Aussies campaign against tolls

Link to article here.

Taxpayers will always find ways to avoid the new tax, especially when their paychecks are shrinking while costs for food, energy, and basics continue to soar! Australia was one of the first countries to embrace and aggressively push public private partnerships as the answer to their transportation funding (largely at the urging of Macquarie, an Australian company and global toll road investor/operator). Now several years later, after pension scandals (they invested public pensioners in the risky deals), toll hikes, and toll roads that are in the red, the PEOPLE are rising up and boycotting these road rip-offs.

Road rip-offs: Hills resident campaigns against tolls

Local News
3 Aug 11 @ 01:30am by ROBBIE PATTERSON


FRUSTRATED commuter Ziggy Zapata is urging all city drivers to join a fight against toll ways after becoming “flabbergasted” with Sydney’s infrastructure and transport systems.

His frustration was further inflamed when the Times recently reported toll increases on the M2.

Mr Zapata started the group Citizens Against Road Rip-offs (CARR) and says he has tips to save commuters thousands of dollars annually on tolls.

“For years I have been angry about the fact that motorists pay so much money in fees, charges, fines and yet governments cannot even build decent free roads, but instead resort to colluding with private operators to construct toll roads,” he said.

Mr Zapata said taxpayer-funded roads such as Epping Road at Lane Cove were almost unusable.

He said they had been “narrowed to try to force motorists to use the Lane Cove Tunnel. And streets in the area have been made inaccessible to prevent motorists from using them as rat-runs to avoid the toll road.”

So Mr Zapata established the non-profit organisation, CARR.

The website aims to teach motorists how to “fight back against the completely unjustified gouging to which they are subjected”, he said.

“CARR is there as my personal protest against being used as a victim for bloodsucking governments and toll road operators.”

Mr Zapata urges anyone who is not happy with the current system to join.

The website contains handy tips to avoid fines and tolls.

“Using technology such as GPS receivers and a bit of common sense, every motorist can avoid being a cash cow for government and toll road operators,” he said.

Mr Zapata said the most powerful tool people had “is the power of the boycott and this is where CARR can help motorists save a lot of money.”

ZIGGY’S TIPS: HOW TO AVOID ROAD RIP-OFFS
* Buy a cheap GPS and use the no tolls option;
* Use a Bluetooth hands-free device at all times to avoid being booked on your mobile phone;
* Put power in numbers: if enough people don’t use the toll ways they will become free like they should always have been.
* For more handy hints and tips, or to join the group go to - www.carr.org.au

RMA contractor, First Southwest, guilty of bid rigging

The Alamo RMA just hired this firm, First Southwest, as one of its financial advisers at its July 2011 Board Meeting. The corruption inside RMAs (Regional Mobility Authorities, a fancy way of saying toll authority) is systemic. All of these RMAs need to go!
____________________________________
Enforcement

First Southwest In 'Tainted' JPM Deal

SEC Cites 'Fraudulent Bidding’

Thursday, July 14, 2011

By Lynn Hume
The Bond Buyer


WASHINGTON — First Southwest Co., as bidding agent for a repurchase agreement related to a $233 million bond deal in Texas for which it was financial adviser, improperly allowed JPMorgan Securities to lower its bid for the repo, reducing the issuer’s investment rate, according to documents and transaction participants.

The Securities and Exchange Commission said the deal, involving bonds issued in 2005 by the Central Texas Regional Mobility Authority, was one of many that involved “fraudulent bidding practices” that JPMorgan engaged in with the assistance of bidding agents.

The SEC described the transaction without identifying the bidding agents or issuers in the complaint. It was filed last week against JPMorgan in connection with its $51.2 million settlement of securities fraud violations for bid-rigging of muni-bond related reinvestment contracts. The complaint only noted that the bidding agent for the repo in the Texas authority’s deal was one of the FAs for the bond deal.

But the final judgment issued a few days ago by a federal judge in New Jersey — which approved the settlement and imposed a permanent injunction against JPMorgan prohibiting further violations — listed the bond issuers. Transaction participants identified First Southwest as the FA for the bond deal and the bidding agent.

Read the rest of the article here.

Mica says no tolls on existing interstates

Link to article here.

Con. Mica tried to clarify his position here, but the term "existing road" has been horribly abused by Rick Perry's highway department. They've advocated slapping tolls on  existing highway lanes and leaving frontage roads as the new non-toll lanes. So sadly, we have to question Mica's definition of 'existing' here. Also, the taxpayers already paid for the right of way in which they plan to add toll lanes, so it's a form of a DOUBLE TAX to charge us twice.

Then there's the financial viability of doing so...I have yet to see ANY managed lane project (tolls down the middle of an existing freeway where the government 'manages' traffic flow based on toll rates) that has been financially solvent. Generally speaking, the only time motorists will volunteer to pay extra taxes is when the free lanes are unbearably congested. In most cities, commute hours are about 6 hours a day (3 hours in the AM and 3 hours in the PM), so the toll lanes are empty the other 18 hours a day. Adding toll lanes to our interstates isn't going to solve our road funding problem -- it'll incur more debt that we cannot repay. What we need is Washington to stop raiding our road money for non-road uses, stop using earmarks, and stop attaching strings to our gas taxes forcing us to spend scarce road funds on landscaping and other "enhancements."

My Word by U.S. Rep. John Mica: Don't add tolls to free interstate lanes

By Congressman John Mica
Orlando Sentinel
August 02, 2011
A recent Sentinel headline stated, "Mica no longer opposed to I-4 tolls in Orlando." That headline does not explain my position on tolling.

In legislation being drafted, I support a ban on tolling existing free interstate lanes, both on Interstate 4 in Central Florida and all interstates.

My position has been and will continue to be that interstate lanes currently free of tolls will remain toll-free, now and under any future legislation.

However, to expand and build more capacity on our interstate system, I support providing states the flexibility to finance the construction of any new interstate-lane capacity using the surrounding land and right-of-way. Our existing interstate right-of-way is a valuable asset, and it must not sit idle. We can provide additional capacity paid for by the user and still keep current free lanes free of tolls.

With limited resources available, the federal government must implement responsible means of paying for new infrastructure. Attracting private capital for adding lanes can allow us to maximize our highway capacity without increasing taxes.

By better leveraging our existing revenues and adding new self-paying lanes, we can improve congestion in the free lanes. My initiative represents the first opportunity in several decades for us to significantly increase capacity on the interstate system.

A successful example can be found in South Florida. Toll lanes were added in the right-of-way on Interstate 95, while the existing free lanes remained free. Before the addition of the toll lanes, the average speed on I-95 during rush hour was less than 20 miles per hour. After the toll lanes opened, the average rush-hour speed in the free lanes dramatically improved. The new lanes have improved travel conditions for all drivers.

In an era of tight budgets and significant public debt, it is vital that we reduce spending, eliminate wasteful programs, and adopt innovative policies to build additional needed highway infrastructure.

In my work to develop a new long-term transportation bill, every effort is being made to consolidate duplicative programs, devolve project approval authority to the states, cut red tape, and streamline lengthy bureaucratic processes. We can better leverage the limited transportation dollars that are available, and bring projects to completion ahead of schedule and at lower costs.

Maximizing the use of any idle highway right-of-way or capacity potential is only one idea, and I always welcome suggestions to improve our infrastructure.

Gas tax next tea party target?

Link to article here.

TURF actually supported the bill in the Texas legislature, HB 3390 by George Lavender, to allow Texas to opt-out of the federal highway program.The federal highway program is so fraught with earmarks, strings, and abuses, the states' money is getting eaten alive by frivolous, wasteful spending that should be going to build and maintain our roads. In Texas alone, it's estimated Texans could reap $1 billion annually by returning all its taxes back to the state...without necessitating toll roads or selling off our roads to private corporations who jack-up tolls to oppressive levels.

Gas tax may be next Tea Party target

By Steve Hargreaves @CNNMoney August 4, 2011: 2:08 PM ET

Lawmakers may scrap the 18.4-cent-a-gallon federal levy when it expires next month. Can our roads really afford that?

NEW YORK (CNNMoney) -- You may want to consider investing in some good shock absorbers for your car this fall.

Fresh from blocking any new tax increases during the debt ceiling debacle, some lawmakers in Congress may now oppose renewing the federal tax on gasoline and diesel fuel, which is used to maintain our nations highways.

The federal gas tax of 18.4 cents a gallon expires at the end of September. In order to keep the gas tax, lawmakers would need to vote to extend the highway funding bill, which is what the gas tax is tied to.

There are no official efforts to scrap the tax yet but as first noted in the journal Politco, momentum appears to be moving in that direction.

A bill was recently introduced by Senate Republicans that would allow states to opt out of the federal highway program. The highway program uses $32 billion each year collected by the gas tax, plus a handful of smaller fees and some borrowing to distribute some $50 billion a year to the states for road construction, maintenance and mass transit projects.

That represents about 28% of all road and transit spending nationwide, with the rest coming from states or towns in the form of tolls, registration and user fees, state gas taxes or their general funds.

Spendthrift motorists shouldn't get too excited by the prospect of eliminating the federal gas tax, which costs the average driver around $100 a year. The states would presumably make up for the loss of federal funds by increasing their own gas tax or other driving-related fees.

But for those who support ending the federal levy, the thinking is that the states could do a better job of building and maintaining the nation's infrastructure.

