls are struck along the pike.

Traffic defined as toll transactions about doubles after the first five years (2021) to 248k/day - the 'ramped up' traffic.

Over the next five years to 2026 the increase is just under 30% on the ramped-up 2021 volume and 15 years later in 2041 it is up 2/3 on 2021 traffic.

Revenue rises more steeply of course because toll rates are assumed to rise, from $55m in the first full year to $119m ramped-up in 2021, then to $170 in 2026 and about $300m in 2041.

Five bid for concessions, seven for DB

Five well-known international groups based in Europe and Australia qualified to make toll concession proposals: Vinci Concessions SAS, Macquarie Ltd, Cintra Infraestructuras SA, ACS SL/Hochtieff PPP, and OHL SA. But no US group qualified, nor several overseas groups that often bid.

Seven groups have qualified for the design-build project. Some of the companies partnering with toll concession proposers were also in groups making design-build bids, but most of them were separate. (see table nearby)

TX99 was one of eleven priority projects authorized by the legislature (SB1420) in 2011 for toll concessions.

The executive director Phil Wilson is quoted in a statement recently: "We review and manage each one of these priority projects based on their own merits and think the design-build option is the best way to go forward on the Grand Parkway."

They hope to award the contract before the end of 2012 and break ground on the project early 2013.

Probabilistic forecasts comment by T&R consultant

Robert Bain, the leading independent consultant on traffic and revenue forecasting (RBconsult Ltd www.robbain.com) says probabilistic numbers are a useful addition to forecast modeling. He says the uncertainty range as presented by WSA "does appear to be reasonable."

He advocates another approach as a supplement.

"On the chart I plot WSA’s base case and their ‘P10’ case.  P10 simply means that, by their reckoning, there’s only a 10% chance of traffic (or transactions, as it appears here) falling below these estimates.
"I also plot – in red – my own estimate of the lower boundary likely to apply to the prediction intervals associated with traffic forecasts."

He defines two ‘states’: dynamic and stable.  

"A stable environment is one in which traffic conditions are mature and the ‘drivers’ of growth (population, employment etc.) are likely to evolve in predictable ways.  As traffic forecasts are likely to be more accurate under these stable conditions, the predictive interval boundary lies closer to WSA’s base case.

He also models statistically what he calls a dynamic environment - "one experiencing on-going change, where traffic forecasting is likely to be less likely.  Both of my boundaries have been estimated through countless reviews of toll road traffic forecasting accuracy that I’ve undertaken over the past 10 years.  And they’ve been validated through a survey I conducted of traffic forecasters (and others) asking specifically about the forecasting accuracy associated with time horizons of different lengths."
Bain says WSA’s P10 sits pretty comfortably between his two (lower) boundaries – suggesting that their estimates of traffic forecasting uncertainty align with mine, and with a good deal of empirical evidence.  

"Well done WSA.  Traffic forecasters are generally inclined to overestimate the predictive capabilities of their models – but not here."

But Bain says he is commenting entirely on their statistical approach to drawing conclusions of probability from the base case forecast. He knows nothing about the project or the reasonableness of the base case.

And since everything rests on that the base case and what went into it the various probabilistic forecasts are just as dependent on the quality of the base data as the base forecast.

"The P95 means that there’s only a 5% change of the revenue being lower IN THE MODEL AND AS THE MODEL IS SPECIFIED."

SETTING: The Grand Parkway caters to the developing fringe of the Houston metro area, Texas second most populous after Dallas-Ft Worth. Houston and Texas growth has been heavily hit by the Great Recession and the Obama administration's tax and energy policies. But unlike much of the rest of the country some growth has continued and prospects for recovery should be better in Texas than most other parts of the US.

In Texas they generally build efficiently minimizing the capital cost to be carried and recovered.

Still future population and traffic in fringe areas like this is uncertain. And TxDOT's policy of providing free frontage roads alongside the tolled roadways in developed areas loses considerable traffic and revenue to the free lanes, and limits the tolls that can be asked.







NOTE: Since these forecasts Wilbur Smith Associates has been acquired and is now part of CDMSmith.

DFW officials draw line the sand, insist on free lanes, not just toll lanes on I-35E in Denton

Link to article here.

DFW officials put their foot down over toll projects

Posted Wednesday, Feb. 15, 2012

By Gordon Dickson

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

LEWISVILLE -- After years of enduring one toll project on top of another, North Texans are striking back and insisting that they get some new free lanes, too.

This latest twist in the state's effort to keep up with congestion is playing out on Interstate 35E, a 28-mile corridor from Interstate 635 in Dallas to U.S. 380 in Denton. The highway is overdue for a makeover that could cost more than $4 billion and is tentatively scheduled to begin in about a year.

Denton County officials have accepted that the project will include new toll lanes in the median, which will allow motorists to buy their way out of congestion on the main lanes. But they're also insisting that the project add at least one free lane in each direction.

The county has saved $600 million to contribute to the project, but officials have told the Texas Department of Transportation that they won't play ball unless free lanes are included in the first phase of road work.

"TxDOT for a while has said they want to be sensitive to local desires," said John Polster, Denton County transportation consultant. "We had to show that $600 million would not build enough of what people wanted. The intent was to show that, if we're going to build something we're going to have to have more partnerships."
The effort to pay for I-35E expansion is expected to be among the hot topics at the Texas Transportation Forum, an annual event hosted by the Transportation Department today and Friday in San Antonio.

The I-35E project is different from other recent road work in North Texas in that there's a concerted effort to include free lanes in the earliest construction phase.

By contrast, in Tarrant County, the $2.5 billion reconstruction of Northeast Loop 820 and Texas 121/183 -- a project known as North Tarrant Express -- includes the addition of four managed toll lanes but no new free lanes until possibly as late as December 2030, according to the state's contract with the developer.

The I-35E project would more closely resemble the $1 billion DFW Connector under way in Grapevine -- a project that does include new free lanes as well as managed toll lanes. A lack of funding delayed that project for years, until it was kick-started in 2009 by $250 million in federal stimulus funds.

On I-35E, Denton County has perhaps more leverage than other local entities because of the $600 million it is bringing to the table. The money comes from Denton County's share of the $3.2 billion paid to the region by the North Texas Tollway Authority in 2007 to take over the Texas 121 project, now the Sam Rayburn Tollway.

Residents revolt

When initial reports surfaced that Denton County's $600 million would be enough to build only managed toll lanes on I-35E, residents revolted. Even elected officials who hadn't been involved in transportation issues began to ask questions.

"I really think we need to expand I-35. However, we need to be zealous in how we do it," said Denton County Commissioner Hugh Coleman, who spoke during a recent stakeholders meeting. "We need to make sure we do it right, because it's one of the most valuable transportation properties in Texas."

The Transportation Department and North Central Texas Council of Governments are holding numerous private conversations to determine how much money can be added to the project. By some estimates, Denton County's $600 million could be combined with $300 million in unspecified state transportation funds and $600 million from the council of governments for a total of $1.5 billion.

That amount, officials say, should be more than enough to ensure that the initial phase of construction includes one new free lane in each direction, two managed toll lanes and a complicated array of ramps connecting I-35E to the President George Bush Turnpike and Sam Rayburn Tollway on a busy 1.5-mile stretch in Lewisville.

But for now, state officials are keeping mum about precisely where they'll get the money, although they hope to decide within 30 days.

"Absolutely understand this is a project of statewide priority," said Texas Transportation Commissioner Bill Meadows of Fort Worth. "But the project has become complicated just by the sheer magnitude of it."

Options for building

Once the funding picture is more clear, regional leaders must decide whether to seek a private developer to take over the project for 52 years in the form of a comprehensive development agreement. State law allows only a limited number of projects with that arrangement, which is often criticized because it tends to draw interest from foreign-based companies.

Another option would be a design-build arrangement, similar to what is being used on the DFW Connector. Design-build would allow an outside developer to oversee construction of toll and free lanes, while letting the state keep control of the corridor -- and the toll revenue.

Although the design-build arrangement might be more politically expedient, a comprehensive development agreement could give the region more bang for its bucks because an outside developer could invest its own money in the project in return for the right to collect tolls.

Once the Transportation Department and council of governments announce their funding levels, a state-formed committee will determine which type of developer to hire for the I-35E project.

The committee will weigh factors such as financial risk and tolling structure, said Polster, one of the committee's seven members.

Then, the state will publish a request for proposals -- a process similar to bidding -- and select a best value. Everyone involved hopes that such work can be done by December, making it possible to begin the road work by early next year.

Although negotiations between state agencies are often tense, North Texans have become quite good at delivering projects with alternative sources of revenue rather than relying on state and federal gas taxes, said Michael Morris, transportation director for the council of governments. Morris is confident that the public will be happy with the I-35E improvements.

"You'll see elements of gas tax lanes. You'll see elements of managed lanes," he said. "I think it will be an amazing combination of elements."

Senate Amendments could dampen market for road privatization

Link to article here.

Highway Bill Could Dampen Market For Long-Term Leases, Like Indiana Toll Road

By Matt Sledge
Huffington Post
February 10,2012
An amendment added to the Senate Finance Committee's portion of the highway bill on Tuesday would change the tax code to prohibit companies from depreciating the value of highways they lease from states. The measure, sponsored by Sen. Jeff Bingaman (D-N.M.), would apply only to so-called "brownfield" highways that have already been built.

Highway leases came under increasing scrutiny in the United States after the Indiana Toll Road and the Chicago Skyway were leased for 75- and 99-year terms to foreign companies in the 2000s.

Bingaman's proposal is strongly supported by the trucking industry, because privatizing highways generally results in higher tolls. But as the Senate transportation bill moves forward -- the Senate approved cloture on a motion to proceed in discussing it Thursday -- it could face increased opposition from Wall Street and law firms that stand to gain on fees from such deals.

“The tax code is encouraging the privatization of public highways by offering generous tax breaks to private entities, and U.S. taxpayers are footing the very expensive bill. This practice doesn’t make any sense and I’m glad we’re a step closer to changing it,” Bingaman said in a statement Wednesday.

Currently, when a private operator leases a toll road for a period of 75 or 99 years, its value can depreciate over 15 years, which translates into a quicker tax break. Bingaman's amendment would spread out the depreciation over 45 years, and also forbid states and municipalities from issuing private activity bonds with cheap interest rates on the behalf of private toll road operators. The bill would apply both to federal interstates and state highways.

Phineas Baxandall, a senior analyst at the US Public Interest Research Group, told HuffPost that if passed, Bingaman's legislation could translate into fewer of the long-term leases that so incensed toll road opponents. That would be a positive move, he said.

"The further out it is, the more the public can't adequately know how to handle its own risks in these deals," he said. "They won't know what kinds of contingencies they'll have to be paying extra side fees for."

The Senate bill faces a long slog through Congress, with a dueling House bill raising hackles on everything from mass transit funding to drilling in the Arctic National Wildlife Refuge, so Bingaman's amendment may never make it into law. But if it did, it could make highway leases less attractive to some toll road investors, according to the director of government affairs at the International Bridge, Tunnel and Turnpike Association.

"It presumably would have the effect of reducing investment interest," said Neil Gray. Still, he added, other investors less interested in making a quick return through the tax system, like pension funds, might step up to the plate. "I don't think this is turning a switch and killing off anything, it would just alter what sort of deal you can generate."

Thursday's 85-11 cloture vote in the Senate on a motion to proceed with the transportation bill means that it is one step closer on coming to the floor for a debate.

Sen. Barbara Boxer (D-Calif.), a prime sponsor of the Senate legislation along with Sen. James Inhofe (R-Okla.), pleaded with her colleagues on both sides of the aisle to offer as few amendments as possible to the bill, and to keep it bipartisan, in contrast to the House legislation.

"Please do not mess up this bill and load this bill down with extraneous matters," Boxer said on the Senate floor.

Study to explore privatization of Ohio turnpike raises questions about bias

Link to article here.

$2.85M study of turnpike on panel's agenda

Kasich administration proposes private operation

FEBRUARY 13, 2012

Gary Tiboni has no uncertainty about a $2.85 million Ohio Turnpike study that the Ohio Controlling Board will consider funding when it meets on Monday. To him, it's a sham.

