Texas for Sale?
Litany of bills would sell-off Texas to the highest bidder,
Granddaddy of them all up for vote Monday
(Austin, TX - May 23, 2011) - A steady stream of bills to sell-off Texas infrastructure to private corporations have flooded the pipeline during the 82nd Session of the Texas Legislature with a key bill, SB 1048, up for a vote in the Texas House on Monday that would privatize virtually every kind of public infrastructure (except roads) and charge user fees or lease payments for the public to access its own buildings: schools, hospitals, nursing homes, water supply facilities, ports, mass transit, libraries, even telecommunications and pipelines.
Chair of the House Transportation Committee Larry Phillips authored the most sweeping public private partnership (PPP) bill pertaining to roads (HB 3789 that never even got a hearing in Committee when the grassroots got wind of it), with Rep. Bill Callegari (HB 2729 passed both chambers) and Rep. John Davis carrying bills (HB 2432 the companion to Sen. Mike Jackson's SB 1048) for other types of civil works projects. In total, more than 30 bills to privatize Texas infrastructure were filed this session.
"Apparently Texas is for sale, and this bill would be Katie-Bar-the-Door on selling off virtually everything not nailed down," commented Terri Hall, Founder/Director of Texans Uniting for Reform and Freedom, "The priorities of this legislature are crystal clear. It's not ending diversions of road taxes to non-road uses. It's not cleaning up the highway department. It's not getting all of Texans' gas taxes back to Texas (HB 3390 has effectively died in the Senate Transportation Committee). It's not reining in the $31 billion in road debt (the House caved in conference committee adding $3 billion more in Prop 12 debt to the budget). It's selling off Texas to the highest bidder, which is the MOST expensive, anti-taxpayer method of funding infrastructure."
TURF along with over 100 grassroots groups just delivered an Open Letter (note: this version of letter includes only the list of groups, not individuals, due to file size) with 2,000 signatures (collected in just one week) to Governor RIck Perry and every single legislator putting them on notice about PPPs, yet it seems the GOP-dominated legislature is ignoring the public opposition. The bill was written by British infrastructure firm, Balfour Beatty, which doesn't sit well with a plurality of Texans who don't like the idea of foreign ownership of our public infrastructure. Unlike the 52 year cap on road PPPs, SB 1048 gives no limit on the length of time a PPP can last (one example given in Austin was for 100 YEARS) or whether such broad authority expires.
Two anti-taxpayer provisions in SB 1048 are the fact taxpayers secure the private entity's debt (2267.061 (f)) and it authorizes public subsidies for private profits by raiding taxpayers' money through loans from the State Infrastructure Bank, which is currently NOT authorized in law (Sec. 2267.060 (2)). The House already voted for Rep. Lois Kolkhorst's amendment to the TxDOT Sunset Bill, SB 1420, to ensure the Phillips' Amendment regarding the State Infrastructure Bank could not lend taxpayer money to private entities. Will the House insist on the same protection in SB 1048?
Eminent domain for private gain
PPPs represent eminent domain for private gain, which is what caused much of the backlash to the Trans Texas Corridor, where PPPs were the financing mechanism that grants these private entities the control of not just the facility, but the right of way/surrounding property where they make a killing on concessions. SB 1048, in Sec. 2267.001 (10) (a), grants the private entity rights to apurtenance, which the legal definition given by Merriam-Webster's Dictionary of Law is “property (as an outbuilding or fixture) or a property right (as a right of way) that is incidental to a principal property and that passes with the principal property upon sale or transfer.”
In Sec. 2267.002, SB 1048 also uses “public purpose” (which could mean a shopping mall) as opposed to the stricter “public use” (to ensure the taking through eminent domain is for a legitimate public necessity). Texans hold private property rights sacred, and these bills will throw gasoline on the Trans Texas Corridor fire that lawmakers are attempting to convince constituents has been extinguished. Kolkhorst's TTC repeal bill, HB 1201, has passed both chambers.
New authority granted
The bill analysis for SB 1048 specifically says it GRANTS AUTHORITY to local units of government to enter into PPPs. The bill's supporters claim cities and counties are already entering into PPPs (which they apparently lack the legal authority to do) so they believe the Legislature needs to give guidelines or try to impose some limitations on them because right now, it's sky's the limit.
"The Legislature should be banning PPPs altogether not granting authority to enter into them and make the 'guidelines' permissive. So we're basically granting them a blank check," contends Hall.
Sweetheart deals, government-sanctioned monopolies
The bill requires entities to use a design build method of procurement which eliminates low bid competitive bidding and replaces it with "best value" bidding, rife with abuses and favoritism.
Michelle Malkin has called PPPs corporate welfare. Fannie Mae and Freddie Mac were PPPs, which required massive taxpayer bailouts.
"We're not willing to bet this crap shoot will favor the public interest. PPPs socialize the losses and privatize the profits. They're horrible public policy and are sweetheart deals that grant government-sanctioned monopolies with guaranteed profits to the well-connected," argues Hall.
Public interest not protected, kept secret
Under the trade secrets and financial records exception in SB 1048 (Section 2267.067 (1)(B)(c) & (g)), these contracts can be negotiated in SECRET, without financial disclosures (like financing, the structure of the ‘user fees’ or lease payments, viability studies, public subsidies, or whether or not it contains non-compete clauses or other gotcha provisions).
The only oversight is by the Comptroller and only periodically, not EVERY contract and not prior to signing it. The Partnership Advisory Commission is NOT required to review the contracts included as riders in the budget (nor would it have veto power if it’s determined that the contract is not in the public interest), and it simply exists to advise the governmental entities outside the public purview.
Sec. 2267.057 allows a private entity “to collect lease payments, impose user fees." This means a private entity will have the power to levy a tax.
"The public cannot pressure nor hold accountable a private corporation if the 'fee' or 'tax' is too high. A private entity ought NEVER to have the power to tax our citizens! It’s the marriage of the corporation with the state and grants monopolies to private entities for a private benefit," noted Hall, "PPPs violate the public trust and the fiduciary duty of lawmakers to Texas taxpayers. It’s piracy of the public’s assets."
Texas TURF is a non-partisan, grassroots, all-volunteer group defending Texans’ concerns with toll road policy, Trans Texas Corridor-style projects like public private partnerships, and eminent domain abuses. TURF promotes non-toll transportation solutions.