First there's the bureaucracy. Why collect the money at the state level, send it to Washington, only to have it return to the states?

GM CEO calls for $1 gas tax hike

Then there's the question of federal oversight. Federal money often requires the use of union labor or comes with other stipulations.

"The Davis-Bacon law increases the cost of new roads, bridges etc. by 25% to 33%," Grover Norquist, head of the advocacy group Americans for Tax Reform, said referring to the law that stipulates how much workers on federal projects need to be paid. "Much money is siphoned off to pay union workers in subway systems or to build bike paths....not roads."

About 15% of federal funds go toward mass transit and other things not road related, according to the Transportation Department.

Norquist didn't say if he'll use his considerable influence among Republicans to attempt to kill the gas tax next month, but did say "we should move now, or soon, to allow all states to raise and keep their own gas taxes to build and fix roads."

Supporters of the tax argue federal involvement allows roads to be built and maintained to uniform standards that ensure the smooth and safe flow of travel and commerce.

Having a patchwork of roads with different weight limits, lane widths, or curvature would be a headache for truckers and possibly dangerous for everyone, said Ken Orski, publisher of the infrastructure industry publication Innovation NewsBriefs and a former transportation official in the Nixon and Ford administrations.

Even if states had to build the roads to a federal standard, Washington still acts as as a kind of equalizer when it comes to highway funding. Under the federal system, states on the coasts with large populations often end up sending money to states in the middle of the country that have thousand of miles of open roads but fewer taxpayers to help fund them.

That makes sense, said Orski, as the roads in the middle of the country take a beating by heavy trucks shipping commerce from one coast to the other.

"We are one nation, and we need a national highway system," he said.

That helps explain why some big business groups not only want to keep the federal gas tax, but want it raised.

Both the Chamber of Commerce and General Motors (GM, Fortune 500) have recently come out in favor of a higher gas tax -- the latter arguing for a dollar-a-gallon increase.

They note that the 18.4 cent-a-gallon tax hasn't been raised since 1993, and now has the inflation-adjusted buying power of just 11 cents. Plus, fuel efficiency has been rising steadily each year along with miles driven, meaning Americans are putting more miles on roads while paying less to maintain them.  To top of page

First Published: August 4, 2011: 12:29 PM ET

Toll road debt could take hit from credit downgrade


Link to article here.

Considering many toll roads are faltering financially, and considering, overall, that driving remains flat or in decline, it likely just got a lot harder for both governments and private equity players to borrow money for risky toll road schemes. There just aren't enough people with the discretionary money to pay tolls to get to work, especially when their paychecks are shrinking, their food, energy, water, and property tax bills keep going up.

U.S. Loses AAA Credit Rating as S&P Slams Debt Levels, Political Process

By John Detrixhe - Aug 6, 2011

Standard & Poor’s downgraded the U.S.’s AAA credit rating for the first time, slamming the nation’s political process and criticizing lawmakers for failing to cut spending or raise revenue enough to reduce record budget deficits.

S&P lowered the U.S. one level to AA+ while keeping the outlook at “negative” as it becomes less confident Congress will end Bush-era tax cuts or tackle entitlements. The rating may be cut to AA within two years if spending reductions are lower than agreed to, interest rates rise or “new fiscal pressures” result in higher general government debt, the New York-based firm said yesterday.

“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” S&P said in a statement late yesterday after markets closed.

Lawmakers agreed on Aug. 2 to raise the nation’s $14.3 trillion debt ceiling and put in place a plan to enforce $2.4 trillion in spending reductions over the next 10 years, less than the $4 trillion S&P had said it preferred. Even with the specter of a downgrade, demand for Treasuries surged as investors saw few alternatives amid concern global growth is slowing and Europe’s sovereign debt crisis is spreading.

U.S. Response

On a conference call today with reporters, S&P analysts David Beers and John Chambers said that in their analysis, the “extremely difficult” political discussions in Washington over how to reduce the more than $1 trillion budget deficit carried more weight in their decision than the nation’s outstanding debt. It said the talks weren’t “consistent” with a AAA rating.

The U.S. immediately lashed out at S&P after the downgrade, with a Treasury Department spokesman saying the firm’s analysis contains a $2 trillion error. The spokesman, who asked not to be identified by name, didn’t elaborate, saying the mistake speaks for itself.

Moody’s Investors Service and Fitch Ratings affirmed their AAA credit ratings on Aug. 2, the day President Barack Obama signed a bill that ended the debt-ceiling impasse that pushed the Treasury to the edge of default. Moody’s and Fitch also said that downgrades were possible if lawmakers fail to enact debt reduction measures and the economy weakens.

No ‘Surprise’

“This move should not be much of a surprise to markets, though the timing is at a point where market sentiment is fragile after the drop in stocks this week,” said Ajay Rajadhyaksha, the head of U.S. fixed-income strategy at Barclays Capital in New York. “What really matters is whether the markets are willing to ‘downgrade’ the U.S. bond market. As this week’s move showed, U.S. Treasuries remain the flight-to-quality asset of choice.”

Asian investors are likely to retain their Treasuries holdings for now, with options limited by the region’s foreign- exchange rate policies. Japan, the second-largest international investor in American government debt, sees no problem with trust in the securities, a Japanese government official said on condition of anonymity. Russia said the one-step cut “can be ignored.”

Debt ‘Addiction’

Policy makers from China to Japan to Southeast Asia are lured to Treasuries as a result of efforts to stem gains in their currencies against the dollar, which would impair export competitiveness. China has accumulated $1.16 trillion in the securities and the nation’s official Xinhua News Agency said in a commentary that the U.S. must cure its “addiction” to borrowing.

“They won’t be happy about it, but Asian central banks will just have to hold on and stick it out,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “There is pressure on them to hold on to liquid assets and there is nothing more liquid than the Treasury market. At least Treasuries have been doing well and they aren’t holding on to distressed assets.”

S&P’s action may hurt the U.S. economy over time by increasing the cost of mortgages, auto loans and other types of lending tied to the interest rates paid on Treasuries. JPMorgan Chase & Co. estimated that a downgrade would raise the nation’s borrowing costs by $100 billion a year. The U.S. spent $414 billion on interest expense in fiscal 2010, or 2.7 percent of gross domestic product, according to Treasury Department data.

Not ‘Enough’

“It’s a reflection of the fact that we haven’t done enough to get our fiscal house in the order,” Anthony Valeri, market strategist in San Diego at LPL Financial, which oversees $340 billion, said in an interview before the cut. “Sovereign credit quality is going to remain under pressure for years to come.”

The agreement between Republicans and Democrats raised the nation’s debt ceiling until 2013 and threatens automatic spending cuts to enforce the $2.4 trillion in spending reductions over the next 10 years.

Even with the accord, S&P said the U.S.’s debt may rise to 74 percent of gross domestic product by year-end, to 79 percent in 2015 and 85 percent by 2021.

S&P also changed its assumption that the 2001 and 2003 tax cuts enacted under President George W. Bush would expire by the end of 2012 “because the majority of Republicans in Congress continue to resist any measure that would raise revenues.”

American Policymaking

“More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating,” S&P said.

S&P put the U.S. government on notice on April 18 that it risked losing the AAA rating it had since 1941 unless lawmakers agreed on a plan by 2013 to reduce budget deficits and the national debt. It indicated last month that anything less than $4 trillion in cuts would jeopardize the rating.

“There was still a very narrow cross section of common ground between the parties and we don’t think that this agreement really changes that equation,” David Beers, a managing director of sovereign credit ratings at S&P said in a Bloomberg Television interview.

Capital Weightings

The treatment of Treasuries and other securities backed by the U.S. in terms of risk-based capital weightings for banks, savings associations, credit unions and bank and savings and loan companies won’t change, the Federal Reserve and bank regulators said in a statement following the downgrade.

Obama has said a rating cut may hurt the broader economy by increasing consumer borrowing costs tied to Treasury rates. An increase in Treasury yields of 50 basis points would reduce U.S. economic growth by about 0.4 percentage points, JPMorgan said in a report, citing Fed research and data.

“The minute you start downgrading away from AAA, you take small steps toward credit risk and that is something any country would like to avoid,” Mohamed El-Erian, chief executive and co- chief investment officer at Pacific Investment Management Co., said in a Bloomberg Television interview before the announcement.

Ten-year Treasury yields fell to as low as 2.33 percent in New York yesterday, the least since October. Yields for the nine sovereign borrowers that have lost their AAA ratings since 1998 rose an average of two basis points in the following week, according to JPMorgan.

Relative Yields

Treasury yields average about 0.70 percentage point less than the rest of the world’s sovereign debt markets, Bank of America Merrill Lynch indexes show. The difference has expanded from 0.15 percentage point in January.

Investors from China to the U.K. are lending money to the U.S. government for a decade at the lowest rates of the year. For many of them, there are few alternatives outside the U.S., no matter what its credit rating.

“Yields are low in the face of a downgrade because there is nowhere else for people to go if they don’t buy Treasuries because they want to be in safe dollar assets,” Carl Lantz, head of interest-rate strategy at Credit Suisse Group AG, one of 20 primary dealers that trade directly with the Fed, said before the announcement.

The committee of bond dealers and investors that advises the U.S. Treasury said the dollar’s status as the world’s reserve currency “appears to be slipping” in quarterly feedback presented to the government on Aug. 3.