"It's a foregone conclusion, as far as I'm concerned, as to what the results will be," Mr. Tiboni, business manager for Teamsters Local 436, said. "There will be a lease, or it will be turned over to ODOT."

Larry Davis, the Ohio Trucking Association's president, professes having shared Mr. Tiboni's belief until recently. But he said he changed his mind after another Kasich administration study, concerning prison privatization, came back recommending selling just one of five prisons identified for possible sale and contracting for operating two of the four others.

"They took the results of the study, and reacted to that," Mr. Davis said. Consequently, he said, "we are willing to wait and have our input with this group" that has been chosen to study ways the turnpike might be "leveraged" to generate revenue for Ohio.

"This group" is KPMG Corporate Finance LLC of Washington and Austin. It was selected from among 14 firms that submitted letters of interest, which officials narrowed to five that gave detailed proposals and presentations to an Ohio Department of Transportation committee.
Mr. Tiboni, whose union represents turnpike toll collectors and maintenance workers, cites KPMG's involvement when the Indiana Department of Transportation in 2006 leased the Indiana Toll Road to a Spanish-Australian consortium as evidence that the Ohio Turnpike's days as an independent public agency are numbered.

Indiana got $3.8 billion in exchange for a 75-year lease, under which the concessionaires agreed to keep up with maintenance but also have the right to increase tolls annually by 2 percent or more, based on any of three formulas, and were allowed a one-time increase in 2008 of more than 50 percent on the Toll Road's main stem between the Ohio border and Portage, Ind.


Since then, critics have complained not only about the higher fares but also declining maintenance -- both of the roadway and at service plazas -- and longer toll booth lines because of some lanes' conversion to electronic toll collection.

Ken Blackwell made turnpike privatization a platform plank in his unsuccessful 2006 Ohio gubernatorial campaign, while Ted Strickland, who won that election, ruled it out.

Within months of taking office last year after defeating Mr. Strickland's re-election bid, Gov. John Kasich revived the idea, initially predicting a 50-year lease could raise as much as $3 billion for Ohio but then retreating from such specifics.

At a Toledo news conference in July, the governor merely said Ohio should explore revenue-generating options from what he considers a "very underutilized asset" that, if properly exploited, could generate new income both for the state and a private operator.

Weeks later, ODOT and the state Office of Budget and Management began its search for a consultant team, following a procedure spelled out in the biennial state budget law that grants the Ohio General Assembly veto power over any request for proposals that might be issued to seek turnpike investors.

Controversy erupted in early October concerning federal grant funding for the study, then estimated to cost $1.5 million, when five Democratic party members of Ohio's congressional delegation persuaded the U.S. Department of Transportation to revoke the funds because a state request for proposals cited privatization as the only outcome to be evaluated in the turnpike study.

Study's reinstatement

A letter from the delegation's Republican side and revised language from the transportation department led to the study's reinstatement for federal-funds eligibility later that month, and in November the state chose KPMG as the lead consultant.

Since then, the study's price tag has swelled to as high as $2.85 million, which Steve Faulkner, a spokesman at department headquarters in Columbus, said occurred because of more detailed work the state will ask KPMG and its subcontractors to do.

"Since KPMG was selected … we've had detailed conversations about the thoroughness and level of detail it will take to conduct the type of independent, objective, third-party analysis the state will need in order to make the most informed decisions going forward," Mr. Faulkner said, adding that $2.85 million is a maximum, not a guarantee to the consultant.

Besides leasing the turnpike or other ODOT options, the possible study recommendations include contracting part of the turnpike operations or keeping it status quo.

Expanded scope

The study's scope has been expanded to include a look at options for privatizing non-Interstate rest areas in Ohio, such as by selling gas stations, convenience stores, or even fast-food restaurants that the state franchises to set up shop at those locations, the ODOT spokesman said. Federal law has forbidden the operation of commercial food or fuel businesses at Interstate highway rest areas built since 1960.

The grant's entire cost still will be funded from federal transportation planning funds assigned to Ohio, Mr. Faulkner said.

While cautious to note that the Ohio Controlling Board, which statutorily must approve adjustments to the state budget, still must act to release the federal funds, the ODOT spokesman said he knows of no reason why the seven-member board would not do so. The board's members include the director of the Office of Budget and Management or designee; the chairs of the House and Senate finance committees, and four members-at-large from the General Assembly, one each from the majority and minority party in each house.


Rick Hodges, a former state representative from Delta who was appointed the turnpike's executive director, said debate about the turnpike "leveraging" issue has been rife with misinformation -- particularly concerning the study having a set outcome and, if privatization is chosen, a private operator's ability to raise tolls at will.

"The scope of work is very broad," Mr. Hodges said. "Leasing is not the only option. The people doing this study are very serious about exploring all options."

Tolls, he said, are constrained by the availability of parallel free highways like U.S. 20 and State Rt. 2, roads that in the past have received surges of truck traffic when turnpike fares went up.

Low rates

"We now have among the lowest, if not the lowest, commercial toll rates," Mr. Hodges said. "But we also have good parallel routes, and the only way you can make money on the turnpike is for people to drive on it."

Among KPMG subcontractors listed in its proposal is the University of Toledo's Intermodal Transportation Institute, which will provide the consultant with background knowledge and research on local transportation operations and issues.

"We're very pleased that KPMG selected us," said Rich Martinko, the institute's director and a past ODOT senior manager during the administration of Gov. Bob Taft. "We are a neutral asset for transportation stakeholders. … We have knowledge and insight on the specific issues in northern Ohio, and especially northwest Ohio. Understanding the asset is important to making a good decision."

Officials said they did not know how much the UT institute would be paid for its contribution.

Mr. Hodges says he views himself and turnpike staff also as sources of information for KPMG researchers.

"I'm not providing policy on this, and I shouldn't," he said.

McCaul's investment in TransCanada, reignites debate over insider trading

Link to article here.

McCaul Family's Pipeline Holdings Stir Controversy

by Jay Root
Texas Tribune
Legislation cracking down on insider trading by members of Congress hasn’t landed on the floor of the U.S. House yet, but it’s already become a political football in Congressional District 10.

That’s because the Democrat who wants that seat, international affairs consultant Dan Grant, is alleging that incumbent Rep. Michael McCaul, R-Austin, is benefiting from lax ethics rules for U.S. representatives and senators — rules the pending U.S. STOCK Act would help strengthen.

McCaul says his opponent is flat wrong.

At the heart of the dispute is the McCaul family’s private interest in the company pushing the Keystone XL Pipeline — and the congressman’s public advocacy for the project as a member of Congress. McCaul, believed to be the second-wealthiest member of Congress, reported that his family owned $115,000 to $300,000 in TransCanada Corporation stock as of 2010, the latest year available, according to ethics filings compiled online by the Center for Responsive Politics.

McCaul’s personal financial statement shows TransCanada stock purchases of up to $65,000 were made on Dec. 21, 2010, online disclosures show. A day later, on Dec. 22, McCaul joined 38 fellow House members in writing a letter to Secretary of State Hillary Rodham Clinton, urging her to grant “expeditious approval” of the pipeline.
Grant alleges that McCaul stood to personally benefit from his knowledge of the advocacy letter, and says he should be investigated by the House Ethics Committee, on which McCaul serves.

“That is the definition of insider trading, and even if it’s not illegal for congressmen, it is flatly wrong to do something like this,” Grant said. “It’s no wonder that people are so upset with Congress right now because of behavior just like this.”

McCaul spokesman Mike Rosen said the complaint is off-base. He said McCaul has no involvement in the trading of the family's stock portfolio, which belongs to his wife, Linda, and their children. Linda McCaul is the daughter of Clear Channel Communications founder Lowry Mays.

“Congressman McCaul does not, and has not during his tenure in Congress, personally traded or instructed anyone to trade any security on his behalf, and he is legally precluded from having any involvement or knowledge of specific investment decisions made with regard to securities listed as his wife's separate property which are disclosed in his annual personal financial disclosure," Rosen said.

Rosen could not immediately provide any legal agreements that bar McCaul's participation in stock trading. Ethics disclosures require that holdings of spouses and dependent children be treated the same as those of the officeholder, experts say. Rosen said McCaul’s wife and their children sold all of their TransCanada stock in early 2011.

He said the family made money off the sale of the holdings, but he could not say how much.

Shares of TransCanada were trading at $37.46 on Dec. 21, 2010, and rose to as high as $44.83 on May 31, 2011, according to Yahoo Finance. The shares are hovering around $42 now. Grant acknowledged the shares did not spike considerably after the Dec. 22 letter but said it was wrong to get any profit off TransCanada stock after the letter was sent to Clinton.

The State Department rejected the pipeline last month, pleasing environmentalists but sparking vehement protests from Republicans, who want to fast-track it through Congress.

McCaul said his advocacy of TransCanada's $7 billion Keystone XL Pipeline project is based on what it would do for his constituents and Texas, not any assets owned by his family.

“The Keystone Pipeline would create thousands of jobs in several states — many of them in Texas,” McCaul said in a written statement. “When operational, it would represent nearly 10 percent of U.S. petroleum imports and decrease our reliance on oil from the Middle East and countries such as Venezuela that don't like us. I have consistently supported projects and policies that strengthen America's economic and national security, and I will continue to do so."

Insider trading by members of Congress has become a big flashpoint in the 2012 elections. Last week the U.S. Senate passed, on a lopsided 96-3 vote, the U.S. STOCK Act, which is pending in the U.S. House. McCaul signed up as a co-sponsor of the measure on Jan. 31, online records show.

The bill would make it clear that members of Congress are not exempt from rules that ban insider trading, or using nonpublic knowledge to profit off stock trades. It would also require more prompt disclosure of stock transactions, giving the public better information about whether any conflicts of interest exist between a lawmaker's official duties and the family stock portfolio.

The lack of specific laws against insider trading by members of Congress became a hot topic late last year after CBS's 60 Minutes aired a report outlining well-timed (and legal) stock market trades by powerful lawmakers who are privy to sensitive information on industries they regulate.

Gov. Rick Perry also made a ban on congressional insider trading a prominent feature of his presidential campaign stump speeches, and President Obama called for passage of the U.S. STOCK Act in his recent State of the Union speech.

Researcher and author Peter Schweizer, who helped 60 Minutes compile its report on insider trading, said the legislation is a “good first step” toward curbing the kind of conflicts of interest and abuses he laid out in his most recent book, Throw Them All Out.

Schweizer said he remembered looking at McCaul’s vast portfolio while researching his book and at the time saw "no discernible pattern” connecting his congressional service with any profitable stock deals.

He said disclosure requirements, as far as Congress is concerned, make no distinction between a spouse’s holdings and those of the member. The McCauls' assets make the family worth between $259 million and $502 million, according to the Center for Responsive Politics.

Schweizer said McCaul’s advocacy of the Keystone XL Pipeline, in light of the profitable stock trades in TransCanada, might be closer to what he calls “priming the pump,” a practice whereby politicians’ personal holdings “overlap with their legislative activities.”

“It just creates an inherent problem of a conflict of interest,” Schweizer said.

Apart from passage of the U.S. STOCK Act, Grant said McCaul should put his holdings in a blind trust to shield against any conflicts of interest and release his recent tax returns. Grant vowed to cough up his own tax records and said he would get rid of any stocks, or put them in a blind trust, if they posed a conflict of interest to him as a member of Congress.

Landowners fight Keystone company's use of eminent domain

Link to article here.

Keystone Pipeline Sparks Property Rights Backlash

by Jay Root
Texas Tribune
As the White House and Congress battle it out over the controversial Keystone XL pipeline, the Canadian company that wants to build it is still using its land-seizure powers to get property easements for the ambitious project.

And it’s ruffling some feathers in a politically conservative patch of Texas.

Several landowners along the proposed pipeline route say TransCanada has bullied them into selling their property by asserting “eminent domain” authority, the same power that governments use to seize land for highways and other public infrastructure projects. A property rights coalition tracking the condemnation proceedings has uncovered at least 89 land condemnation lawsuits involving TransCanada in 17 counties from the Red River to the Gulf Coast — cases that could test the limits of a private company's power to condemn property.

