Commentary: Toll road deals merit scrutiny

04/22/2007

Terri Hall

Wonder why there is all the fuss over toll roads? Well, we're not talking about traditional toll projects.

Gov. Rick Perry and his Transportation Commission are pushing private toll road deals that limit free routes and allow the private operator to charge high tolls.

As ex-Transportation Commissioner Sen. Robert Nichols, a stickler for details and the author of a bill to halt comprehensive development agreements, or CDAs, has noted, the devil is in the details.

These private toll contracts include noncompete agreements like Cintra's. There will be no improvements made to existing roads or new free routes built within a certain radius of the toll road. Doing so would compete with or reduce toll revenues, and a private company simply won't allow that.

The Texas Department of Transportation promises toll rates of 12 cents to 15 cents a mile, but the reality has been 44 cents up to $1.50 per mile on similar projects that just opened in Austin. When TxDOT has admitted it costs 11 cents to collect the tolls, it can't possibly cover the operation or maintenance of that road with 12-cent to 15-cent tolls, much less pay the private toll operator its guaranteed 12 percent profit.

In fact, TxDOT's mantra is that the private company will charge "market rate," which essentially means tolls without limit since there will be few, if any, alternatives. Bottom line: Using CDA private toll contracts is the most expensive option for motorists. Yet the governor and his cronies claim they're doing all this without raising taxes.

Dennis Enright, an expert in these public-private partnerships, testified on March 1 to the Senate Transportation and Homeland Security Committee that CDAs cost 50 percent more than traditional public toll roads. He also stated it's always better to keep these toll projects in the public sector rather than privatize our highways in these monopolistic 50-year contracts.

The taxpayers will pay billions both on the front end with federally backed bonds and loans and on the back end through tolls for the next 50 years just to accelerate the construction of a 10-mile stretch of highway.

The same company won a deal to build Texas 130, won the development rights to build the first 600 miles of the Trans Texas Corridor, called TTC 35, and is one of two foreign companies bidding to takeover U.S. 281 and Loop 1604 in San Antonio and turn them into tollways.

So what's the solution? The CDA moratorium.

It's past time to rein in TxDOT's push to privatize and toll our public highways in these very controversial deals that amount to horrific public policy. The CDA moratorium bills approved by the Senate and the House would place a two-year moratorium on CDAs, giving the Legislature time to get the details of these contracts right before signing away our public highways for 50 years.

Let's assume that even though TxDOT's budget has tripled since 1990 and doubled since Perry took office, and even though TxDOT has $7 billion in bonds available to it, we are still short of cash for highways. A recent Texas Transportation Institute study showed indexing the gas tax to inflation is all that's needed to meet our future transportation needs without tolls.

Politicians in the House, in particular, need to have the political will to enact the most affordable, most sensible financing solution. All the options we're faced with are tax increases of one sort or another since tolls are clearly a tax, an aggressive one in the hands of a private company.

However, before adding one dime to TxDOT's budget, the Legislature must also pass San Antonio Sen. Jeff Wentworth's bill to stop any further hemorrhaging of the gas tax that's been going to nontransportation sources. The taxpayers won't tolerate putting more money into a leaky boat. That's what got us into this mess in the first place.

Since an ounce of prevention equals a pound of cure, let's revisit the gas tax to prevent this shady widespread shift to private tolling and be done with it.

 

Terri Hall is director of Texans Uniting for Reform & Freedom, a nonprofit, grass-roots organization working to educate citizens about tolls and the Trans Texas Corridor.