Currency Reserves

The U.S. currency’s portion of global currency reserves dropped to 60.7 percent in the period ended March 31, from a peak of 72.7 percent in 2001, data from the International Monetary Fund in Washington show.

“The idea of a reserve currency is that it is built on strength, not typically that it is ‘best among poor choices’,” page 35 of the presentation made by one member of the Treasury Borrowing Advisory Committee, which includes representatives from firms ranging from Goldman Sachs Group Inc. to Pimco. “The fact that there are not currently viable alternatives to the U.S. dollar is a hollow victory and perhaps portends a deteriorating fate.”

Members of the TBAC, as the committee is known, which met Aug. 2 in Washington, also discussed the implications of a downgrade of the U.S. sovereign credit rating. “None of the members thought that a downgrade was imminent,” according to minutes of the meeting released by the Treasury.

Remaining AAAs

S&P gives 18 sovereign entities its top ranking, including Australia, Hong Kong and the Isle of Man, according to a July report. The U.K. which is estimated to have debt to GDP this year of 80 percent, 6 percentage points higher than the U.S., also has the top credit grade. In contrast with the U.S., its net public debt is forecast to decline either before or by 2015, S&P said in the statement yesterday.

New Zealand is the only country other than the U.S. that has a AA+ rating from S&P and an Aaa grade from Moody’s. Belgium has an equivalent AA+ grade from S&P, Moody’s and Fitch.

A U.S. credit-rating cut would likely raise the nation’s borrowing costs by increasing Treasury yields by 60 basis points to 70 basis points over the “medium term,” JPMorgan’s Terry Belton said on a July 26 conference call hosted by the Securities Industry and Financial Markets Association.

“That impact on Treasury rates is significant,” Belton, global head of fixed-income strategy at JPMorgan, said during the call. “That $100 billion a year is money being used for higher interest rates and that’s money being taken away from other goods and services.”

Tacoma toll bridge not meeting projections

Link to article here.

This is in keeping with the trend we're seeing across the nation, including Rick Perry's Texas. Driving is flat or falling and toll revenues aren't keeping up. Few if any toll roads are in the black or making it without taxpayer subsidies.

Dude Where Are My Cars: Tacoma Narrows Bridge

Tolls on the Tacoma Narrows bridge are falling short.
Clark Williams-Derry on July 7, 2011 at 12:51 pm
This post is 10 in the series: Dude, Where Are My Cars?

Interesting:  tolling revenues on the Tacoma Narrows Bridge are starting to seriously lag behind the official projections.


Of course, the blue bars on the chart shows toll revenues, not traffic volumes.  Unfortunately, the state hasn’t reported traffic counts in a while. And since revenues don’t always move in lock step with traffic counts (because tolling rates vary depending on vehicle size and payment method), I can only assume that traffic volumes are also falling short of projections.

Mostly, I attribute the shortfall to gas prices:  when fuel costs shot up, tolling revenues started a year-over-year decline. But the  projections themselves ought to shoulder part of the blame. The state forecast a 3.6 percent year-over-year increase in traffic volumes across the bridge in FY 2011. But statewide, traffic growth over the last decade has been just a fraction of that; and in the past year, the US Dept. of Transportation says that total traffic volumes in the state have actually slipped.

To me, this is just one more piece of evidence that the traffic models that we rely on to forecast our future transportation needs just aren’t cutting the mustard. They always seem to predict that traffic volumes are going to rise, fast, starting today—while the reality for the last decade has been a mixture of slow growth and unexpected dips.

Update 2:05: Fourth-quarter revenues could take a further hit after a glitch in the tolling system issued 26,000 questionable fines.

Sources:  WSDOT and EIA. Hat tip to Joe Cortright.

No good deed goes unpunished

No good deed goes unpunished

By Terri Hall
City Brights Blogger
San Antonio Express-News

As usual, the Express-News gets it wrong. The paper played its hand in its scathing editorial criticizing Bexar County Commissioner Tommy Adkisson’s leadership of the Metropolitan Planning Organization (MPO). The paper is sold out for toll taxes and a wholly-owned subsidiary of its Chamber of Commerce advertisers.

Adkisson has been one of very few taxpayer champions that has ardently challenged tolling existing freeways (there are 57 toll projects are in the MPO’s plans).  The editorial singles out Adkisson even though both Commissioner Kevin Wolff and State Representative Lyle Larson also advocated using Prop 12 funds on US 281 instead of converting the freeway into a tollway.

Are all of these elected officials being ‘manipulated’ by the grassroots (Texans Uniting for Reform and Freedom and its members among them) or are they doing what they were elected to do — be responsive to their constituents and do the right thing to restore non-toll funding to fix US 281 (north of Loop 1604) without tolls as they’ve been asked to do? Obviously, it’s the latter, but the Express-News chose to publish a below-the-belt hit piece on Adkisson as punishment for his good deeds.

The fact that the toll authority, the Alamo Regional Mobility Authority (ARMA), is the arbiter that decides whether or not US 281 would qualify for these non-toll Prop 12 funds doesn’t hold any sway with the editorial board. Neither does the fact that ARMA controls the timeline for the environmental process, nor does the fact that the 1604 draft environmental document is conveniently already complete (and it’s for a 36-mile project when US 281, by contrast, is only 7.8 miles and ARMA says it can’t be done in time). ARMA, out of self-interest, wants to manipulate the circumstances so there’s never any non-toll funds available when its environmental process is done.

While the Express-News blames the citizens’ lawsuit for the environmental delays, were it not for this litigation, there would be no opportunity for a non-toll fix to 281, not to mention TxDOT’s violation of the law (for which one employee was fired and another demoted) necessitated the “lengthy study.” We’d already be paying 75 cents per mile tolls to a foreign company like Cintra who’d have a monopoly on it (including the ability to prohibit expansion of free routes) for a half century!

If the RMA and MPO dropped the toll option on US 281, the environmental process could move forward at lightning speed, because the economic impacts of the tolling would no longer have to be studied. When Zachry and the special interests in this town ‘manipulate’ nearly every elected official (with Adkisson not in that category) as a matter of practice, the Express-News is showing its true colors about who ‘manipulates’ it by making personal attacks on the people trying to represent what the taxpayers deserve — to preserve their non-toll freeways and get them fixed without paying a DOUBLE TAX — tolls.

So what the Express-News calls “irresponsible” is, in reality, what’s in the public’s best interest and, notably, also a requirement in the MPO’s bylaws — when a project gets its funds yanked (the fix to US 281 was already funded with gas taxes from 2001-2008 and then the funds were spent elsewhere), it’s supposed to be the first one to have them restored when funding becomes available. Yet, the Express-News says this important public decision was a “waste of time” and “misuse of public funds“ for which there “shouldn’t have been any debate.”

Maybe the Express-News should merge with the San Antonio Business Journal, because it represents the same interests, which is certainly not the taxpayer’s.

Dunnam: We can't ignore the debt crisis right here in Texas

Link to article here.

Mr. Dunnam masterfully makes the case we've been shouting from the rooftops for many years now...that Rick Perry's borrow and spend policies are digging future generations into a unsustainable DEBT BOMB in order to pay for today's road problems. We're quickly reaching a point when all of our road money will be going to cover debt for yesterday's spending spree, leaving nothing left for future generations. Let's remember that borrowing equals spending money we don't have to pay for what we cannot afford (and in the case of government, to pay for what they refuse to make a priority with the taxes we already send them).

We can't ignore the debt crisis right here in Texas

Under Perry, the state borrowed money for roads

By JIM DUNNAM
TEXAS FIRST FOUNDATION

Houston Chronicle
August 2, 2011

With all our attention focused on the federal debt-ceiling debacle in Washington, it is easy to ignore our own state debt crisis here in Texas. Texas' debt is increasing at a rate that rivals the federal government's, yet no one seems to know it.

We have heard how our new Texas budget cuts more than $4 billion from our schools and students, but not about our ballooning state debt.

Before Rick Perry became governor, Texas was a pay-as-you-go state for roads, meaning we used current gas tax receipts to pay for new road construction. Our forefathers set up a system where transportation needs were paid for then and now, not by passing the buck to future generations. Under Gov. Perry, all that changed.

Starting in 2001, Texas started borrowing money for new road construction, pushing that cost onto future taxpayers. In just a decade, this debt has grown from zero to $11.9 billion. With interest payments, future taxpayers and our children will need 20 years and $21.1 billion to pay off that debt. There is even more about to be borrowed. In all, the Texas Department of Transportation (TxDOT) has authority to borrow $17.3 billion, with a 30-year payoff of $31.1 billion, further shifting the burden to our children.

To make matters worse, new transportation debt is being secured by general state revenue, not just the gas tax. The exact same taxes we use to pay for public education, state universities and health care are now being diverted to make bond and interest payments on this debt. Imagine what future Texans could do without being saddled with $14 billion in interest payments over the next generation. They might not have to take money out of their public schools or health care. They might even have a real tax cut some day.

This debt is as potentially crushing on the future of Texas as the federal debt is for our United States. Texas' borrowing has gotten so bad that we are now spending more annually on debt service than we are paying for new roads. According to TxDOT's latest figures, we will spend $1.72 billion on debt payments over the next two years, compared to $1.28 billion for new roads. Just like Washington, Austin is borrowing and spending away our future.

