BETRAYAL: Nichols brokers deal with lobbyist to allow Trans Texas Corridor TTC-69 to proceed despite repeal of corridor
(Austin, TX – May 21, 2009) TURF obtained a memo from lobbyist Gary Bushell, with Alliance for I-69, revealing that he and ex-Transportation Commissioner turned Texas Senator, Robert Nichols, brokered a deal to allow the private toll contract with ACS of Spain for the Trans Texas Corridor TTC-69 to proceed as planned, despite the outcry of more than 28,000 Texans who went on the record against the project. (See the negotiated amendment to Nichol’s SB 17 that protects the private investor’s interest over the public interest here).
Bushell is the same lobbyist the Texas Department of Transportation (TxDOT) illegally hired using taxpayer money to lobby elected officials in the path of the TTC, which is the subject of several bills before the Texas Legislature in response to a TURF lawsuit currently awaiting a ruling by the Third District Court of Appeals.
The Texas House is set to vote Friday on whether to end the moratorium on private toll contracts and vote to re-authorize them for another 4 years. The House unanimously voted to REPEAL the Trans Texas Corridor just weeks ago in a floor amendment to the Texas Department of Transportation Sunset bill (HB 300).
“So this backroom deal-making not only betrays Texans, including those in Nichols’ own district, it’s also a betrayal of his fellow legislators who have voted to repeal and repeatedly promised the public that the Trans Texas Corridor is ‘dead,’” proclaims an outraged Terri Hall, Director of Texas TURF.
Comprehensive Development Agreements, called CDAs in Texas (also known as public private partnerships or PPPs), would hand over an untold number of our PUBLIC highways to PRIVATE, mostly foreign, corporations for a half century at a time. Senator John Carona’s bill, SB 404, is eligible to be taken up by the full House tomorrow. The Senate passed the bill in April. So if the House passes SB 404 Friday, the bill that allows the sale of our public highways to private corporations will head to the Governor's desk where it will become law.
Those promoting the Trans Texas Corridor relish in the confusion between TTC-69 and I-69. However, the two are one in the same. Transportation Commissioner Ted Houghton testified under oath in the TURF lawsuit to stop TxDOT’s illegal lobbying by Bushell that TTC-69 is I-69; they are one in the same. The private developer, ACS, confirms in a news release that this CDA is for a 621 mile corridor through East Texas that would give them the right of first refusal for more segments of the Trans Texas Corridor TTC-69 project.
“Politicians will spin this, but the documents don’t lie,” Hall contends.
“Texans don’t want their PUBLIC highway system sold to the highest bidder, nor do they want corporate-run toll roads that cost commuters 75 cents a mile to get to work,” said Hall. "The Texas Legislature has been derelict in its duty to properly fund our state highway system through the gas tax thinking raising the gas tax is political suicide. We contend selling our highways to foreign corporations is even more so!"
Private toll road contracts are due to sunset this fall. In 2007, Texans stood-up and demanded a moratorium on CDAs and sent a bill to the Governor with a combined vote of 169-5.
“Our politicians got the message in 2007 that Texans don’t want to sell our highways to the highest bidder, and yet they are about to ram through billions in multi-generational debt to benefit private foreign corporations at the expense of the taxpayers,” Hall notes.
These deals cost taxpayers 50% more, are failing all over the country, and result in extremely high tolls, like the DFW contracts just signed with Spain-based Cintra that will charge commuters 75 cents a mile to get to work. That’s $3,000 a year in new toll taxes.
In fact, just days ago, Florida’s “Alligator Alley” couldn’t get a single bidder to privatize that tollway. TURF thinks lawmakers need to wake-up to the economic realities that selling our highways to the highest bidder, and relying on rosy traffic counts that amount to pure speculation to make these multi-billion dollar boondoggles work will fall flat, leaving the taxpayers to bailout yet more corporations.
“Public infrastructure that Texans depend on for daily living shouldn’t be under the control of private companies whose primary motive, naturally, is profit, not the public interest,” states Hall.
TURF believes that especially in these economic times, the higher toll rates charged by these foreign toll operators are completely unsustainable. CDAs also eat-up our existing gas tax and other public funds to privatize and toll our public roads, taking away virtually ALL of our available funding for non-toll roads.
CDAs are the most risky and most expensive method of delivering toll projects. Testimony from Dennis Enright of Northwest Financial in New Jersey before the Senate Transportation Committee March 1, 2007, seems to have been quickly forgotten by the Legislature. Mr. Enright said there is no risk transfer to the private entity and that CDAs cost the taxpayers of a minimum of 50% more than public toll roads. Mr. Enright rightly called toll roads monopolies by their very nature. He also said it’s always best to keep these projects in the public NOT private sector.
A second bill, SB 17 authored by Nichols, is tied to Carona’s SB 404. If the House votes to re-authorize CDAs, it’s contingent upon SB 17 passing as well. SB 17 purports to protect the public from private toll contracts and make CDAs only a last resort. However, the way the current bill, SB 17, is structured, if the public toll entity cannot get the financing together to do a public toll road, they'd have to pass the project to TxDOT who would hand it to the private developer. Even worse, Nichols has amended the bill to remove all the projects involved in the Trans Texas Corridor TTC-69 corridor from many of those “protections,” and he’s agreed to protect the private operator’s financial “interest” in the project, hanging the taxpayers out to dry.
“Lobbyists are hogs at the public trough and our politicians bow to these special interests time and again. We need to hold them accountable for this highway robbery at the ballot box, or selling out the public interest for special interests will continue unabated,” Hall warned.
Hall says the bill doesn't give the public any protection, but shows TxDOT how it can just wait it out and then hand projects to the private companies. The bill also allows the whole evaluation process to be waived and TxDOT and public tolling entities can jump precipitously into CDAs.
The recent I-820 deal in Tarrant County uses a host of public money (gas taxes, federal TIFIA loans, private activity bonds or PABs) to subsidize this PRIVATE toll contract, yet Cintra gets the right to toll Texans for 50 years and take all the profits out of state. In fact, TxDOT plunked down more cash for the project than did Cintra! (Read it here.)
The LBJ freeway CDA project to toll I-635 uses public employee pension funds to invest in the deal, with toll rates of 75 cents a mile and can rise monthly. TxDOT will even pay Cintra for the loss of the "prevailing toll" revenues due to HOV users and Cintra is guaranteed 12% to 23% PROFIT! (Read more here.)
Their models show only 10 & 11% of all traffic will be able to afford to take these billion-dollar toll lanes. The congestion, or variable, tolling actually jacks-up the toll rates to guarantee certain speeds or pay TxDOT a penalty for slower travel times. This means they purposely price cars off the toll lanes as a financial incentive.
“So what's the point of all this risky, multi-generational leveraged debt? Mobility or making money? We’re headed for an infrastructure bubble that is destined to fail, which is likely to ensure massive taxpayer bailouts when they do. All those cars not on the toll road will be sitting in traffic, contributing to our air quality issues and being late to work while still paying taxes for highways (gas tax) and not getting a thing for it,” Hall observes.
TURF is urging Texans to call their State Representative and tell them not to let private corporations takeover our public highways. Tell them “NO” to SB 404 and SB 17, and “NO” to more sweetheart deals.
Read how CDAs are failing all over the world on our CDA Fact Sheet here.
Terri Hall is the Founder of Texas TURF. TURF is a non-partisan grassroots group of citizens concerned about toll road policy and the Trans Texas Corridor. TURF promotes non-toll transportation solutions.