One of the landowners, Lamar County farmer Julia Trigg Crawford, will face off with the pipeline giant on Friday morning at a court hearing in Paris, Texas. Crawford got a rare restraining order halting any further encroachment on her land until questions surrounding TransCanada's right to condemn her property for the pipeline can be resolved.

“I’m just an angry steward of the land,” Crawford said. “A foreign-owned, for-profit, nonpermitted pipeline has taken a Texan’s land. Doesn’t sound right, does it?”

Crawford is opposed to the pipeline, which would carry tar sands oil from Canada, and has concerns about potential contamination of a creek she uses for crop irrigation. Her 600-acre farm, which straddles the Red River on the Oklahoma border, also contains numerous archaeological remnants of a Caddo Indian village.

The land seizure proceedings are continuing even though the White House rejected TransCanada’s application for an international pipeline permit, which included the proposed Gulf Coast segment that would run from Cushing, Okla., to Houston and Port Arthur. The company is exploring options to build the southern piece of the pipeline without a presidential permit, but either way it says it won't stop seeking land for the project.

“We don’t need a presidential permit in order for us to obtain the easements that we need for the right of way for this project,” said TransCanada spokesman Terry Cunha. He said the company already had 99 percent of the easements it needed for the Texas segment and was working on snapping up the remaining holdouts.

TransCanada has a major financial interest in completing the 435-mile Gulf Coast segment because of a major glut of oil sitting in storage tanks in Cushing. TransCanada's customers would like to move the oil down to North America's largest collections of refineries, where a premium is being paid for the crude. Once the segment was complete, it could carry as much as 830,000 barrels of oil a day to refinery row.

TransCanada has an existing international network of pipelines that connects Alberta in Canada to Nebraska, Illinois and Oklahoma. The Keystone XL pipeline would expand the company's capacity to transport oil from Canada, and add a route to the coast.

Politically, the fight over the Keystone XL pipeline has generally fallen into the familiar partisan pattern: Environmentalists and Democrats are trying to either kill it or reroute it, while the oil and gas industry and Republican lawmakers are promoting it as a job creator.

Gov. Rick Perry, both as a presidential candidate and a pro-business conservative, has slammed the Obama administration for trying to "appease environmental radicals," and hails the pipeline as a way to help the United States gain energy security and independence.

But the controversy generated by TransCanada’s use of land condemnation power has pushed the debate into a new realm, and it is prompting calls in Texas — including from conservatives — for more oversight and increased landowner protections.

“We need to make sure the property owners are properly treated and their property rights aren’t completely trampled,” said Sen. Kevin Eltife, R-Tyler, whose conservative East Texas district contains several of the counties TransCanada wants to cross with its pipeline. “You can’t just come in and roll over people."

Eltife says legislative hearings, and possibly legal reforms, are needed to clarify how pipeline companies use eminent domain to acquire pipeline right-of-way on private land.

The issue has even sparked some comparisons to Perry's ill-fated Trans-Texas Corridor, a massive transportation project that rural landowners viewed as an unprecedented land grab.

“This is everything we fought against with the Trans-Texas Corridor. It’s an eminent domain nightmare, a clear-cut violation of property rights," said T.J. Fabby, a Waxahachie Republican trying to unseat incumbent state Rep. Jim Pitts in the GOP primary.

"Eminent domain was never meant to be used to confiscate somebody’s property for private use."

Former Perry gubernatorial rival Debra Medina, a Republican from the Ron Paul wing of the GOP, is another critic. She said the pipeline flight shows how "crony capitalism" has stacked the deck in favor of big business interests while running roughshod over small business owners and average Texans.

Medina and other critics are hoping that legal challenges to TransCanada's eminent domain authority will lead to limitations on a private company's power to condemn land.

Under Texas law, only pipelines that are deemed “common carriers” — the pipeline world's equivalent of a public road — can condemn property for easements. The state Natural Resources Code says that to gain common carrier status, oil pipeline companies must agree to transport oil “for hire” from any company, without discrimination, based on published fees that are regulated by the state.

The Texas Constitution also gives protections to landowners in property seizure cases by requiring that eminent domain only be exercised for “public use.”

According to TransCanada, the pipeline meets the common carrier status because it transports oil owned by other companies, with whom it has delivery contracts. Cunha, the spokesman, says it’s in the public’s interest because the oil will help the United States meet its demand for energy.

“We’re delivering something in the public need,” he said. “We’re delivering petroleum that is much needed in the U.S., to address the consumption needs of the U.S.”

Critics say the pipeline is designed to meet the profit needs of a single company and doubt whether its claim of eminent domain authority meets the "common carrier" and "public use" tests.

"The primary purposes of this project is to get Canadian crude to the refineries. There is no public use aspect to this project," said carpenter David Daniel, who reluctantly signed over an easement to TransCanada after he said the company convinced him he would lose his property under eminent domain. "It’s an international commodity that will be sold on the world market.”

But property owners face daunting odds against pipeline companies, because the court system is the only avenue for fighting their condemnation cases, and until recently the state courts routinely dismissed challenges to a pipeline's status as a common carrier — a status companies have claimed they get from the Texas Railroad Commission.

That changed last year, when the Texas Supreme Court ruled that Plano-based Denbury Resources was a private carrier that wanted to build a CO2 pipeline for its own use, and couldn't use eminent domain to get an easement on a Houston-area rice farm.

In his opinion for the majority, Justice Don Willett wrote that "even when the Legislature grants certain private entities 'the right and power of eminent domain,' the overarching constitutional rule controls: no taking of property for private use."

The ruling sent shockwaves through the oil and gas lobby, which is now urging the Supreme Court to rehear the case.

One problem made clear in the ruling is that there is no agency that is specifically charged with determining whether or not a company is acting in the broader interest of the public or meets the standard of being a “common carrier.”

For years, pipeline companies have claimed common carrier status by checking off a box on a “T-4” pipeline permit form at the Texas Railroad Commission and promising to submit itself to rate regulation, should that ever come to pass.

But the Texas Supreme Court ruled that checking a box on a form isn't good enough, and the Railroad Commission says the pipeline permit is mostly just a registration document and doesn't involve fact-finding about common carrier status or bestow any land condemnation rights on any person or company.

"That ultimate determination would have to be made by the courts,” said commission spokeswoman Ramona Nye. "We have no authority over eminent domain."

Eltife, the senator from Tyler, said the lack of administrative authority over such fundamental property rights disputes has left Texas property owners in a precarious situation.

"It’s kind of a no man’s land," Eltife said. "At this point I don’t know who is speaking up for the property owners."


Link to article here.

Nearly 100 taking part in morning Texas-style protest of Keystone Pipeline in Paris

From staff reports | Posted: Friday, February 17, 2012  

Bowie County Citizen

Approximately 100 showed up this morning for a pre-hearing protest rally on the steps of the Lamar County Courthouse in what organizers call a blatant disregard by a Canadian company of the rights of a Northeast Texas landowner.

Media have been barred from entering the courthouse during the hearing that will take place at 10 a.m.

Protestors were scheduled to gather at 8:30 a.m. at the courthouse located at 119 North Main in Paris to voice their support for landowner Julia Trigg Crawford of Paris in support of her right to protect private property as the company, TransCanada, tries to take her land by use of eminent domain and begin trenching it for their Keystone Pipeline.

Upon asking for a standstill order while in negotiation on her eminent domain case, TransCanada's representatives balked against Crawford’s request saying they wanted the right to start trenching on her property as early as March 1st.

On Monday, Feb. 13th, Ms. Crawford obtained a restraining order against TransCanada to protect her property. Within 24 hours, TransCanada in turn filed for the restraining order to be dissolved. The hearing is set for Friday, Feb. 17 at 10 a.m. before Judge Bill Harris in Paris.

Local organizer Rita Beving expects there to be a huge turnout for the rally in Paris as she and other organizers call for landowners in the path of the pipeline and Texans who are concerned about the stealing of their land and the stripping of their rights as Americans turnout to voice their concern.

A separate protest on the issue will begin at 10 a.m. in Austin while the proceedings before Judge Harris are underway. That rally will be held at the Texas Railroad Commission office.

The Keystone XL pipeline would carry tar sands crude close to 2,000 miles zig-zagging North to South through six states including Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas. In Texas, the pipeline crosses eighteen counties, including Lamar and Fannin on its way to the refineries along the Texas coast in Port Arthur. A major concern, besides the eminent domain abuses, for people of Red River and Bowie County citizens would be the pipelines crossing of the Sulphur River basin, the area’s top source of water supply now and in the future.

Experts on crude composition have scientific evidence declaring that oil sands crude is more carbon-intensive than oil from other sources and their use would make a far more negative impact on the environment, prompting measures from the U.S. and the European Union to have them label as a more polluting source of energy for the future.

TransCanada's Keystone XL permit was denied by the president, so the groups and landowners question by what permit or authority does TransCanada take property or start any kind of tar sand pipeline construction? TransCanada, despite the denial of a permit, continues to bully landowners and execute eminent domain condemnation proceedings. Groups are questioning this company's right to take land via eminent domain. The Railroad Commission has stated that it does not have the authority to grant the power of eminent domain to TransCanada. Ms. Crawford has also challenged the company’s common carrier status.

The groups plan to show their Texas pride at the events with their boots on, and their Texas and American flags held high telling this private, foreign company "Don't Mess with Texas", "Don't bully Texans, putting our land and our water at risk," while this foreign company continues to masquerade as a common carrier.


Link to article here.

Keystone XL Pipeline: Texas Farmer Wins Temporary Restraining Order Against TransCanada

Posted: 2/14/12  |  Updated: 2/15/12

By Matt Sledge
Huffington Post

A coalition of environmentalists, conservative property rights activists and landowners are mounting a full court press against TransCanada in an attempt to derail the oil company's attempts to build the controversial Keystone XL pipeline in Texas. On Monday, they won a small victory when a Lamar County judge issued a temporary restraining order against the company's plans to do construction work on a farm near Paris, Texas.

The coalition's efforts are reminiscent of another battle during the last decade over eminent domain in Texas, concerning a massive "superhighway," known as the Trans-Texas Corridor, that Republican Gov. Rick Perry had sought to build with the help of a Spanish company. Perry lost that fight to a coalition of conservative ranchers and environmentalists, dealing him a serious political blow.

"We are involved because it's starting to look a whole lot like the Trans-Texas Corridor battle," said Terri Hall, founder of Texans Uniting for Reform and Freedom. "When push comes to shove, it's clear to me that my party is more interested in oil and gas interests than property rights," added Hall, a Republican.

Debra Medina, a property rights activist and Republican, has counted 89 cases so far in Texas where TransCanada had exercised eminent domain, she said. The company cites the pipeline's status as a "common carrier" under Texas law as the reason for its ability to use governmental power to take land. Eminent domain battles have periodically erupted as TransCanada has bought easements on property for the pipeline that would cross six U.S. states if built.

The company has generally tried to settle with landowners, or route the pipeline around those who refuse compensation terms. But in Lamar County, the pipeline company took Julia Trigg Crawford's farm by eminent domain. Crawford's lawyer asked for a temporary restraining order, disputing the notion that the pipeline is a "common carrier" as Texas law requires for eminent domain and questioning whether the company adequately considered the Caddo tribe artifacts on Crawford's land.

On Monday, County Court at Law Judge Bill Harris said the company couldn't go forward with construction on the land at least until a Feb. 24 court hearing. TransCanada had refused to consent to a "standstill" agreement that would have prevented work on the pipeline until March 1.

"I would never categorize myself as an environmentalist," Crawford told HuffPost. "I'm just a steward of my family's land." She lives with her 78-year-old father on a 600-acre farm near Paris that her grandfather bought in 1948. "I have no political affiliation," she said. "I'm just a girl that wants to protect a thing my grandfather bought."

The farm owner also alleges that TransCanada behaved in a "duplicitous" manner when it claimed it had already secured all the necessary permits for the pipeline.