Texas should have never gotten away from the pay-as-you-go system for roads. Our tax system is inefficient and broken. Instead of fixing our broken revenue structure, changing the 20-year-old gas tax methodology, or closing tax loopholes, nearly all of our future infrastructure needs are to be funded by borrowing from the future generation of Texans.

With infrastructure needs only expected to grow, TxDOT continuing to issue bonds is unsustainable. Soon, all funds will be needed just to service the debt and pay interest, leaving nothing for future needs. In fact, bond rating agencies are already looking negatively upon toll road debt in the states, so even that favored option of Perry's will be gone.

Texas' political leadership likes to flaunt our balanced budget and admonish the federal government for its lack thereof. But those leaders are living in a giant glass house and deceiving Texans. The balance in Texas' budget is achieved largely through accounting tricks and debt, both of which shift the burden to future taxpayers. Genuine equalization between revenue and spending levels is nowhere near the truth about Texas' budget.

Today's successful Texas politicians shout, "No new taxes," then cut public education and health care for children, use accounting tricks to delay bills and advance receipts, then pat themselves on the back for balancing the budget. In the meantime, they quietly saddle future generations with billions in new debt obligations. Their borrowing means our children will pay nearly double tomorrow for what they are unwilling to pay for our needs today. Our parents did not do that to us, and we should be ashamed for betraying that legacy.

Texas needs roads, and we also need education. We have to have an honest conversation about how we can balance these needs without extreme cuts and without simply putting it all off for others to deal with.

Dunnam, a former Texas state representative, is a senior fellow at the The Texas First Foundation, a nonprofit organization dedicated to shaping the future of our state through public dialogue and policies that put what is right for Texas ahead of partisan politics.


Read more: http://www.chron.com/disp/story.mpl/editorial/outlook/7680903.html#ixzz1TzEIXe00

Let the states have their gas taxes back

Link to article here.

With Con. John Mica releasing his proposal for the next federal highway bill, this blast from the past, a bill introduced by Con. Jim DeMint, illustrates how irrelevant the federal highway program has become and how leaving it to the states could be just the tonic needed to fix much of what's broken. DeMint points out the earmarks and wasteful, useless gluttony that plagued the last federal bill. The Texas House passed Rep. George Lavender's bill, HB 3390, that would have allowed Texas to opt-out of the federal highway program for this reason, but the clock ran out and failed to pass the Senate. Texas is a donor state -- that means we "donate" some of our gas tax revenues to other states that presumably don't collect enough gas tax to build or maintain their interstates. Simply by giving Texans 100% of their federal gas taxes back would reap an estimated $1 billion/yr for our state highway needs without having to raise taxes or force Texans to pay tolls to drive on our existing roads.

April 7, 2008

DeMint Introduces Transportation Empowerment Act

Legislation Gives States Control of Highway Funding, Flexibility to Innovate; New GAO Study Concludes Federal Transportation Role Should Be Reduced

Washington, D.C.
Today, Senator Jim DeMint (R-S.C.) introduced the Transportation Empowerment Act to reform the federal highway program. The bill would devolve federal highway and mass transit projects and their funding sources to states, allowing each state to determine their own transportation priorities.

“The federal highway system is plagued by thousands of wasteful earmarks, bureaucratic red tape, and outdated funding formulas that pick winners and losers,” said Senator DeMint. “Americans are angry at Washington politicians who waste billions on frivolous pork projects while bridges crumble and critical infrastructure is ignored. It’s time to empower states to make their own transportation decisions and stop making taxpayers pay for bridges to nowhere and teapot museums in other states.”

“I join Senator DeMint in his desire to pursue a dramatic shift in how we address transportation infrastructure from the federal perspective,” said Senator Jim Inhofe (R-Oklahoma), Ranking Member of the Senate Environment and Public Works Committee. I introduced a similar bill in 2002 because, like Senator DeMint, I believe that States and local communities know better then the Federal Government what is needed for their citizens. The Federal responsibility is to provide a national transportation system that promotes interstate commerce, not to micro manage individual choices of cities and counties. Thus, during the reauthorization discussions on SAFETEA-LU, I will be supporting efforts to refocus the federal program on true national transportation needs. I welcome Senator DeMint’s contribution to the debate.”


Senator DeMint’s Transportation Empowerment Act returns control of nearly all highway programs to individual states in the form of block grants to states starting in 2010 when the current highway program expires. After a multi-year transition period, the bill reduces the federal gas tax from 18.3 cents to 3.7 cents in 2013 in order to fund only the limited number of programs that serve a clear national purpose.

In return, states could adjust their state gas tax rates and keep nearly all of the revenue they collect instead of funneling it through Washington. The legislation also proposes new ways to finance roads and gives new authority to states that allows them to partner with other states to undertake major multi-state projects.

A 2008 Government Accountability Office report requested by Senators DeMint and Inhofe found that:
“Functions that other entities can perform better than the federal government could be turned back to the state or other levels of government. Given that already substantial roles states and localities play in financing, design, construction, and operation of transportation facilities and service, there may be areas that no long call for federal involvement and funding could be reassessed.”
“The reality is that the national interstate system was completed years ago. States should be able to keep their own transportation dollars instead of sending them to Washington and only getting a portion of them back with layers of regulations and earmarks,” said Senator DeMint. “The Transportation Empowerment Act is a commonsense solution to the broken highway funding system.”

If the Transportation Empowerment Act were passed, “Donor states,” which send Washington more in gas taxes than they receive back in transportation funding, would see a dramatic increase in their rate of return because nearly all of the tax revenues would never leave the state. This bill would also empower states to pursue more innovative and efficient ways to build roads by engaging in public private partnerships.

A report published by the nonpartisan Heritage Foundation from October 2007 found that most “donor states” have been receiving a losing share of federal transportation funds since the program’s inception in 1956, even though many of these states are experiencing above-average population growth. Heritage found that the five biggest “donor states” in the current federal highway funding system (Texas, South Carolina, Minnesota, Georgia and Indiana) lost a combined total of over $1.2 billion tax dollars in Fiscal Year 2005. According to the report:
“South Carolina was one of the biggest losers in 2005 because its motorists provided the trust fund with 1.836 percent of its rev¬enues while receiving only 1.535 percent of spending in return. In effect, South Carolina received only an 83.6 percent payback on its investment share. South Carolina is also one of the biggest losers over the 50-year history of the program. Only Texas and Oklahoma have done worse since the program's inception.”
A 2007 report by the Department of Transportation Office of Inspector General requested by Senator Tom Coburn (R-Oklahoma) contains the following findings on the problems created by transportation earmarks:
• Department of Transportation (DOT) earmarks have increased in number by 1,150 percent in 10 years (1996 – 2005), with the value of earmarks in the same timeframe jumping 314 percent. • Ninety-nine percent of earmarks (7,724 out of 7,760) were not subject to the transportation agencies’ review and selection processes or bypassed the states’ normal planning and programming processes. • Earmarks may not be the most effective or efficient use of funds. The IG report identifies five ways in which earmarks impact programs in the Federal Highway Administration, the Federal Transit Administration, and the Federal Aviation Administration, as follows (see pages 11 – 14 of the full report):

o Earmarks can reduce funding for the states’ core transportation programs. o Earmarks do not always coincide with DOT strategic research goals. o Many low priority, earmarked projects are being funded over higher priority, non-earmarked projects. o Earmarks provide funds for projects that would otherwise be ineligible. o Earmarks can disrupt the agency’s ability to fund programs as designated when authorized funding amounts are exceeded by “overearmarking.”

Bankrupt San Diego tollway to receive another taxpayer bailout

Link to article here.

A little background: the taxpayers subsidized this privatized toll road (it received the first federal TIFIA loan) for which the taxpayers lost nearly $80 million when it went bankrupt. Now local taxpayers are bailing it out AGAIN by buying it back from private investors, the second such example in California (the first was SR 91 for which the taxpayers bailed that one out seven years later -- for $207 million -- at nearly twice what it cost the private, French company to build it -- $130 million). Yet governments across the globe continue to preach public private partnerships (PPPs) and road privatization as the silver bullet to all transportation funding woes (let's not forget, the politicians are the ones who got us into the woes in the first place by habitually raiding our gas taxes for non-road uses). Here's a few more articles about the South Bay Expressway (here and here), including this scathing editorial. Road privatization is an idea whose time has come to an END. PPPs are public money for private profits, period. The taxpayers can no longer afford to pick up the pieces from this grand, unsustainable experiment.

San Diego Association of Govs likely to buy South Bay Expressway

Toll Road News
Posted on Sat, 2011-07-30 00:59

 The San Diego Association of Governments (SANDAG) is buying the South Bay Expressway from the post-bankruptcy South Bay Expressway LLC for $345m, about two-thirds what it cost to build.

The SANDAG board agreed in principle to the purchase Friday but will discuss financing of the purchase at their next meeting scheduled for August 26. There have to be public hearings and a final decision by about November.

A statement today from SANDAG says: "The Board made the agreement contingent on completing due diligence and conducting a public process, during which the details of the purchase and financing options will be presented and voted upon by the Board."

SANDAG chairman Jerome Stocks is quoted as saying the privately operated pike is "good value" at $345m.

