So, what is a “Public/Private Partnership” and why should I care? Public/Private Partnerships (or P3s) is where the government teams up with the private sector, and arranges corporate monopolies over PUBLIC infrastructure using the public’s money for private profits. In our State, the biggest P3s are Texas highways. Our legislature has been promising that toll roads are part of the solution to state revenue shortfalls and traffic congestion in Texas cities. They claim that with the current budget situation that the State cannot build or finance new roads without P3 financed and operated toll roads. Many republicans have bought into the lie that Texas cannot afford its own transportation infrastructure.
The facts are that in 1980, Texas spent 15.45% of the State budget on new roads and maintenance. However, in 2009, the State was only spending 4.8% of the budget on road-related work. (ref. Don Wilson, Lone Star Report, April 12, 2010). Today they spend even less. With the coming budget crisis in the 83rd State Legislature, lawmakers are jumping through hoops to avoid new taxes. In my opinion, our legislators will present to the people of Texas a false choice of a new State Income Tax or a proposed State gambling revenue solution. This will also come with an increase in proposed P3 deals.
Texas toll roads are already over $30 Billion in debt, and few, if any, are attracting enough traffic to even cover their debt service payments. This is forcing toll hikes which, in turn, further reduce traffic and therefore – revenue. Did you know that Cintra (a Spanish corporation) who operates the LBJ and I-820 highways in North Texas will have a rate of $.75/mile or $9.75 one way. That’s $19.50 a day (or almost a $100 a week), how many Texans can afford a commute this expensive? Ultimately, it comes down to the pennies a day charged by the gas tax or the dollars a day in toll fees. In addition to this nearly $5,000 a year in new taxes, Cintra’s own forecasts show that only 8% of cars will be able to take advantage of the toll lanes to get actual congestion relief. However, the irony of the whole situation can best be summed up when the NTTA vice chairman told lawmakers in Austin that except for the Dallas North Tollway, ALL Texas toll roads “aren’t working” and are unsustainable because they cannot attract enough traffic to pay for themselves.
Already, the legislature has allowed 15 Texas roads (SB 1420) to be handed over to private corporations in sweetheart deals lasting over a half century. These kinds of “deals” eliminate competitive bidding and lock in profit guarantees. What they don’t tell you is that these “private” toll roads make use of the State’s power of eminent domain to grant a toll road operator a guaranteed monopoly. They don’t tell you that P3 toll roads limit the expansion of “free” roads (otherwise known as “competing facilities”), that they can manipulate speed limits to drive more traffic to the P3 toll roads, can charge toll rates as high as 75 cents per mile, and ultimately allows private corporations the power to tax. These “sweetheart” deals also eliminates due process in contesting toll bills, puts the taxpayer on the hook for losses while the private investors are guaranteed profits, and use massive amounts of public money and debt to subsidize unprofitable toll roads that can’t pay for themselves.
However, don’t just take my word for it. Here is what others said back in 2007 about this assault on Texans property rights and taxpayer money:
- “PPPs [P3s] cost 50% more than public toll projects. Always best to keep the projects public versus private.” (Dennis Enright, PPP expert in testimony to Senate Transportation Committee, 03/01/07)
- “It’s designed to extract exorbitant toll rates,” (Senator Robert Nichols, Express-News, 03/31/07)
- “Selling highways is not politically correct in this state. I don’t care how much you get for it… When you have an agency run amok, you have to exercise the oversight authority of the Legislature,” (Rep. Warren Chisum, Austin American Statesman, 03/28/07)
- “I think we’ve created a monster in the Texas Department of Transportation…I think we are headed in a totally wrong direction,” (Senator Kevin Eltife, Statesman, 02/22/07)
- “Selling our State highways to anyone is terrible public policy, and the demands TxDOT is making is tantamount to extortion,” (Former Senator John Lindsay, Houston Chronicle, 01/06/07).
Even with these sentiments, the Legislature continues to sell-off Texas roads to foreign corporations. In fact, the story gets even worse. HB 1112 made it legal to raid the tolls on one road to pay for another (this is called “system financing”). This means tolls will never be paid off (perpetual tolls). This bill also allows the toll operator to borrow money using other borrowed money and authorizes “raiding” property taxes to finance toll systems. SB 19 legalizes the practice of “primacy” whereby the control of one toll segment gives the operator control of all future segments. And finally, our own Representative John Davis (HD-129) and Senator Mike Jackson (SD-11) pushed through SB 1048 which expands Public/Private Partnerships to every other type of public infrastructure besides roads. These two also managed to put taxpayers on the hook to secure the private corporation’s debt, raid taxpayer money from the State Infrastructure Bank, and use the government’s power of eminent domain for private gain.
I find these dealings offensive and unbecoming of Texans. If elected, I will work to craft legislation for a sensible and sustainable road policy. I will champion the following:
- I will work for legislation that will stop building roads with debt. The toll road debt and the operating costs to run the toll road bureaucracy are unacceptable, unaffordable, and unsustainable.
- I will fight to end diversions from the State Highway Trust Fund for non-road uses. Lawmakers diverted $2 Billion (up from 1.2 Billion in the last session) for uses not related to Texas roads. Less than three-quarters of the State gas tax goes to pay for transportation (25% to public schools and 5% goes to DPS and other uses [ref. HJR 84].
- I will seek to end Federal gas tax diversions. Only 60% of our federal gas taxes go to Texas roads with the other 40% going to mass transit projects. And even the money we do use for roads often has federal mandates requiring the money be spent on things like landscaping and expensive rest stops.
- I will propose legislation to fund Texas roads with the Vehicle Sales Tax. Currently, the vehicle sales tax is going into general revenue, not to roads. This existing tax brings in between $2 - $3 Billion/year. This is 2 – 3 times the equivalent of a $.10 gas tax increase. If this money was redirected back to Texas roads, it would be like doubling or tripling the gas tax without raising taxes!
- I will look for ways to stop using taxpayer money to subsidize unsustainable toll projects. This includes stopping the privatizing of public infrastructure into P3s and the conversion of existing freeways into tollways.
I realize that many in our district have never heard of public/private partnerships, but it is important that all citizens understand the actions that their Legislators take. While out of the public consciousness, P3s have a huge impact on all Texans. If I am blessed to be your Representative, I will make sure that I will be a watchdog for the people of Texas, and will always be looking out for your best interests.