"The eminent domain process is well established, and we follow the process that is set out by law in each state," TransCanada spokesman Terry Cunha said in a statement. "In Texas, we already have easement agreements in place with over 99 per cent of the landowners along the in-state portion of Keystone XL."

Despite the Obama administration's recent decision denying an environmental permit for the pipeline, which would carry oil from the Alberta tar sands to Texas refineries, TransCanada is pressing forward with its plans to apply for another permit. The company announced in an earnings report on Tuesday that it expected the pipeline to start operating in 2015.

STOP Congress from imposing tolls on FREEways in ALL 50 states!

Call your U.S. Senators & members of Congress NOW!


Thank you for your help in rallying the grassroots to STOP Congress from imposing tolls on existing freeways in ALL 50 states, selling our roads to private corporations in sweetheart deals, and making the taxpayer subsidize loser toll projects with more borrowed money from the Fed. IT WORKED! Congressman Quico Canseco filed an amendment to BAN tolls on existing FREEways (read more here) in the House, and Sen. Kay Bailey Hutchison again filed her amendment (that's been in place for Texas since 2007) in the Senate.

In fact, our efforts were so effective and we were gaining so much momentum, that the toll industry put out an alert to STOP the ban on tolling freeways. Within hours, the House leaders pulled the transportation portion of the bill until at least the last week of February.

Congress won't go back into session until the last week of February.

Sen. John Cornyn addressed the Texas Transportation Forum February 17, 2012, and he lobbied for the sale of our sovereign Texas public roads to private corporations in PPPs (that result in toll rates as high as 75 cents PER MILE, the equivalent of adding $15 to every gallon of gas you buy!). He needs to hear from us on that.



STEP 1 -
Call your U.S. Senators & ask them to support the Hutchison ban tolls on existing STATE and FEDERAL freeways and to STRIP PPPs & TIFIA loans OUT of the transportation bill.

Call the Capitol Switchboard at (202) 224-3121 or find your U.S. Senators here.

STEP 2 -
Call your member of Congress and ask him/her to ADD the Hutchison "Freedom from Tolls" Amendment to ban tolls on existing freeways - BOTH state and federal - to HR 7 and STRIP PPPs & TIFIA loans OUT of the transportation bill.

Find out who your member of Congress is here or call the Capitol switchboard at (202) 224-3121.


STOP them from selling off our infrastructure to foreign entities, from borrowing more money from the Federal Reserve to lend to states to prop-up toll roads that can't pay for themselves, and from IMPOSING TOLLS ON FREEways in ALL 50 states! (Details below)

If you have contacts outside Texas, we need their help in spreading the word to the grassroots across America about this horrible highway bill dubbed the American Energy & Infrastructure Jobs Act of 2012.

It's been 7 years since Congress passed the last federal highway bill. Now its racing through Congress at the speed of light -- why? Because they want to sell-off our public roads to private corporations, raise your taxes through tolls, and lift the ban on imposing tolls on existing highways. There are 500 toll projects being contemplated in Texas alone!

An amendment to allow tolls on ALL existing interstates in all 50 states is expected to be presented on the floor by Senator Carper of Delaware. Imposing tolls on existing freeways is a massive DOUBLE TAX -- charging motorists an additional tax, a toll, to use what they've already built and paid for!

The current House Bill, HR 7, only bans tolls on existing FEDERAL interstates. It GUTS the ban on imposing tolls on existing STATE highways -- a ban that Sen. Kay Bailey Hutchison put in place for Texas since 2007.  The fate our public freeway system is under attack!

Sneaky new tax

Government has figured out that instead of solving congestion, they can manipulate it for a profit (by keeping your free lanes congested and forcing people to pay a premium to get mobility). They're terrified to raise the gas tax, but have no problem imposing tolls on all new capacity to our roads, even on EXISTING lanes that we travel today without tolls.

It costs 1-2 cents per mile to travel a gas tax funded freeway, but anywhere from 20 cents a mile up to 75 cents per mile to use a toll lane. It's an explosion in our cost to travel. A gas tax funded road costs PENNIES a day, a toll road costs DOLLARS a day and THOUSANDS more in new taxes per year.

The way toll roads are being financed today, ALL Americans are paying to build them through subsidies of taxpayer money like gas tax, but you won't be able to use them without paying a toll, too (a DOUBLE TAX)! So whether you can afford to take these toll lanes or not, you're paying for them. This notion that tolls are user fees is a myth when you look at how heavily they're subsidized by ALL taxpayers. You're also paying for them through a higher cost of goods that gets passed onto consumers.

Selling us out

Both the House and Senate versions of the federal highway bill, dubbed the American Energy & Infrastructure Jobs Act, include public private partnerships (or PPPs) that sell-off our public roads to private corporations in 50-99 year government-sanctioned toll road monopolies. PPPs use heaps of public money to socialize the losses,  while they privatize and GUARANTEE profits for the private operators.

Columnist Michelle Malkin calls PPPs 'corporate welfare.' Fannie Mae and Freddie Mac were some of the first PPPs and eventually caused the sub-prime mortgage crisis and subsequent $1 trillion dollar taxpayer BAILOUT!

The TIFIA loan program is a HUGE source of funds used to subsidize ill-conceived toll roads that can't pay for themselves. It's the primary pot of taxpayer money given to these private, foreign corporations seeking to takeover our U.S. highways using public private partnership toll road contracts.

NOTE: The first TIFIA loan was awarded to a private consortium in a PPP deal on the South Bay Expressway in San Diego. It went bankrupt less than three years later due to traffic projections that were off by over 40,000 cars per day! Taxpayers had to accept a write-down of nearly $80 million of a $172 million federal TIFIA loan in yet another taxpayer bailout for private corporations.

The TIFIA loan program is all BORROWED money from the Federal Reserve, so who will have to bailout these toll roads when the cars don't show up as they didn't in San Diego along with other projects across the country? YOU and me, the taxpayer.

Think about it - PPPs give private corporations the power to TAX! They are granted the power to levy unlimited toll taxes on the traveling public - and we can't hold corporations accountable like we can politicians at the ballot box. This is why politicians LOVE PPPs. They get to OUTSOURCE the taxation to their special interest buddies and makes us pay back our own money with interest through tolls!

Rather than get rid of the failed TIFIA loan program, the federal highway bill INCREASES TIFIA funding by nearly TEN times from $100/yr to $1 BILLION/yr! Current law requires the taxpayers to be   paid back first, now in the bill as written, private interests would get paid back first and taxpayers would be paid back last.
PPPs also contain non-compete clauses that prohibit or penalize the expansion of free roads surrounding the privatized toll roads, guaranteeing congestion on the free routes.

Also, PPP toll contracts allow private entities to benefit from the use of eminent domain, and they result in toll rates as high as 75 cents a mile. That's like adding $15 to every gallon of gas you buy!

CBO: Toll roads not free money

Link to article here.

One way this CBO report is errant, is its claims the cost to taxpayers when a toll road is private is roughly the same as when it's a public toll road. Not so. Data shows toll rates in the hands of private corporations (who do not answer to the taxpayers) that grant a government-sanctioned monopoly to the private sector, are substantially higher than publicly-run toll projects, and both are substantially more costly than gas tax funded roads. Private companies bake-in profit and their cost to borrow money is higher than the government. The report also claims private toll projects are done more efficiently and cost effective, which is also untrue since public private partnerships are not low-bid contracts (its called 'best value' bidding) and since they're granted a monopoly, there are no normal competitive pressures to keep cost down.

Congressional Budget Office: Toll Roads Are Not Free Money
Government report shows that tolling relies on complicated financing models to hide the costs and risks that are passed along to the public.
The Newspaper.com

CBO report coverToll roads are all the rage with politicians across the country. Both Democratic and Republican lawmakers see "public-private partnerships" as the solution to their transportation funding difficulties by turning to the private sector to pay for infrastructure improvements through tolling. A report released last month by the non-partisan government analysts at the Congressional Budget Office (CBO) found the purported benefits of this financing mechanism were mostly illusory, as taxpayers end up paying roughly the same amount either way.

"The case is sometimes made that using funds from private capital markets to finance roads can increase the resources available to build, operate, and maintain roads," the CBO report stated. "But the sources of revenues available to pay for the cost of a highway project -- whether it uses the traditional financing approach or a public-private partnership -- are the same: specifically, tolls paid by users or taxes collected by either the federal government or by state and local governments. Therefore, absent restrictions on governments' ability to borrow, there is no difference between the amount those governments could raise themselves and the sums that public-private partnerships could raise because the same resources are available to remunerate investors in either case."

CBO found that private projects do hold an advantage in finishing projects on time and in the most cost-effective manner since the private firm's profits depend on the road opening as soon as possible so that the tolling revenue can begin flowing. Cost overruns generally come out of the pockets of the private companies, whereas traditional public transportation bureaucracies tend to be less cautious in monitoring and controlling how tax dollars are spent. Labor costs are generally 25 to 40 percent lower for private projects not bound by pricey labor union contracts. Only a superficial and incomplete analyses, however, conclude that the private financing model has a distinct cost advantage when all factors are considered, CBO found.

"In order to properly assess the difference in costs between securing financing through the traditional approach (generally as public debt) and obtaining it by private means, it is necessary to account not only for the interest paid on money borrowed for the project but also for the costs associated with the risks borne by taxpayers and the costs of financial transfers -- in the form of subsidized interest rates and advantageous tax treatment -- from the federal government to states and localities," the report explained. "If such a comprehensive measure is used, the costs of private and public financing are roughly comparable."

CBO analyzed the 21 toll road projects that have been completed in the US over the past twenty years at a cost of $16 billion. Though this is a small amount compared to the $1 trillion spent on roads over the same period, it accounts for 30 to 40 percent of new highway capacity. The rush to tolling began in 2008, and the real-world effect has then most tolled highways were built upon faulty models that overestimated traffic levels and tolling receipts. As a result, many of the projects went bankrupt, including the Camino Colombia Bypass in Texas, the Southern Connector in South Carolina and the South Bay Expressway in California. The public was frequently left paying for the mistake.

"The South Bay Expressway, which had received some financing from the federal TIFIA program, illustrates what can happen to taxpayers as the ultimate equity holders," the report explained. "The project filed for Chapter 11 bankruptcy in March 2010, finally emerging in May 2011. The new financing and ownership structure required by the bankruptcy court imposed a loss of 42 percent on federal taxpayers, replacing the original TIFIA investment with a package of debt and equity worth only 58 percent of the original investment."

The costs are also passed along to the motorist. On the Chicago Skyway in Illinois, tolls fell in real terms by 25 percent from 1989 to 2004 while under public control. Under private control since 2005, they have increased 60 percent.

A copy of the report is available in a 4.5mb PDF file at the source link below.

Source: Using Public-Private Partnerships to Carry Out Highway Projects (Congressional Budget Office, 1/6/2012)

President mum about his tax increase; Federal Highway bill underway

President mum about his tax increase

By Terri Hall, San Antonio Transportation Policy Examiner
February 2, 2012

When President Barack Obama referred to his infrastructure plan in the State of the Union speech, he conveniently left out his plans to dramatically increase Americans' taxes on driving through toll roads and public private partnerships (P3s).

Here’s what he said:

Building this new energy future should be just one part of a broader agenda to repair America’s infrastructure.  So much of America needs to be rebuilt.  We’ve got crumbling roads and bridges; a power grid that wastes too much energy; an incomplete high-speed broadband network that prevents a small business owner in rural America from selling her products all over the world.

During the Great Depression, America built the Hoover Dam and the Golden Gate Bridge.  After World War II, we connected our states with a system of highways.  Democratic and Republican administrations invested in great projects that benefited everybody, from the workers who built them to the businesses that still use them today.

In the next few weeks, I will sign an executive order clearing away the red tape that slows down too many construction projects.  But you need to fund these projects.  Take the money we’re no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.

The speech went on for more than an hour, and three paragraphs is all the President had to say about infrastructure, and yet the U.S. House of Representatives is taking up its version of the Federal Highway bill this week. So there is much ado in Congress about our nation’s highways, and little acknowledgment or solutions posed to address the chronic underfunding by Congress other than levying toll taxes. Obama and his Secretary of Transportation Ray LaHood have made tolling and P3s the centerpiece of the President’s transportation agenda since taking office.