He wants to reduce tolls which presently are $3.85 by transponder and $4.00 cash for traveling the 10 miles, 16km length of the road which runs north-south across the southeast fringe of the San Diego metro area.

The South Bay Expressway (SBX) opened in November 2007 just as the economy was in sharp decline due to the burst of the housing bubble and broader financial crisis. Foreclosures were especially prevalent on either side of the SBX, construction stopped, unemployment shot up, and immigration largely ended.

An important hope in earlier years had been that burgeoning trade with Mexico would generate major truck revenues since the toll road linked to a new border crossing at Otay Mesa. There was disappointment there too.

Traffic is less than 30,000 vehicles a day, almost a half of that expected.

Macquarie which bought into the road shortly before the financial collapse put the tollroad into bankruptcy March 23 2010. It had written of any equity in the pike over a year before. After lenders had taken 'haircuts' in the Chapter 11 proceedings, the holding company South Bay Expressway LLC emerged from bankruptcy April 14 2011.

Operations have continued pretty much as normal right through the bankruptcy with toll revenues more than covering operating costs even at the worst time.

The toll concession under which the road was financed was for 35 years from opening. That means there are 31 years left, after which the road passes to California Department of Transportation.

The project goes back to a 1991 concession agreement with California Transportation Ventures (CTV), largely a Parsons Brinckerhoff company. CTV had great difficulty gaining approvals and reaching agreement with locals on the route and design of the road. After construction started there were bad relations with the builder Fluor.

Fluor sued CTV's successor SBX for hundreds of millions in claimed cost overruns.

see SANDAG statement:

http://www.sandag.org/index.asp?newsid=698&fuseaction=news.detail

SBX website:

http://www.southbayexpressway.com/

TOLLROADSnews 2011-07-29

Taxpayers bailout private toll roads

Link to article here.

We've long warned that the private toll operators "out-lawyer" our transportation agencies and write these 1,000 page public private partnership contracts in such a way as to ensure they NEVER lose money on the deal whether it's through non-compete clauses that penalize or prohibit free road expansion or through taxpayer loans and subsidies, it virtually assures taxpayer bailouts, as we're seeing around the globe.

Taxpayers' bill for toll roads

Irish Times

Mon, Aug 01, 2011

Sir, – The National Roads Authority is paying almost €500,000 a month to the private operators of the M3 motorway and the N18 Limerick Tunnel because traffic has fallen short of anticipated levels (Home News, July 20th).

We have been landed in this mess by the inclusion of assumptions that traffic will grow by 5 per cent and 6 per cent a year in road-building contracts. The Limerick tunnel contract runs until 2035, and the M3 contract continues until an astonishing 2052.

Actual traffic on the M3 is 22 per cent – almost 5,000 vehicles a day – below the level at which penalty payments must be made. And traffic using the Limerick tunnel is 26 per cent (3,500 vehicles) below the penalty fee level.

In daily terms, taxpayers are paying a bill of around €16,000 every 24 hours for car and truck journeys that don’t exist. The outlay here could retain more than 250 education and healthcare trainees.

Catherine Ketch (July 25th) is quite correct in identifying the N22 Ballyvourney motorway as another example of excess scale and overspecification in road planning. The NRA continues to assume traffic will grow and grow and grow. It clings to this mythology in an attempt to justify four-lane roads not only in West Cork but also in Monaghan between Clontribret and Moybridge (N2), between Tuam and Letterkenny (N17), between Ashbourne and Ardee (N2) and across south Wexford (N25).

The contract for the proposed 600,000-tonne Poolbeg mass-burn incinerator is tied to a similar growth-based mentality, and a penalty clause which is set to cost more than €30,000 a day, threatening to put the toll road fiasco firmly in the shade.

Such penalty clauses are based on a perplexing notion held by some who act on behalf of taxpayers: if the investor wins, he wins, but if he loses, the State will see him right because somehow the State has decided it will put taxpayers’ money behind the mirage of infinite growth.

If those who do not learn from the mistakes of history are doomed to repeat them, must the people of Ireland forever pay for them?

Yours etc,

JAMES NIX,

Macro Building,

Green St,

Dublin 7.

© 2011 The Irish Times

Austin toll system requires massive taxpayer bailout

Link to article here.

The Austin toll roads are deep in a debt spiral and require a massive taxpayer bailout -- 70% MORE than the already egregious subsidies they planned on -- and what's Transportation Commissioner Ted Houghton's answer? Sell the LOSER toll roads to private, even foreign, toll operators like Cintra. What private company in their right minds would want a toll system that is already losing money and not covering its debts? What can a private company do to "market" the road, as Houghton suggests, that would bring tens of thousands more cars per day to volunteer to extra taxes to get to work (work that's already scarce, for pay that has been in decline, while gas prices continue to rise)? NOTHING, there's never going to be enough people who have the discretionary funds to pony-up the bucks to keep these toll roads solvent.

Plus, there's not a whole lot that's proprietary about operating a toll road. Electronic tolling was supposed to be a panacea, only to create a billing nightmare (like spending 48 cents to mail a bill for a 25 cent toll) and toll collection nightmare. Lowering the toll rates may attract more traffic, but likely nowhere near enough to get these roads in the black. Plus, that's not what happens with road privatization. The private toll operators charge significantly higher toll rates like 75 cents per mile versus 10-12 cents per mile on public toll roads (because they have to make a profit, when government does not) and they steadily increase toll rates. These are government-sanctioned monopolies, not free market.

None of these projects are solvent without massive taxpayer subsidies and non-compete clauses that penalize or prohibit expansion of free roads surrounding the tollways (to guarantee congestion on free roads and manipulate more traffic onto the toll roads). Selling our public roads to private corporations is code for public money for private profits.The Central Texas Turnpike System used $500 million in public money to prop-up the roads on the front end, now we're shoveling $100 million more into it on the back end as we sink further into a  sea of red ink. Yet TxDOT still paints a rosy picture of the future promising yet more taxpayer-funded projects (the controversial $250 million subsidy to prop-up the Formula One racetrack) to benefit developers and special interests, but that serve no necessary public use. This push for tolling is a massive FAILURE, and it's time to STOP this fiscally reckless agenda and return our state highways to a freely accessible public road system. Read more about the failure of road privatization here.

Central Texas toll roads need more state subsidies than expected

By Ben Wear
AMERICAN-STATESMAN STAFF

Monday, July 18, 2011

Tolls and other revenue have fallen more than $100 million short of covering debt and operating costs of the state's three-road Central Texas Turnpike System since the highways opened about four years ago. Texas Department of Transportation subsidies almost 70 percent more than originally predicted have made up the difference.

Those subsidies, covered primarily by state gasoline taxes that otherwise would be available for other road spending, should average about $38 million a year over the next decade and total about $750 million by 2042 , according to TxDOT documents. The system's first profitable year is not estimated to occur until 2030 , with some years in the red even after that because of major road rehabilitation expenses.

Toll revenue from the three roads — Texas 130, Loop 1 and Texas 45 North — after exceeding expectations in the system's initial years, has fallen about 6 percent below projections since September, a trend that could make those future subsidies even higher. TxDOT officials, in explaining the shortfall, point to the recession and its dampening effects on both travel and development near the tollways.

Revenue for the system comes mainly from tolls, but fines and investment income on reserves also provide some revenue.
The Texas Transportation Commission has not raised the system's initial toll rates, which, at about 12 cents a mile, are less than a third of what the Central Texas Regional Mobility Authority charges drivers on the 183-A tollway in Cedar Park .

At least one member of the Texas Transportation Commission, which governs TxDOT, said it is time for the agency to consider ceasing management of toll roads, instead leasing out even existing state toll roads to the private sector.

"Any dollar that we support that system with is a dollar that is taken out of the state of Texas to build and support other roads," said Commissioner Ted Houghton of El Paso, who has served on the commission since 2003 and has long advocated such agreements with toll road companies. "We need to get out of that business. Find someone who knows how to market those roads, to operate them and collect the tolls. We do it as a sort of side business."

Aside from the Austin roads, TxDOT runs toll roads in Tyler and Laredo. Local toll authorities are in charge of about a dozen other Texas toll roads.

TxDOT staff officials downplayed any gloomy implications of the recent revenue and spending numbers, arguing that ongoing efforts to cut operating and maintenance costs as well as prospects for greater traffic on the 66-mile system will steadily improve the situation.

"Moving forward, I think that the economy is picking up, and I see development such as the Formula One track and ancillary development around the track helping that," said Mark Tomlinson , TxDOT's turnpike director.

The F1 track, expected to open next June, will be about a mile east of where Texas 130 crosses FM 812 southeast of Austin. Several large residential and mixed-use projects are also planned for the Texas 130 corridor, but they won't be complete for 10 to 20 years.

Beyond that, Tomlinson said, the 2012 opening of the southern 40 miles of Texas 130, connecting the Austin area to Interstate 10 east of San Antonio, is likely to boost traffic and revenue. A private consortium headed by a Spanish toll road company is footing the $1.2 billion bill to construct that extension under a long-term lease with TxDOT.

"The picture's going to be pretty good for the future," Tomlinson said.

The turnpike system was TxDOT's first foray in decades into the pay-to-drive world. The agency in 2002 borrowed $2.2 billion on the bond market and, with an additional $500 million of its tax funds and a like amount of local tax money, built the tollways in Austin's northern and eastern suburbs.