So there is much ado about our nation’s highways, and little acknowledgment or solutions posed to address the chronic underfunding by Congress other than higher taxes (whether through levying toll taxes or as we see in the House version -- taxes on energy production). Obama and his Secretary of Transportation Ray LaHood have made tolling and P3s the centerpiece of the President’s transportation agenda since taking office.

The House wants a bill that’s funded with existing gas taxes collected, but also relies on a new tax on oil drilling to bridge the gap between needed road funds and the shortfalls in the gas tax. Due to Congress’ failure to address issues with the gas tax or end the practice of wasteful earmarks (ie - diversions and overspending), there is a major shortage of funds to properly address our nation’s infrastructure needs. Further starving the gas tax also translates into unrestrained reliance on tolling to make-up the shortfalls. Congress has been content not to prioritize funding for roads (the arteries of daily living), and all too happy to bloat spending in just about every other arena.

However, both the House and Senate wish to increase debt and borrowing by increasing the TIFIA loan program by nearly a factor of ten up to $1 BILLION a year. TIFIA loans have provided the lifeblood for P3s that sell off our public roads to private equity sharks. The first such loan went to subsidize a private corporation on a deal in San Diego on its South Bay Expressway that summarily went bankrupt 3 years later. The taxpayers lost nearly $80 million on the deal and the Council of Governments (ie - taxpayers) had to bail it out and take it over.

So a continuation of the TIFIA program is fiscally reckless and tantamount to a special interest giveaway that’s rife with abuses. P3s are government-sanctioned monopolies that charge taxpayers a premium to access their own public highways -- 75 cents a mile, like adding $15 to every gallon of gas you buy -- much higher than publicly-run tollways. P3s also include sweetheart provisions that guarantee congestion on the free lanes through non-compete agreements.

The President devoted much of his speech to jobs and the economy and clearly wanted to show his sympathy for those in difficult economic situations. But to ask Americans to pay the equivalent of $15 for a gallon a gas in order to get to work or get their highways fixed, and to act as if the Administration is not interested in raising taxes, is disingenuous at best.

Americans must voice their concerns about this oppressive tax increase on driving before Congress passes and the President signs such a punitive, irresponsible federal highway bill.


Link to article here.

Group aims to thwart transport bill
By Adam Snider and Burgess Everett - Politico
February 1, 2012

The Club for Growth is trying to ensure that conservative Republicans revolt against a massive surface transportation bill.

The group sent a “key vote alert” Wednesday urging members to oppose the bill. It also said their votes would be part of the organization’s 2012 scorecard — meaning conservatives would be docked if they voted for the five-year, $260 billion measure.

Even procedural votes might be on the scorecard, the Club for Growth warned.

“Simply put, this is a massive 846-page bill that doesn't cut any spending at all. Indeed, it spends at least $30 billion more by supplementing fuel taxes with additional revenue from other sources,” the group said in a statement ahead of a Thursday markup at the House Transportation and Infrastructure Committee.

Rep. John Campbell (R-Calif.) said the alert has moved him into the undecided camp.

"I was going to be for it," Campbell said, explaining that he now wants to find out more about why the group opposes the bill. "The scorecard is less of an influence than the fact that there's something they don't like."

Large Republican defections would be devastating to the bill’s chances of clearing the House. Leadership doesn’t expect to win over any Democrats.

“The whip stood up in our conference today and said the bill, as currently written, we’re going to have to pass it with 218 Republican votes,” Rep. Steve LaTourette (R-Ohio) said. He listed problems he has with the bill that include “divisive” truck weight issues, anti-labor provisions and ending the Transportation Enhancement program, so “now you’re pissing off all the people that ride bicycles and like to walk.”

LaTourette hopes the bill can be changed to attract wider support.

“This has to be a bill that everybody signs off on that actually puts people back to work. It can’t be an ideological punching bag, or else it’s dead,” he said.

Rep. Bill Shuster (R-Pa.), chairman of T&I’s railroads subcommittee, doesn’t see why the Club for Growth would oppose the bill.

“They called it another bloated bill; there’s tremendous reform in this bill,” he told POLITICO between House votes Wednesday. “If they want to go from A to Z overnight, it can’t be done. This is a significant step in the direction I think they want ultimately, and that’s to have less government.”

Club for Growth President and former Rep. Chris Chocola (R-Ind.) voted for the much-criticized 2005 transportation bill that spent billions of dollars more than the gas tax took in and included about 6,300 earmarks.

Interviews with multiple freshmen generally showed a wait-and-see approach. Freshman Rep. Andy Harris (R-Md.), a Transportation and Infrastructure Committee member, said it was “way too early” to declare a Republican uprising.

The swift process, with the bill’s introduction on Tuesday and markup two days later, may also unite Democrats with Republicans in opposition.

“There are some on the right that are looking at this the same way I am,” said Rep. Nick Rahall (D-W.Va.), the ranking member on the transportation committee. “And that is in regard to transparency, and the right to know what’s in a bill. They were not consulted in drafting this bill.”

Rahall said he will try to postpone Thursday’s markup until next week.

Jonathan Allen contributed to this report.

This article first appeared on POLITICO Pro at 8:27 p.m. on February 1, 2012.

NYP: Public private 'poppycock'

Link to article here.

‘Public-private’ poppycock



Last Updated: 12:21 AM, January 31, 2012

Posted: 10:18 PM, January 30, 2012

Gov. Cuomo wants to “build a new New York” — but he doesn’t want to pay for it. To get billions for construction, he’s turning to “public-private partnerships.” Sorry. Just as there’s no free lunch, there’s no free bridge.

Three weeks ago, in his State of the State Address, Cuomo vowed to “improve or replace more than 100 bridges.” The marquee project is a new Tappan Zee Bridge, to replace the one that’s falling down. It could cost from $5 billion to more than twice that.

In the real world, there’s one way to pay: Hike tolls (now $3 to $5 for cars), and, if needed, borrow the rest. But “even a significant toll increase is unlikely to fully fund the project,” as Merrill Lynch and Loop Capital warned then-Gov. David Paterson in a report two years ago. Charge nosebleed tolls and too many drivers would choose another route.

New York could borrow more, but taxpayers (already on the line for lots of existing state debt) would have to pay back the money.

Cuomo would leave these worries in the rearview mirror. He promises to minimize state bridge spending by “leverag[ing] state investment by a multiple of 20 to 1.” For every dollar the state spends, somebody else would put in $20.

Last week, Cuomo dropped a clue as to who and how. He attended an event headlined “Successful Public-Private Partnerships: Creating Jobs by Reinvesting in Our Infrastructure.” Under a standard “PPP,” a global company would borrow money and build the bridge, then collect the tolls and pay back the debt, making a tidy profit for as long as a century.

That sounds great — except for one detail. Whoever builds the Tappan Zee — the state, a big firm like Skanska or the Queen of England — the numbers don’t add up. The project still costs the same. And people will still pay only a certain toll before they stop going.

In fact, the PPP finances could be worse. The state can borrow tax-exempt, meaning it has lower borrowing costs. (Investors in state bonds don’t mind getting a lower interest rate, because they get the tax break.) Private companies can’t do that.

The difference could be big. For the state to borrow $10 billion for 30 years might cost $620 million annually — whereas a private company would pay $753 million. That annual gap works out to $2.1 billion today, in one lump sum — enough for many little projects.

Wouldn’t the private sector be so efficient that it would save money building and running the bridge? Maybe not. Private companies are efficient because they have to compete; this private company wouldn’t compete with anyone. It would be a monopoly, like Con Ed. Its captive “customer” would be the state.

The same is true of Cuomo’s proposal to build a convention center and casino in Queens. Genting, Cuomo’s preferred company, would pay the $4 billion, but only if New York gives it a regional monopoly on gambling, plus tax breaks. This isn’t healthy competition, but a protection racket.

As the state’s financial advisers said two years ago, a successful PPP requires “complex negotiations,” “high procurement costs,” “time-consuming implementation” and “continuous monitoring of service and quality standards.”

Hmm. A state that can’t build stuff the easy way won’t do better the hard way. Involving the private sector doesn’t eliminate the risk that taxpayers and drivers might get stuck with the bill for politicians’ giveaways, either.

Last week’s PPP event offered a clue to that, too. Although it covered a topic that could affect tens of billions of dollars in future state and toll-payer spending over many decades, the sponsors — the Democratic Governors’ Association — barred the door to the press, even if reporters promised not to eat the food.

You weren’t welcome unless you had thousands of dollars — up to $50,000 — to donate. Some toll. Nor has Cuomo told the public which business executives decided it was worth it.

Yet this wasn’t politics but policy. What were they afraid we’d learn?

The real answer is in the budget. New York spent $132.7 billion last year — including $86.3 billion on social services and education. It should be able to find bridge money the old-fashioned way: responsible budgeting. No one wants to donate thousands of dollars for that.

Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.

Read more: http://www.nypost.com/p/news/opinion/opedcolumnists/public_private_poppycock_Y1C0QYyVj2MOsAS1cheOzH#ixzz1lNyEJwb2

MoPac to be tolled and sold-off to private corporation

Link to article here.

MoPac toll lane project finally gaining speed

By Ben Wear

Published: 9:49 p.m. Sunday, Jan. 29, 2012

The move to expand MoPac Boulevard, which for several years has crawled along like 5 p.m. traffic on that overloaded highway, is about to enter the express lane.

"I would characterize it as a green-light go," Mike Heiligenstein, executive director of the Central Texas Regional Mobility Authority, said last week.

A federally required environmental study is in its final stages, with approval likely in the fall. The mobility authority, deputized by the Texas Department of Transportation to develop the project, has refined what it will do: add a fourth express toll lane on each side of MoPac (Loop 1) from just north of Lady Bird Lake to near Parmer Lane in far North Austin.

Alongside the road from West Sixth Street to north of RM 2222, at a cost of about $20 million, would be 7.1 miles of tan-and-white, concrete sound walls 8 to 20 feet high. This would complete a quest of more than a decade by neighborhoods alongside MoPac for some relief from the noisy highway.

Construction on the $250 million project should start by 2014, agency officials say. If so, those two express lanes would be open to traffic by 2016. A significant portion of the cost would cover the construction of new flyovers connecting the toll lanes and West Cesar Chavez Street. The new lanes from the river to RM 2222 would be created largely from the existing pavement by narrowing lanes slightly and reducing the width of shoulders. North of 2222, the project generally calls for adding pavement.

The toll lanes would be dynamic, meaning the tolls would fluctuate depending on the speed of the traffic — as the number of vehicles in the toll lanes increases and traffic slows, the tolls would rise to discourage more drivers from entering those lanes.

Partnership possible

The mobility authority is strongly considering using a public-private partnership to finance, build and perhaps even operate the toll lanes, a departure from the agency's stance just a few years ago when such long-term agreements fell into disfavor across the state. After soliciting interest from the toll road industry last year, the authority heard from 22 companies or consortiums that might want to bid on some sort of construction, financing or operations deal.

The agency, in building and expanding the 183-A tollway in Cedar Park and beginning construction on the Manor Expressway (a tollway along U.S. 290 East), has racked up about $800 million in debt, which officials said could increase interest rates for further borrowing and thus nudge them toward an arrangement where the MoPac debt would fall on the private sector.

But officials emphasized that the project could still be done in a more traditional way, with the authority borrowing money on the bond market, then building and operating the toll lanes. A decision on which direction to go should be made this year or early next year.

Either way, the authority already has a commitment from TxDOT for $67.5 million, more than a quarter of the project cost, and has applied for a $72 million low-interest loan through a U.S. Department of Transportation program. Bond financing, or the private sector, might have to supply less than half the project cost.

Tolls would be used to pay back that federal loan and other borrowed money, support annual operating costs and, the authority hopes, spin off profit that could be used to build other roads.

"We look at the (traffic and revenue) projections, and it looks really strong," Heiligenstein said. "Because on MoPac, there ain't an alternative, and it's just going to get more and more crowded. You're not dealing with some area that's not fully developed like 183-A or the Manor Expressway. You're dealing with a known quantity."

Either way, what ends up on the ground will be another new transportation animal for an area that has seen a menagerie of change in the past decade.

Changing rates

Many large U.S. metro areas over the past generation have installed on urban highways some version of high-occupancy vehicle lanes, known colloquially as car pool lanes, sometimes allowing solo drivers to use them as well if they pay a toll. Central Texas never joined that movement, and the MoPac express lanes won't change that.

Instead, the added northbound and southbound lanes would be open only to those willing to pay a toll, to transit buses, to registered van pools and to emergency vehicles.

But the real departure would be the nature of the tolls themselves, which would change minute by minute depending on the level of traffic in the lane. The point, Heiligenstein said, would be to keep the toll at a level calibrated to keep speeds in the lane at 50 mph or more.

If traffic gets too thick and traffic begins to slow, the toll would instantly increase in an effort to discourage some people from choosing to use the express lane. Signs well upstream of the express lane entrances would alert people to the current toll rate. Though the Katy Freeway on Interstate 10 and U.S. 290 in Houston have something similar (with a schedule of tolls tied to the hour of the day), no other city in Texas has a road in place using constantly changing tolls.

"We'll provide reliability," Heiligenstein said. "If we don't provide a lane that has a reliable time between Point A and Point T, then we've screwed up."

Actual rates not set

The toll lanes, which would be on the left side nearest the center median, would be segregated from MoPac's three free lanes on each side by a series of plastic pylons. Drivers would be able to enter the northbound lanes only at the south end (through new bridges from West Cesar Chavez Street and the MoPac bridge over the lake) and north of RM 2222, where drivers could also exit. Southbound drivers would enter near Parmer Lane and south of Far West Boulevard, where they could also exit. New bridges at the south end would allow direct access to West Cesar Chavez and downtown.

So, how much might it cost to go the 11 miles from Cesar Chavez to Parmer? Wilbur Smith Associates, which has been doing traffic and revenue studies on the project for the mobility authority, has indicated to officials that the project would be financially feasible with a top rate initially of $2.57 in 2011 dollars. Since the road wouldn't open until 2016, that would equate to about $3 on opening day. Officials emphasized that the actual toll rates have not been set yet and that Wilbur Smith later will produce a more rigorous "investment-grade" study.

Heiligenstein foresees a minimum toll of about 50 cents to go the length of the road, even when MoPac is deserted late at night. In reality, few people are likely to take the toll lanes at times like that, but Heiligenstein has said the authority wouldn't want to confuse the public by having the lanes be free part of the time.

The agency, which in the past couple of years has hosted several open houses about the project along the MoPac corridor, anticipates having two more in March, as well as a public hearing that month required under federal law for the environmental study.

The mobility authority has established a website, www.mopacexpress.com , with more information about the project.


Link to article here.

Will the new MoPac toll lane project cater to the rich and leave the rest of us behind?

Ben Wear, Getting There

Austin American Statesman

Published: 9:32 p.m. Sunday, Jan. 29, 2012

Those of you who paused on the front page on your way to my column (yes, I know, it's hard to wait) might have noticed a truly excellent story about MoPac Boulevard (Loop 1) and the unusual express toll lanes in the works.

What officials have in mind for what will be a fourth lane added to each side of MoPac north of Lady Bird Lake are "dynamic" tolls, charges that would change minute by minute in response to traffic volume. These new-fangled toll lanes, along with other forms of so-called congestion pricing, have been proliferating around the country, and enough of them are in existence (30 urban highways have them, and 11 are under construction) that the U.S. Government Accountability Office decided it was time to take a look.

The GAO's verdict: Such lanes do in fact ease traffic, including on nontolled lanes nearby, but raise worrisome questions about transportation equity between the well-heeled and people with holes in their heels.

The 14 projects the agency reviewed "have generally shown reduced congestion, increased speeds, and decreased travel times in the priced and unpriced lanes," according to the report released Jan. 12. However, in some cases the projects actually added lanes to the road — as will be the case with MoPac — making it hard to differentiate between the congestion-reducing effects of variable toll rates and simply adding another lane.

Both factors will be at work on MoPac, according to Mike Heiligenstein, executive director of the Central Texas Regional Mobility Authority, which is putting together the express lanes project.

The dynamic pricing, he argues, will assure that something close to the theoretical maximum of 1,800 to 2,000 cars an hour go through that lane, even at the heart of morning or evening rush. Those cars right now are trudging along on MoPac's six existing lanes, or perhaps on parallel arterials like Exposition Boulevard, Jefferson Street or Lamar Boulevard. Or maybe even, for the transportation cognoscenti (people who, say, grew up in Tarrytown) on even more obscure neighborhood streets.

That's one answer, Heiligenstein said, to the equity question. Those people paying to drive much faster will make it possible for the rest of us to drive less slowly in the lanes alongside. Beyond that, he said, the agency's experience with its only currently operating toll road (183-A in Cedar Park) is that 80 percent of drivers use the road infrequently, once a week or less.

The other 20 percent, pretty much everyday users, pay the bulk of the tolls that in turn pay off the debt used to build the road in the first place.

"Now those 20 percent may be in Cadillacs," Heiligenstein said, perhaps showing his age with that choice of luxury car, "and if they are, fine. They're paying for those 80 percent who want to use it once or twice a week."

Meanwhile, traffic on parallel and free-to-drive U.S. 183, a nightmare before 183-A opened in 2007, is now relatively tranquil.

Presumably, a similar mix would occur on MoPac, with the hoi polloi (including newspaper writers) using it sparingly when circumstances make it logical to pay $3 or $4 to get north or south quickly.

Undoubtedly however, those with money will be able to use the variable-price lanes more often than those on a budget.

It may become something of a spectator sport for those caught in MoPac congestion to count the number of Lexuses, Mercedeses and Escalades that fly by in the express lane.

It ain't necessarily fair. But in the words of John F. Kennedy (who certainly could have afforded to use this lane), life is unfair. And it will help pass the time.

Pro-toll Wentworth, Ames-Jones lie about being anti-toll in debate

Watch the report here.

The claim that ALL three candidates are against toll roads is PURE fiction!  Both Jeff Wentworth and Elizabeth Ames Jones have voted to toll our local roads. Wentworth, more times than I can count, but here's the major ones: HB 3588, HB 2702, SB 792, HB 563, SB 1492.

Ames Jones voted to toll 281, 1604, I-35 and most of our local roads in July 2004 when she was a State Rep. and sat on the MPO.

I just can't believe Wentworth and Ames Jones had the unmitigated gall to lie to that group and then to have this story broadcast to San Antonio that all three are anti-toll when two of them are the REASON we're still facing toll roads all over town (57 toll projects are in the current MPO plan!). It's unbelievable! San Antonio deserves to know the truth!

Wentworth's law firm represented Zachry when Cintra-Zachry slapped that unsolicited bid on TxDOT's desk to takeover and toll 281& 1604 in 2005, and Wentworth blocked that contract from being subjected to the moratorium on those foreign-owned toll roads back in 2007. It wasn't until we went on radio to expose the connection that Wentworth backtracked and we got 281 & 1604 yanked from Cintra/Zachry. He's totally ingratiated himself with the highway lobby and pro-tollers his entire career. There is NO WAY he should be allowed to make such a claim and get away with it!

All candidates claim to be anti-toll in Senate District 25 debate
By David Sears
January 19, 2012


State Sen. Jeff Wentworth has been the representative for District 25 for two decades and he is looking to run again -- but not without a challenge.

Railroad Commissioner Elizabeth Ames Jones and Dr. Donna Campbell are both looking to take Wentworth’s chair at the state capital.

The three candidates participated in a debate sponsored by the Republican Men’s Club of Bexar County and the San Antonio Tea Party at Paesanos Restaurant on Thursday.

Once again, Wentworth’s conservatism came into question.

"It's not the record of the kind of person who is a reflection of your conservative principles and values," Ames Jones said.

“I’ve never been considered anything but conservative," Wentworth replied.

Campbell, claiming the "outsider" mantra, tried to stay above that fray and went direct.

"When I win the primary, I win the general," Campbell said.

The three candidates agreed on some issues, like no toll roads and getting rid of "ObamaCare."

There was disagreement on the topic of college tuition for illegal immigrants.

"I’m not for subsidizing illegal immigrants in any way shape or form,” Jones pointed out. But that statement was challenged by Wentworth.

"I voted no. Elizabeth Ames Jones, as state rep, voted yes to give tax subsidies to those illegal alien immigrants," Wentworth said.

Once again, Campbell had her own opinion, especially when it came to educating illegal immigrants from K through 12.

“ Does it really make sense to use taxpayer dollars to educate a child that when they graduate they cant legally be hired in our state?" Campbell said.

Still no word on when a primary election might take place since redistricting is still in the courts.

Ireland's PPP toll roads failed experiment

Link to article here.

"(We) have three 'ghost' train stations in Dublin for developments that failed and toll roads with so few cars using them that some companies who took part in the public private partnerships to build the roads are now in serious financial trouble," the minister said.

It would take us 100 years to fund new Metro -- Leo

By Cormac Murphy
Saturday, January 14 2012

METRO North would not be completed for 100 years with the money currently available, Leo Varadkar has admitted.

Even if he used all the cash available to him, it would take a century to build the proposed light rail system, the Minister for Transport said.

In a letter to Fingal county councillors, Mr Varadkar said he is "as disappointed as anyone that Metro North has been deferred indefinitely".

However, it is "simply not possible" to fund it at the moment, he added.

About €1.2bn went on transport in 2011 and the figure falls to €0.8bn by 2016.

The vast majority of this will go on 'close out' payments for the motorways already built and maintenance of existing roads and railways. It leaves only about €40m a year for new roads and railways. "Metro North would have cost €3.2-3.7bn. Even spread over 10 years, that would be €400m a year. I have €40m a year. At that rate, getting the Metro to Swords would take 100 years," Mr Varadkar said.

"It just isn't affordable," he added, explaining that even if Metro North was built, fares would have to be €20 each way to cover the operating costs as "we would not be able to subsidise it". The minister raised the possibility of substituting the underground proposal with an above-ground option.

"I hope that someday it will be possible to built Metro North or perhaps an on-street project would be cheaper," he said.

He also said the transport investments made by the private sector have not worked out well.

"(We) have three 'ghost' train stations in Dublin for developments that failed and toll roads with so few cars using them that some companies who took part in the public private partnerships to build the roads are now in serious financial trouble," the minister said.

The Government announced late last year that Metro North, along with Dart Underground, the Thornton Hall prison and the Grangegorman DIT campus project, would be deferred.

TxDOT reverses promise to expand free lanes on I-35

Link to article here.

TxDOT chief dials back promise that I-35E initial phase will include both free, toll lanes; decision -- and funds -- still uncertain, he says
By Michael Lindenberger/Reporter
Thu., Jan. 5, 2012

TxDOT executive director Phil Wilson called a few minutes ago to greatly dial back his agency's commitment to the finding enough money to build the initial phase of Interstate 35E with both toll and free lanes.

As noted below, he joined a half-dozen officials in our offices earlier this week to express strong support for the $4.7 billion reconstruction of the highway. It's one of the state's top three priorities, he said.

In those discussions, he said TxDOT would work with its local partners to find at least $1.4 billion for the first phase of the project. That amount is more than twice the $600 million in public money previously set aside for the project.

But he apparently got ahead of himself. "that was way over the top from where I should have been. I should have caveated that," he said.

He had meant to say only that the agency views the new total of $1.4 billion or more in public money for the project "aspirationally."

He said it is true that some state money will be added, and that he has been assured by local partners that they, too, are likely to add to $600 million already set aside to boost the total. But how much in all, and from whom, is yet to be determined, he said.

Here's why this is critical: If the money -- all of it -- isn't there for sure, then the department can't guarantee that it would be able to afford to add new free lanes at both ends of the 28-mile project during its first stage.

Worry about that possibility -- namely, that new toll lanes would be added at the Denton end of the project without any additional free lanes -- is what prompted the meeting at The News in the first place.