The first segments of the system opened around Halloween in 2006 , inaugurating the toll road era in Central Texas, and the existing segment of Texas 130, which runs from north of Georgetown to Mustang Ridge, was completed in April 2008 . Texas 45 Southeast, a fourth tollway that links Texas 130 to Interstate 35 south of Austin, opened in April 2009 .

Texas 45 Southeast was built using tax money alone, with no borrowing, and is not technically part of the tollway system.

Toll revenue from the system exceeded 2002 projections for the first three years, boosted mostly by robust traffic on Texas 45 North, which runs 13.3 miles from Northwest Austin through Round Rock to Pflugerville. But Texas 130, which skirts the metro area's east side for 49 miles , has been below projections for about half of its short life. And the 3.5-mile Loop 1 tollway that sprouts from the north end of MoPac Boulevard, after a stronger than expected start, has seen lower than predicted revenue every month since September 2008 .

Overall system toll revenue slipped below the projected $6 million a month starting in September and has mostly remained under its expected level in the months since then. Revenue for the first six months of the 2010-11 fiscal year was $32.9 million , about 4 percent higher than the comparable period the year before but 9 percent below projections.

Expenses, meanwhile, have been almost double — about $50 million a year — projections outlined in the 2002 bond prospectus. That includes about $30 million a year to collect the tolls, process billings and pursue collections from late payers.

TxDOT has been working to lower those costs, Tomlinson said. The agency, he said, has shortened hours at the customer service center alongside Loop 1, installed equipment that scans photographs of license plates used to bill customers who don't pay with cash or have an electronic toll tag, reduced mailing costs and renegotiated its contract with a collections company.

And the agency has taken bids for a new contract for toll operations to be awarded this summer. Review of those bids, Tomlinson said, indicates that lower costs are on the way there as well.

"All toll operations have a ramp-up period," Tomlinson said. "And they'll all tell you that their costs are a lot higher in the early years."

The largest ongoing cost of the system, and the most predictable, is debt payments. TxDOT last year made $63.1 million in such payments, about $44.6 million to bond holders and $18.5 million to the federal government to service $900 million borrowed under a transportation loan program. The payments match projections in the original bond prospectus.

Those annual payments will grow through the years, TxDOT documents show, reaching a daunting $489 million in 2042. By that year, when the $2.2 billion in debt is scheduled to be paid off, TxDOT (using tolls by Central Texas drivers) will have made about $7.5 billion in payments.

Revenue likewise is predicted to balloon through the years, thanks to increased traffic and toll rates scheduled to rise every 10 years or so. The first toll increase is scheduled to occur in 2016 , officials said.

Bond documents show projected revenue of more than $500 million a year about three decades from now. Drivers, who through May had paid $224 million in tolls since the roads opened, will have paid almost $10 billion by 2042, bond documents show.

The flattening revenue in recent months shouldn't be seen as a sign that those estimates are wildly off, Tomlinson said, or that tax subsidies will be significantly larger than predicted.

"I don't think anyone would tell you Central Texas is going to stop growing," he said.

Toll giant, Macquarie, poses 'systemic risk' to global banks

Link to article here.

Australia's Macquarie may face big-bank capital charge: Moody's

REUTERS - Mon Jul 25, 2011 10:29pm EDT

(This article was first published on Thomson Reuters Accelus, a leading provider of connected risk and compliance information and online solutions to the global financial services community. accelus.thomsonreuters.com)

By Nathan Lynch and Wietske Blees

SYDNEY, July 26 (Thomson Reuters Accelus) - Macquarie Group could be included as one of 28 systemically important global banks that will have to hold additional capital of between 1 and 1.5 per cent when the so-called "G-SIB" rules take effect, a leading rating agency has warned.

A report issued by Moody's on Monday listed Macquarie bank in 21st place in a list of global banks that would pose the greatest systemic risk in the event of a collapse.

The report said Macquarie had been given a score of 11 on a global scale of interconnectedness, complexity and size. The list was topped by Deutsche Bank (DBKGn.DE) with a score of 23.3.

In terms of its level of systemic risk, Macquarie was grouped together with banks such as Unicredit , Royal Bank of Canada , Mizuho Financial and Santander .

Moody's said it had selected a sample of 28 banks based on the size of their capital markets activities, given that the Basel Committee's methodology places a significant weight on intra-financial activities.

The Moody's analysis ranked the 28 banks on three main metrics: reliance on wholesale funding, which indicates interconnectedness; the holdings of illiquid level 3 financial intermediary trading assets (as a portion of total assets), which indicates complexity; and overall size, based on total assets as a portion of the combined total assets in the sample.

"The Basel Committee proposes similar metrics that capture wholesale funding, level 3 assets and size. The three metrics discussed here are only a subset of the metrics we use," Moody's said.

"Further, differences in balance sheets and accounting limit the comparability of banks. Despite these limitations, high scores on each of the three metrics indicate a bank's systemic importance."

Last week, the Basel Committee on Banking Supervision published a proposed methodology to identify global systemically important banks (G-SIBs), which will be subject to the additional capital surcharge.

According to the proposals, G-SIBs have five common qualities: size, interconnectedness, lack of substitutability, global cross-jurisdictional activity and complexity. The Basel Committee said it had identified 28 banks that would qualify as G-SIBs, but it stopped short of naming them.

Moody's, which used the Basel Committee criteria in an attempt to identify the banks in question, said Macquarie had scored highly in terms of its reliance on wholesale funding and complexity but was the smallest bank in the list.

Australia's four major banks were not included in the comparison exercise as Moody's does not believe them to pose a significant systemic risk.

(Additional reporting by Huw Jones of Reuters News in LONDON)

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

(This article was first published by the Compliance Complete service of Thomson Reuters Accelus. Compliance Complete (here) provides a single source for regulatory news, analysis, rules and developments, with global coverage of more than 230 regulators and exchanges.)

SCOUNDRELS: MPO fails to give 281 Prop 12 money

You can thank pro-toll Councilman Ray Lopez (who lives nowhere near 281 and argued I-35 is “more important”) as well as Commissioner Kevin Wolff (who represents the 281 corridor) for urging the Metropolitan Planning Organization (MPO) Board to sandbag taxpayers and rush a vote on what project would get the coveted Prop 12 money AFTER the MPO Executive Director assured everyone at its workshop last Thursday that a final vote would NOT take place at yesterday’s MPO board meeting.

Lopez’ office told me Friday that the Councilman agreed 281 should be the first project to get the funds in keeping with the MPO bylaws that require a project that had funding bumped be the first project to get funding restored. He also agreed more time was warranted to study the options.

Yet yesterday, he did a complete 180. As did Wolff who also assured me Friday that he was working to get Prop 12 funding allocated to 281. He was relieved he didn’t have to vote on this Monday in order to take more time to thoroughly study the options, knowing TxDOT and the toll authority would obfuscate. Yet he actually gave the board permission to take the vote yesterday, when the public was told otherwise and had little chance to weigh-in, when he said: “I’m okay with voting on this now. I guess we just don’t have a choice.” What happened to studying options outside what the toll authority wants you to believe?

They took this monumental vote on a day when three vacancies had not been filled — one for a state representative and two for city council members (that were supposed to be appointed by Mayor Julian Castro, Castro also controls 2 city staff votes on the Board). Neither Sen. Jeff Wentworth nor Councilwoman Jennifer Ramos were present either. That’s 5 seats that were either absent or vacant, leaving the citizens of this region without full representation on such a critical vote. Perfect time for TxDOT and the toll authority to pounce.



The bureaucrats naturally framed all arguments in such a way as to appear the MPO had no choice but to rubber stamp what the toll authority wants — which is to ensure no money can be made available to fix 281 without tolls so it can impose tolls on an existing freeway later. It’s our elected officials’ duty to protect taxpayers from such DOUBLE TAXATION and targeted tax grabs and to see through the smoke and mirrors — not hide behind it.

It’s no surprise, both Wolff and Lopez previously voted to toll in October 2009. Wolff has repeatedly promised to get 281 fixed without tolls as soon as money was available and called for an independent study of non-toll options (outside the biased toll authority’s study of options). Neither have come to fruition. Wolff faces re-election next year. One would think that would give him a mega-incentive to fix this gaping wound with commuters on the northside posthaste. Talk is cheap when they’ve experienced a trail of deception and broken promises for 10 years waiting to get their road fixed.

Guess we can throw out all those rankings on the 100 Most Congested Roads List that’s supposedly determined by ‘scientific’ measurements at the Texas Transportation Institute, that ranked 281 higher than I-35 in congestion levels — hmm, ya think it’s maybe cuz there are stoplights in the middle of the highway? This list is only useful to politicians when it gives them ammo for what they want to do, only to later readily kick it to the curb when it suits them, as was the case yesterday.

While you were at work (the MPO meets in the middle of the workday at 1:30 PM), they decided they know what’s best for you…gridlock on 281 and a free pass for I-35, despite not one citizen asking for I-35 to be funded ahead of 281. The Regional Mobility Authority (RMA) and TxDOT have been lobbying your elected officials and city and county staff to use the only new transportation money released by the legislature for the next two years to go to a lower priority project — I-35.