Wilson did re-confirm that if TxDOT and local governments can find all the money it needs, then $1.4 billion, or slightly more, to add the free lanes at each end of the project and the other improvements spelled out below.

But even then he had to offer a caveat: The ultimate configuration of the project, and how it will be staged, will be for the five commissioners who govern TxDOT to decide, not him. He'll only make a recommendation, he said.

There may be scenarios, he said, that even if the full $1.4 billion or more is found, it would still make more sense for the toll lanes to be built first.

He stressed that he wasn't suggesting that those scenarios are likely, only that the final decision on how the road will be built will be up to the commissioners, his bosses.

In a conversation earlier today, one of those commissioners, said it was too early for Wilson to promise that there will be enough money to afford the mix of tolled and free lanes in the first phase of the project. That's a decision for the commission to make, he said Commissioner Bill Meadows of Fort Worth.

"I don't think you can promise that yet," Meadows said. "It will come down to which path enables us to be the better stewards of public funds, and to offer drivers the most (highway) capacity for the dollars spent."

For his part, Wilson said he had intended to convey a simpler message: TxDOT values the I-35E project highly, he said. It will find some money -- but how much isn't clear -- to help make it a reality. And it is committed to working with local partners to do so.

"TxDOT wants to do this project," he insisted.

Note: Original story follows below.

TxDOT chief, local officials sing new tune on I-35E; free lanes will be added at same time as toll lanes, they promise

A troop of transportation dignitaries visited the newspaper this week to put out a fire on the subject of the widening of Interstate 35E between Dallas and Denton, a project that in terms of cost and length could make the reconstruction of LBJ for all its engineering complexity look pedestrian. (Photo above shows traffic jammed on I-35E, taken in March when Mary Horn and others were lobbying the Legislature for support for its widening. Staff photo by Denton Record Chronicle photographer Barron Ludlum.)

Folks in Denton, and elsewhere, have been bent out of shape ever since a Nov. 10 meeting in Arlington in which the Texas Department of Transportation delivered some bad news: The $4.7 billion project couldn't be built as advertised because it was just too expensive.

It would be both scaled down, and built in phases, the TxDOT brass said at the time. Then they added a humdinger: It may make most sense to spend the available public money on an initial phase of the project that would offer only toll roads to start.

It was just one of several competing ideas, but the logic of it stemmed from the fact that by building the toll lanes first, drivers could help pay for the rest of the project over time.

That went over like a lead balloon greased in pig waste in some corners of Denton County. The term "bait-and-switch" was thrown around, and the Denton Record Chronicle's editorialists got busy with comparisons to used-car sales tactics. Folks had been promised a Corvette and instead were being sold a Vega, the newspaper said.

But here's something worth noting: All the outrage has produced some results, and maybe a downright turnabout.

First came the meetings, first in Denton and then in our offices. Tagging along from Austin were TxDOT's new executive director Phil Wilson and the agency's chief engineer John Barton. Denton County Judge Mary Horn was here and so was Rep. Myra Crownover, R-Denton, and a half-dozen others.

Their message: The November scenario of building toll roads and only toll roads first will never happen.

And they left with two big promises, too: First, the state is going to find hundreds of millions of dollars to sweeten the pot for the first phase of the project, Wilson declared. Michael Morris of the North Central Texas Council of Governments said local governments are sure to pony up too to bring the total amount of public money available for the project's initial phase to at least $1.4 billion.

That's a big jump from the $600 million that had been publicly attached to the project as recently as a month ago.

And second, TxDOT and the others in the room promised that money will be enough to provide a mix of free and tolled lanes in the first phase, which is expected to take about five years to build. If all goes well, construction could begin by 2013.

So what will that $1.4 billion get us? Here's what TxDOT's Wilson and Bill Hale, the top engineer for the agency in Dallas, is promising can be built in the first phase:

A new two-lane toll road in the middle of Interstate 35E that run 23 miles from LBJ in Dallas, across the Lewisville  Lake, and into Denton County. These lanes, like their counterparts on the new LBJ Freeway, will be priced according to demand and during heavy traffic will carry toll rates that are several times the rates normal toll roads charge now.

There will be two of them total, instead of four as initially envisioned for the full project, and they will both be used for southbound traffic into Dallas in the morning, and for northbound traffic out of Dallas in the evening.

A new lane in each direction on the main interstate between Dallas and to just south of the lake, about a 14-mile stretch.

Those lanes will be carved out of mainly existing right of way, taking some of the existing shoulder. All four lanes, once the work is done, will be 11 feet wide instead of the 12-foot dimensions that are standard on interstate highways. (Denton Record Chronicle photo by Gary Payne at left is of John Polster from a candidate forum in 2005, speaking to Mayor Olive Stephens of Shady Shores.)

John Polster, the transportation consultant that has been championing this project for Denton County since before Moses climbed the mountain, said the narrower lanes will take some getting used to, but will be well worth the sacrifice since they will enable a fourth lane of traffic in both directions.

Polster, who favors cowboy boots and the occasional cowboy hat, said it will be like squeezing a size 12 foot into a size 11 boot. Like everything else about this over-sized project, he said, there are compromises that must be accepted.

Two new toll lanes, one going in each direction, on I-35E north of the lake, all the way to Denton.

One new free lane in each direction on the final segment headed into Denton, making three 11-foot lanes where just two 12-foot lanes now exist.

The rest of the final projects, whose exact scope is still in flux, would be built out over the next 5 years, using the revenues from the new toll lanes to help pay for it.

Not everyone will like the squeezed-in lanes. And there will be some folks who bristle at the toll roads altogether. But taken together, the elements of the new initial phase of project are a lot more robust than what was discussed in November.

What happened? I think we have to simply score this one a rare victory for the rabble-rousers.

At the November meeting, one guest was Denton County Commissioner Hugh Coleman. He didn't like what he was hearing, and told members of the RTC that they'd better understand that he had told his constituents that the project would be a mix of free and toll lanes. Anything short of that was going to cause problems for him, and by extension the entire project, he said.

Morris initially brushed his concerns aside, suggesting he do the math to figure out just how big a financial challenge the project was, given the state's limited resources.

But Hale tells me that eventually complaints like Coleman's -- and the echoes they found in the Denton media -- registered. State officials, and local elected officials, heard the problem and decided to do something about it.

"We really try to be transparent," Hale noted, "but sometimes we get so caught up in our acronyms that we miss what others are seeing."

Credit all around for making a course-correction.

But before we move on with the hosannas, a few notes of caution are appropriate.

First, these are promises by Wilson, who is the first non-engineer to lead TxDOT. He's a political guy, and I mean that in a good sense, and has his ear closer to the ground than his predecessors typically have. What we are seeing is his (and others') determination to change the message from November, something local elected officials were keen to do too.

But just where the money will come from has not yet been decided, or at least disclosed. He says the I-35E project is one of three priorities for the state, and that's a good thing for those hoping his bosses on the commission back up his promise with dollars.

Morris made promises, too, namely that local governments will help sweeten the pot for the first to bring that total funds available to $1.4 billion. There is no reason to believe that can't happen, but until it does, it's still a pledge, not a check.

Second, even the $1.4 billion Wilson has promised, won't be enough to make good on his promise without some additional good luck. Hale said engineers determined that satisfying Coleman's demand that each toll lane be accompanied by a new free lane in the final stretch into Denton added about $980 million to the initial $600 price tag for the toll-only approach.

Even I can add 600 and 980 and realize it's going to take almost $1.6 billion to deliver the project as envisioned. Hale said there's every confidence within the Greer Building (that's TxDOT's art deco headquarters) that either the remaining millions will be found or that the engineers can shave off $150 million in the costs.

Confidence is good, but, like a promise, it isn't a check. So it's worth keeping an eye on.

That leaves us with a final word of caution, or maybe just a puzzle.

The committee led by Morris has until March to recommend whether the project go forward as a privately financed deal or one financed by the state. If the project proceeds as a private deal, then the $1.4 billion can be used to attract investors who might pony up significantly more in return for the right to collect the tolls.

After all, agreeing to build a road using $1.4 billion in someone else's money is inherently less risky than building one using only $600 million of their cash. That might mean that we can get $2 billion or some other figure built right away.

But that's not the scenario Wilson sketched out. It struck me that they don't anticipate much interest from the private sector on this deal -- at least not now.

They may build what they can now with tax dollars, and get the road open and then sell the rights to future tolls in a better market and a stronger economy.

That would be an interesting about-face, after years of hearing from Austin and Arlington that the best way to build highways is to charge high tolls and leverage them with debt -- or private equity -- to get all the money they are worth in your pocket now.

The pay as you go model, now being touted, is exactly the course of action toll road critics have been arguing for years.

Leaving politics and ideology aside, it may be that they've simply found that the golden goose of privatization has stopped laying golden eggs -- at least in this economy.

After all, Polster noted that he had hoped the $600 million would leverage the full $4 billion for the project, and came out of his meetings with potential private toll firms "bruised, battered and beaten."

GA Governor emerges as leader against privatized toll roads

Link to Examiner article here.

Deal emerges as states rights hero against privatized toll roads
By Terri Hall
January 13, 2012

You gotta give him credit. Georgia Governor Nathan Deal learns quickly. He’s reversed his predecessor’s plans to privatize Georgia’s public roads in very controversial contracts known as public private partnerships (PPPs or P3s). Former Governor Sonny Perdue put a P3 program in place in 2009.

That was then and this is now.

After the explosive blowback from imposing tolls on EXISTING HOV lanes on I-85 in Gwinett County last October, Deal had to backtrack and slash toll rates by more than half in the first week. The Georgia Department of Transportation (GDOT) also increased the number of passengers needed to access the HOV lane from two to three, knocking many cars off the HOV lanes and into the general purpose lanes causing absolute GRIDLOCK on the free lanes. A not so ‘peachy’ public backlash followed in the Peach State. Deal pleaded with the Federal Highway Administration (FHWA) to revert that requirement back to two passengers for motorists carpooling, but the FHWA rejected it.

Shortly after the fall-out over the I-85 HOV/HOT toll lanes ensued, GDOT pulled back a P3 for a project known as “West by Northwest” on I-75 & I-575. The P3 industry was completely taken aback. They can’t fathom an elected official with the audacity to reverse controversial, anti-taxpayer policies that they lobbied into place so easily in 2009.

January 12, Deal blasted P3s in his State of the State speech as “ill-conceived sell-outs” of state sovereignty. Finally someone gets it! The backlash to P3s, particularly the over-sized Trans Texas Corridor P3, in Texas has been no less vehement. However, Texas Governor Rick Perry, unlike Georgia’s Governor Deal, dug his heels in and continues to shove P3s down Texans throats.

Perry has gotten away with saying one thing and doing another. His presidentially-timed book, Fed-Up, touts his commitment to states rights and state sovereignty. However, he’s sold off both to the highest bidder in plain sight through his support of P3s. The Texas voters have never held Perry accountable for his unspeakable acts of trampling on property rights (eminent domain for private gain) and selling off state sovereignty. But it’s interesting to note, in order to get re-elected on 2010, Perry did have to fool enough Texas voters into believing he had pulled the plug on the Trans Texas Corridor, though the TTC was still moving forward under a new name -- “innovative connectivity plan.”

It was the relentless cry from the grassroots that led to the complete repeal of the Trans Texas Corridor by the Texas legislature in 2011, AFTER Perry was re-elected in 2010. Yet Perry still brags about the Trans Texas Corridor on his presidential campaign web site. Perry’s total disconnect with the grassroots in his own state are reflected in his nepotism as he futilely clings to his presidential hopes. Yet even with the repeal of the Trans Texas Corridor, it’s still being built segment by segment through P3s that Perry and the Texas legislature just authorized in the 82nd legislative session in 2011, despite the grassroots opposition by more than 100 tea parties.