The taxpayers on the other hand, along with Rep. Lyle Larson, asked the MPO to restore the funding for 281 by using the Prop 12 money where the congestion is far worse. TxDOT added an overpass at Vance Jackson & 1604 to the Prop 12 list, when that project isn’t even on the Top 100 Most Congested Roads list, and neither were several segments of I-35.

How the dirty deed was done
First, TxDOT and the RMA said the environmental study on 281 would not be completed in time to use the Prop 12 money (by a lousy three months…convenient, the toll authority controls the timeline for its own self interest, to line its pockets with our money — c’mon, who believes this garbage?). The 1604 study and the 281 study started at the same time, and the 1604 draft document (for a 36 mile project) is already complete and on TxDOT’s desk, yet the 281 study (for an 8 mile project) is supposed to take an extra year to complete. Yeah right, they blamed the extra time on “studying” a non-toll option that was later yanked. The RMA could expedite the study if the MPO dropped the toll element since the study of the economic impacts would be moot. They want every opportunity to fund 281 without tolls to be off the table so that when they release their study, they can say claim there’s no money to fix it without tolls.

Second, they argued $50 million isn’t enough to fund the whole 8 mile project, so the mentality was, why try? Because the taxpayers of this region deserve to have the non-toll funding for 281 restored. Estimates have jumped around from $100 million as a non-toll project to upwards of $500 million as a toll project.

The first 3 miles were already funded in 2003 and that phased-in approach was okay BEFORE toll roads became Rick Perry’s flavor of the month, but it’s suddenly unworkable AFTER it was determined a toll road slush fund could be tapped from congestion weary commuters along 281. The majority of the problem on 281 is the first 3 miles outside Loop 1604 and $50 million would just about fix it (based on previous MPO allocations).

Every road project in history is done in phases. So these claims are excuses, not legitimate reasons for failing to follow its bylaws and restore funding to 281! The MPO bylaws require that a project that had funds yanked should be the first one back in the pipeline when funds become available.

TxDOT District Engineer Mario Medina lowered this boom in trying to convince the Board to steer money away from 281: “A $400 million dollar bag of money could appear today and we still wouldn’t be able to use it on 281.”

What nonsense! No project even begins to move forward unless funding has already been identified. In the case of 281, it’s presently identified to be partially toll financing and the remaining funds are other taxpayer subsidies. What the citizens are asking is that 281 be returned to a non-toll project using Prop 12 as the placeholder, along with other existing non-toll funds.

Once a pot of money can be allocated, it sits on the books until the project’s environmental clearance and engineering is completed. Every road project in the MPO’s plan has money “sitting” there awaiting its clearance.

To say otherwise is to purposely mislead and play upon the ignorance of the MPO Board members who have no earthly idea how these projects get approved and funded. They ask the bureaucrats at TxDOT and the RMA why it can’t be done, and the bureaucrats tell the Board only what they want them to know, always framing every issue as though there’s only ONE solution and only ONE scenario that will EVER work, and that’s toll roads. Then the Board repeatedly rubber stamps the bureaucrats’ pre-determined deal brokered in back rooms by those who don’t answer to the taxpayers.

MPO Chairman Commissioner Tommy Adkisson and Leon Valley Mayor Chris Riley were the only members to really challenge the bureaucrats planned talking points, while Wolff played helpless. Riley went through our concerns one-by-one and TxDOT’s answers always steered the Board to direct money away from 281.

Though public testimony offered several scenarios to restore funding based on research of MPO and TxDOT documents and past precedents, Lopez said he hadn’t heard anything that would make 281 qualify for the Prop 12 funds and called the $50 million a ‘non-starter,’ as if the testimony, the phased-in approach previously adopted by the MPO, and the RMA’s claim to be studying a non-toll option using a phased-in approach hadn’t even occurred or weren’t valid options. With that attitude, the 281 superstreet would never have happened, nor the 1604 superstreet in his own district.

Frustrated with the run around, Riley asked Chairman Adkisson to place the 281 debacle up for discussion during a retreat when all the issues can be debated out in the open (“out in the open” is what the special interest . Adkisson answered, “Of course.” Pro-toll Commissioner Chico Rodriguez quipped, “We could hold several retreats before 281 will ever be ready to go.”

It’s by design, Mr. Rodriguez, by an animal the Commissioners Court unleashed and refuses to tame (albeit Rodriguez was the lone ‘no’ vote initially against forming an RMA, but has since committed himself to voting to toll the northside in exchange for projects in his district). So the voters need to tame our politicians who are ineffective and refuse to fix the festering congestion problems plaguing our city without raising taxes by imposing tolls on our existing roads.

KSAT TV covers 281 Prop 12 story

Link to story here.

The expected objections from MPO & TxDOT bureaucrats have ensued since the grassroots have renewed their call to restore funding to fix 281 (using Prop 12 money) and keep it a freeway, rather than toll our existing road. Just as the MPO changed Wurzbach Pkwy from a toll project back to a free road project (when some stimulus money became available) and cobbled together several pots of money to get it done, the MPO can do the same on 281. To say otherwise is disingenuous. US 281 had gas tax funding to put in overpasses and expand the highway until the MPO decided (July 2004) to turn it into a toll project to make some money to build other area roads (particularly 1604) in a targeted tax. Watch the news coverage here. For more info on the history of the project cost escalation when 281 became a toll road, go to www.281overpassesnow.com.

SA, MPO Get Road Construction Windfall

MPO Set To Receive $54 Million.

David Sears, KSAT 12 News Reporter
POSTED: Thursday, July 21, 2011

SAN ANTONIO -- The San Antonio Metropolitan Planning Organization is receiving $54 million from the state for roadway and bridge construction, part of $3 billion the legislature authorized of the remaining $5 billion from a referendum passed by voters in 2007.The local Texas Department of Transportation has been allocated $90 million. With the new influx of funds, advocates for Highway 281 are ready to finally finish off the project and keep it toll-free.

"The opportunity is here. ... It's way past due to get 281 fixed," said Terri Hall, the founder of anti-toll group Texans Uniting for Reform and Freedom.

"I think we are morally obligated to address the great raging need in this county and it is 281, north of 1604, "said Tommy Adkisson, county commissioner and chairman of the MPO board.

Board Director Sid Martinez said the money sent to San Antonio would not be enough to cover the cost.

"Unfortunately, the cost is in the $400 million range. This funding is not enough for the project at this time.

"Hall disagrees with the cost estimate."I think the cost estimates have been monkeyed around with, just like our gas tax money," Hall said. She said it was closer to the $200 million to $250 million range and like other road projects, more money could be found."Like rehabilitation and safety money and other areas where they can pull together a lot more money," said Hall.

Adkisson said it would at least be a start.The money has to be spent by 2013; most of it by 2012. The 281 project is currently in the middle of a five-year environmental study but Hall said that it could be completed in the next year.If the MPO board decides to use the $54 million for other projects, one on the top of the list could be Interstate 35.

"Adding auxiliary lanes (which) ease traffic in and out of 35 through exit ramps," Martinez said.

Pegging gas tax to inflation spells trouble for taxpayers

Link to article here.

There has been much discussion through the years about raising the gas tax and indexing it to inflation to pay for roads. We've seen interest only from transportation leaders, but there has been no commitment by these same leaders to end the reliance on tolling along with it. We've said all along, end the diversions of the gas tax to non-road purposes and put the lid on tolling first before there's ANY discussion about raising the gas tax. Indexing would mean automatic tax increases without limit using an index highly manipulated by the government (who benefits from the automatic tax increase). If fiscal discipline as it pertains to our current road taxes (gas taxes and vehicle sales taxes, too, which get dumped into general revenue and don't go to roads either) were restored, a fixed gas tax increase should be considered, not one pegged to inflation. But methinks if fiscal discipline were instituted, we wouldn't need to raise taxes to get our roads fixed since the vehicle sales tax represents $2-3 BILLION/yr, state gas tax diversions represent a billion a year, and billions more at the federal level.

Intellectual Dishonesty in Washington

Posted: Sunday, July 17th, 2011 at 10:20 am
By: Ken Bennight, San Antonio Tea Party

The United States is running up debt to previously unimaginable levels, and that debt is rapidly becoming impossible to repay. A technique countries have historically used to deal with excessive debt is to inflate the currency, thus making the debt cheaper to repay. Of course that works only so long as your creditors let you denominate your debt in a currency you control. How long before our external debt will have to be denominated in Chinese Renminbis, Saudi Riyals, or some other currency?

But the United States faces a more immediate problem in using inflation to mitigate the debt. Many U.S. obligations are indexed so that the obligations increase as inflation increases. Fortunately for Washington and unfortunately for America, that is a minor inconvenience. Just as the U.S. government controls inflation, it also controls the measure of inflation, the consumer price index. Washington can reduce increases in inflation-indexed obligations by manipulating how the consumer price index is calculated.

That’s already been done to some extent. If we still measured inflation as we did in 1980, the present inflation rate reported by the Bureau of Labor Statistics would be much higher than it is. According to a recent report by Dow Jones Newswire, Congress is considering again manipulating the calculation of the consumer price index to further reduce the reported inflation rate. Reducing the reported inflation rate, of course, has no effect on the actual inflation rate.

In pushing this proposal, Congressman piously speak of getting a more accurate picture of inflation’s true effect. But given that reducing the reported rate makes Congressmen’s lives easier, it’s hard to believe there’s no self interest involved. Are any of us, Captain Renault-like, shocked!, shocked! to discover that even the computation of the consumer price index is corrupted by politics?