Elected leadership makes all the difference
Perhaps another reason for the reverse in Georgia is due to the fact that its transportation commissioners are also ELECTED not appointed. The grassroots in Texas advocated that the Texas legislature scrap the current five gubernatorial appointees that make-up the Texas Transportation Commission and replace them with elected leadership that answer directly to the PEOPLE for four years when the Texas Department of Transportation was under the sunset review process. But Perry insisted his current appointees stay in place so that he can continue to force his unpopular, anti-taxpayer, anti-property rights agenda upon Texans. As many Americans have discovered, Rick Perry and the Texas Legislature are controlled by special interests, not the public interest, and they’ve been allowed to get away with being tone deaf to the public outcry against P3s and tolling on existing roads.

As Georgians discovered, transportation commissioners now have the power to levy taxes through tolls with unprecedented ease by imposing tolls on existing freeways. When a P3 is involved, they hand that power to levy taxes over to a private corporation (essentially a form of fascism). Clearly, that doesn’t sit well with taxpayers or anyone concerned about state sovereignty over public infrastructure.

Permanent new tax - tolls in PERPETUITY
In the old days of traditional turnpikes, toll roads were implemented on brand new roads and financed using private toll revenue bonds with no risk to the taxpayer -- and without messing with existing corridors that are already built with tax dollars. The taxpayers also insisted that the tolls come off the road when it’s paid for.

Well, under P3s, dubbed “innovative financing,” the projects use heaps of taxpayer money (in Texas, up to three-quarters of the funding comes from the taxpayer, not the private entity), and the toll stays in place long after the debt is retired as the private entities cash-in through guaranteed profits for a half century or more. The toll rates ain’t cheap either -- on two projects in Texas, the toll rates will be 75 cents PER MILE to take the foreign-owned toll road.

In Texas, unelected public toll authorities use similar financing schemes as they borrow money against the revenue stream of one toll project in order to fund the next, necessitating the toll on the first project stay in place longer. When they do this multiple times over, called multi-leveraging, the tolls will end up staying in place in perpetuity because the financing for other projects depends on another’s revenue stream.

They’re also using borrowed money to secure more borrowed money and so on, many times over -- like building roads with credit cards. It’s the same sort of financing gimmicks that caused the sub-prime mortgage crisis that brought down the housing market and global economy. Our politicians are building an infrastructure bubble that will be deemed too big to fail and they’ll come to the taxpayers to bailout their mess.

Perry and the Texas legislature just gave unelected toll authorities ownership of any state or federal highway segment that it tolls in PERPETUITY (HB 1112 passed in 2011). Why would a toll authority need to “own” a road in perpetuity? Why wouldn’t it revert back to a FREEway once the toll is paid off and then operated and maintained by the highway department? Because they plan to keep the tolls in place in PERPETUITY.

Toll authorities have no other revenue stream to maintain their roads except tolls, unlike the highway department that receives gas taxes and other taxes/fees to build and maintain public roads. In October of 2009, the Alamo Regional Mobility Authority (the new way to refer to tolling authorities by leaving the word “toll” out) even admitted it will charge tolls in perpetuity when it imposes tolls on every single EXISTING freeway lane on US 281 in San Antonio.

So our hat’s off to Governor Deal who’s not only standing up for states’ rights and state sovereignty, but also smart enough to see a LOSING position on P3s and tolling in Georgia and RETREAT. Now if Texans would wise-up and require their politicians to do the same!

GA Governor calls public private partnerships "ill-conceived sell-outs"

Link to article here.

New governor/new policy in GEORGIA: P3s 'unlikely in the near future'
By Chris Glynn
Infrastructure Investor
January 12, 2012
Georgia governor Nathan Deal characterised a late 2.3 billion toll road public-private toll road as an ill-conceived sell-out in a Tuesday speech. A GDOT spokesman added that PPPs in Georgia are 'unlikely in the near future'.
A damning rebuke of ‘West by Northwest’ as a ceding of fiscal selfhood was the highlight of a Tuesday speech by Georgia governor Nathan Deal. The state’s change of direction was underlined by a government spokesman who told Infrastructure Investor that public-private partnerships (PPPs) in the Peach State look “unlikely [...] in the near future”.
Speaking in his ‘State of the State’ address, Deal said he opposed a project that would jeopardise the “sovereignty” of Georgia for a “60 or 70” year period.
“Recently, we called a halt to the PPP project for the northwest corridor,” Deal said Tuesday. “I am and will be opposed to contracting away […] sovereignty for a 60 or 70 year period over a transportation corridor that is so vital to our future.”
Deal pointed out that he remained “committed” to improving the road, but stressed “there is a better way forward”.   
The West by Northwest project, a 40-mile toll road expansion in Atlanta, Georgia, along Interstate 75 and Interstate 575, was hailed as a “historic” PPP within the Georgia Department of Transportation (GDOT).
The would-be toll road underscored a state-wide effort to install a PPP programme that came to fruition under a host of pro-privatisation legislation passed in 2009.
Now, with the termination of West by Northwest, the future of that PPP programme – which had positioned the Peach State as a possible leader in private investment in public infrastructure in the US – is in doubt.
“We just are not sure about the future of PPPs,” answered GDOT spokesman David Spear, adding the potential for a PPP programme “in the near future […] unlikely”.
Spear went on to explain no GDOT personnel have been dismissed as a result of the demise of the PPP effort. Brandon Beach, chairman of the GDOT PPP board, is an elected GDOT member, while Gerald Ross, charged with operating the effort, is the top GDOT engineer.
Spear on Tuesday told Infrastructure Investor that a change in direction, “philosophically”, was behind the derailing of West by Northwest.
Deal became governor of Georgia in 2011. His predecessor, Sonny Purdue, had installed the PPP programme in 2009. The privatisation push seemed to be thriving under the auspices of then-GDOT commissioner Vance Smith, a one-time state senator.
But Smith resigned in September on the eve of a Request for Proposals (RFP) for West by Northwest amid a wave of criticism. GDOT was labelled as understaffed and suffering from high personnel turnover.  A month later GDOT, in an email statement, announced West by Northwest had been cancelled.

Boxer's bill expands TIFIA program by nearly ten times

Link to article here.

The TIFIA loan program is a shill for private toll road investors looking for taxpayer handouts -- hogs at the trough! It's also squandered by local toll authorities and state departments of transportation to subsidize even public toll projects. It's a DOUBLE TAX to use public money to build the road then charge taxpayers AGAIN to drive on it. It's also a gross misuse of public funds to use taxpayer money to build toll roads and then put them in the hands of unelected bureaucrats at toll authorities, or even worse, private for-profit corporations.

Let's not forget the first TIFIA loan went to a private corporation who grossly overestimated the traffic forecasts on San Diego's Southbay Expressway and it went bankrupt within three years, for which the taxpayers lost nearly $80 million. For lawmakers to expand the program by nearly ten times without one ioda of accountability measures is plain malfeasance!

Barbara Boxer's Transportation Bill Would Drop Environmental Criteria In Much-Touted TIFIA Loan Program
Matt Sledge | Dec 20, 2011 8:15 PM EST
Huffington Post

NEW YORK -- A bipartisan transportation bill sponsored by Sen. Barbara Boxer would dramatically expand a federal program that finances "innovative" transportation projects. But in order to secure the expansion of the Transportation Infrastructure Finance and Innovation Act (TIFIA), Boxer had to introduce new rules that would strip away current criteria favoring environmentally sustainable projects, progressive transportation advocates say.

Boxer's transportation bill sailed through the Senate Environment and Public Works committee in an 18-0 bipartisan vote on Nov. 9. But critics say it came at a price for the TIFIA program, which would no longer give environmentally sustainable projects a leg up in the selection process.

"At a time when the nation's transportation system is starved for funds and there is a consensus that dollars need to be spent more wisely, it is outrageous that the one program that would be massively increased would no longer try to deliver the best bang for each buck," said Phineas Baxandall, a senior analyst at US PIRG, a nonprofit public interest advocacy group. TIFIA has recently been touted by both Democrats and Republicans as an example of how to prop up infrastructure financing in a time of budget deficits. About $110 million a year in federal funds is turned into $1.1 billion in federally-supported loans, which then go a third of the way toward leveraging loans from private sources.

Because TIFIA is a loan program, projects have to find some way of paying back the federal government. The revenue stream is most often a toll or other "user fee," but sometimes it's something like Los Angele's 2008 Measure R sales tax. Although TIFIA is run through the Federal Highway Administration, its loans have been used to support everything from toll roads in Texas to light rail in Denver.

The only problem: At a time when private financing is hard to come by, everybody wants in on the action. This year there were 34 requests for $14 billion in loans -- 14 times more than what the program could support. A lot of cities and states wound up empty-handed.

So when the Senate's Environment and Public Works Committee met to hammer out a deal on a new transportation bill, consensus was quickly reached on vastly expanding the size of TIFIA's annual funding from $122 million to $1 billion a year. That money could in turn support up to $10 billion in federal loans.

It was something of a breakthrough in the transportation world. For years Congress has patched together short-term extensions of the transportation bill. The EPW proposal sponsored by Boxer offers a way out -- and, she hopes, a way to finance LA Mayor Antonio Villaraigosa's dream of building 30 years of transportation projects in a decade.

But the bipartisan consensus on the transportation bill appears to have come at a price. One apparent sticking point for Senate Republicans, led by outspoken climate change denier James Inhofe (R-Okla.), the ranking member on EPW, was the 20 percent weight TIFIA puts on "the extent to which the project helps maintain or protect the environment."

That criterion, introduced by the Obama administration, gives mass transit a leg up against toll roads and highways. But it's anathema to critics like the libertarian Reason Foundation's Robert Poole, who argued that the emphasis on environmental sustainability "has apparently led to toll projects that add highway capacity getting aced out."

"Senator Boxer's working in an environment where she's got to get support from people on the other side of the aisle, and these are the types of issues she's hammering out," said Raffi Hamparian, director for federal affairs at the Los Angeles County Metropolitan Transportation Authority.

Phineas Baxandall, a senior analyst at U.S. PIRG, said he thinks Boxer may have cut a bad deal. He argues that doing away with TIFIA's selection criteria means the U.S. Department of Transportation will be forced to give money to any transportation project that meets bare-bones financial eligibility requirements. Under this rolling selection process, when the $1 billion annual federal credit support is gone, it's gone for the year.

Toll roads, backed by private investors looking to make a buck off of "public-private partnerships," will be first in line, he argued, since they have plans that are "just ready to go off the shelf."

"Those companies are going to likely get the lion's share of TIFIA funds. And those companies have a lot of power on Wall Street and make a lot of campaign donations, and just have a lot of power," he said.

Los Angeles hopes it will get some of that TIFIA money. Not so fast, Baxandall said. "Places like Atlanta and L.A. are hoping that the new bounty of TIFIA will allow them to finance public transit expansions, but they are likely to find the money already claimed by private toll road projects in places like Florida and Texas."

Others aren't so sure that mass transit and toll roads are mutually exclusive. Although the selection criterion will be gone, environmentally friendly transportation secretaries will still find ways to make sure sustainable projects head to the front of the line, they argue.

A spokesperson who is a staff member of the Senate EPW committee said, "This provision continues to enable the secretary to ensure that each project receives careful consideration. We believe that strong projects will succeed in the new program."

Roy Kienitz, who was until recently the Department of Transportation's under secretary for policy, said he thought the program's vastly expanded size might mean there will be plenty of space for all of the projects that meet the eligibility requirements.

Although TIFIA was vastly oversubscribed this year, Kienitz said, not all of the applications were truly eligible. "Of the people who are applying, I would say at least half of them fall into the criteria of either a) they just don't have a realistic idea of a project for a whole host of reasons or b) they may have realistic criteria for a project, but they just haven't done their homework."

Hamparian, of LA's Metro, is sure that his city's project, at the least, will win if TIFIA is expanded.

"We're pretty confident that we're in a good position to present our project for consideration for TIFIA loans," he said. "Our bottom line is that we've worked very closely with Senator Boxer and we're very supportive of the final product."

Boxer's bill is still far from passage. More Senate committees will take a shot at the transportation bill soon, and then the GOP-controlled House will also have its say. Some observers predict the long-awaited arrival of a new transportation bill could simply get pushed off for an additional year in favor of another short-term extension.

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