Tollways to lack word 'toll' in their name

Link to article here.

These Regional Mobility Authorities are TOLL authorities, yet they lack the name in their titles, on purpose. Now their tollways lack the word as well in yet another deceptive way of getting more people to pay the CTRMA's toll taxes (likely only temporarily until motorists get their first bill with hundreds of dollars in fees and fines tacked onto it -- the norm with toll agencies in Texas).

A tollway by any other name

Ben Wear: Getting There

 
Austin American Statesman

Updated: 8:15 p.m. Sunday, July 3, 2011

Published: 7:33 p.m. Sunday, July 3, 2011

The big transportation news of the day is that you won't be tempted to get caught in a downtown traffic jam for fireworks tonight. No fireworks, no jam.

But in honor of the day, a couple of transportation tidbits:

Austin, unlike some cities, has never been much for slapping names on its highways. We tend to stick with the numerical designations that God and TxDOT gave the roads in the first place. But your Central Texas Regional Mobility Authority (note that the word "toll" does not appear in its name) is trying to change that.

Already, it has begun to call its under-construction toll road on U.S. 290 East the "Manor Expressway." Not tollway, expressway. We'll see how that catches on when the turnpike's first section opens in a couple of years. Sometime back, the authority also began to refer to its planned expansion of U.S. 183 in East Austin (which will have tolls on the main lanes) as the "Bergstrom Expressway."

The trend is expanding.

There is now, in concept, an "Oak Hill Expressway," meaning the short section where U.S. 290 West and Texas 71 meet that in a few years might be a tollway. The agency board voted last week to pay a consultant about $750,000 to manage that coming project. The board also approved $2 million for similar work, referred to as the "Manchaca Expressway," which you might know as Texas 45 Southwest. Which will also be a toll road.

As of now, the only Austin highway with a commonly used nickname is MoPac Boulevard (Loop 1), which is named after a defunct railroad company. Using that as a guide, perhaps Texas 71 East to Smithville and La Grange should become the Chicken Ranch Expressway.

Cintra does damage control upon fears of default


Link to article here.

July 21, 2011

Cintra responds in more detail about the financial shape of the Indiana Toll Road, North Tarrant Express, LBJ Express and other highway/toll projects

By Gordon Dickson
Ft. Worth Star Telegram

 In recent weeks, I spent some time researching and reporting on a story that ran in Sunday's Star-Telegram about the developer of the North Tarrant Express project encountering revenue problems on a similar toll project in Indiana. During that time, I repeatedly sought comment from the developer, and ultimately I got a response, although it was a rather brief email.

This afternoon, the developer, Cintra, posted additional thoughts on the topic in a news release, which I also received by email. The release includes quite a bit of new information about Cintra's financing of the projects, and its comfort level with their soundness. Since it's too late to get these thoughts into my story, I thought I'd at least post the press release here, so that readers will have access to the supplemental information.

This press release is from the Cintra U.S. headquarters in Austin. Cintra is a Spanish company  but now has significant operations in the United States.

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Cintra spokesperson sings sunshine to Seguin about its privatized SH 130


Link to article here.

Cintra-Zachry spokesperson, Victoria Miller, is already misleading the public. She said TxDOT sets the toll rate when that's not true. Cintra sets the toll rate based on an approved formula that can be highly manipulated based on what Cintra says its operating costs are. Then Miller tried to act concerned appearing to agree that I-10 needs to be widened, when a non-compete agreement signed by TxDOT restricts and can even prohibit the expansion of free roads surrounding Cintra's tollway. "Competing" free roads threaten Cintra's guaranteed profits. This is what Rick Perry has wrought upon the state of Texas....foreign-owned toll roads where the private investors are granted government-sanctioned monopolies over our public roads.

A savvy member of the audience brought out one of the key issues surrounding the SH 130 tollway boondoggle: why would trucks want to incur the cost of paying expensive tolls to take a road around Austin that's a much longer route? Her answer makes no sense. Current traffic patterns on the first four segments and basic economics tell us truckers WILL NOT take SH 130, despite TxDOT lowering the truck toll rate to try and incentivize truckers to take its failing toll road that's running with red ink. When the Cintra segments 5 & 6 open, we can expect the same.


Official answers questions about SH 130
By Bob Thaxton
Seguin Gazette
July 7, 2011

SEGUIN — A wide variety of questions about State Highway 130 were answered Wednesday during the monthly membership meeting and luncheon hosted by the Seguin Area Chamber of Commerce at the Seguin-Guadalupe County Coliseum.

Guest speaker for the luncheon was Victoria Miller, director of corporate affairs and public information coordinator for the SH 130 Concession Company.

A joint venture of Cintra, a multinational company based in Spain and Zachry American Infrastructure, headquartered in San Antonio, the SH 130 Concession Company is building segments 5 and 6, the southernmost sections of the 90-mile toll highway running from Interstate 35 near Georgetown to Interstate 10 east of Seguin.

“We’re hoping that the road will be done by the end of 2012,” Miller said.

After delivering a brief description of the project, she opened the proceedings to questions from the audience.


Several questions concerned the cost of traveling on the toll highway.
“We don’t set the tolls; TxDOT does,” Miller said.

The TxDOT (Texas Department of Transportation) website includes a calculator that will compute the toll for a trip along the highway which now has been completed from Georgetown to Lockhart.

The cost to travel from Georgetown to Lockhart totals $5.40 for a vehicle bearing a TxTAG and $7.20 without the tag.

Miller had noted earlier that vehicles without TxTAGs are sent bills by mail which include a processing fee in addition to the toll. Obtaining a TxTAG involves making a deposit into an account from which tolls are deducted electronically, and there are no processing fees.

There are no toll plazas or booths for collection of coins and currency along SH 130.

Asked why a trucker would want to incur the extra expense of tolls on a highway that involves a longer route, Miller said paying tolls will be less expensive than the cost of sitting in congested traffic on Interstate 35.

“There’s no good reason to keep the trucks on I-35,” Miller said. “The trucks, the weight that they have, they’re tearing up the road.” She added that the accident rate for trucks on I-35 is “staggering.”

“When a truck has a wreck with a car, the car doesn’t win,” Miller said.

Another questioner asked about traffic congestion on Interstate 10 after SH 130 has been completed.

“I-10 does need to be widened,” Miller said. “We are concerned about it.”

The SH 130 Concession Company has a 50-year contract for financing, design, construction, operation and maintenance of the highway. Miller pointed out that tolls will be reinvested in the maintenance of SH 130.

“Maintaining it is important,” Miller said. “We didn’t do a very good job of explaining to the public how much it costs to maintain a road.”

Voters want toll revenues to fund roads only

Link to article here.

What a concept -- holding politicians to the Constitution! The Texas Constitution also prohibits gas taxes form being used for non-road purposes, but our Texas lawmakers have raided that fund for decades with impunity. This is yet another reason why Texans need initiative referendum. The politicos will NEVER volunteer to fix this problem, the voters need to do it themselves to get any sensible transportation policy. Also another concept that needs to be mandated, taking the toll off the road when its paid for! Article I Section 26 of the Texas Constitution prohibits perpetuities, but this, too, has not been enforced in Texas.

Washington: Initiative Measure Targets Toll Roads
Referendum in Washington state would prohibit diversion of tolls to non-road purposes.
The Newspaper.com

Tim EymanVoters in Washington state will decide in November whether to slow down the state's push toward tolling. Initiative 1125 prohibits lawmakers from diverting toll road revenue and other levies on motorists toward non-transportation purposes. It also forces politicians to vote directly on any toll hikes.

"If there's going to be tolls, there has to be accountability and transparency," initiative co-sponsor Tim Eyman of Voters Want More Choices wrote in an email. "It's simply not too much to ask for taxpayers who are being forced to pay twice for their roadway infrastructure (the highest gas tax in the nation and tolls) that the legislature be required to follow the law and abide by the Constitution."

The 18th Amendment to the state Constitution requires all gas tax and other highway fees to be "used exclusively for highway purposes." State officials are currently planning to divert the revenue from tolling Interstate 90 to underwrite the Highway 520 bridge project.

"When tolls lose their connection to the project they're paying for, they stop being tolls and they become just another tax," Eyman said.

Voters have already endorsed limitations on the use of toll revenue. Last year, 64 percent approved Initiative 1053, which required elected legislators to take a recorded vote before raising taxes and fees. The state legislature, however, decided to undermine the vote by punting responsibility for the hikes to an unelected transportation commission.

"Special interest groups and politicians don't want an open debate on this," Eyman explained. "They prefer cutting backroom deals and keeping the voters in the dark about what they're doing. With I-1125, the public will learn about what's going on and get the chance to weigh in in a meaningful way."

Under the proposal, no revenue in the motor vehicle fund or toll fund could be used for non-transportation purposes. Road lanes paid for with tolls or gas taxes could not be taken away from motorists and used for bicycle lanes or mass transit. Tolls on a given road may only fund improvements to that road, and the tolls must end once the cost of construction is paid in full.

A total of 327,043 voters signed a petition turned in earlier this month to qualify the measure for the ballot. The text of I-1125 is available in a PDF file at the source link below.

Source: Initiative Measure Number 1125 (Washington State Voters, 1/20/2011)

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