Perry signs legislation to halt private toll roads

But the moratorium excludes virtually all North Texas projects

June 11, 2007

By CHRISTY HOPPE and JAKE BATSELL / The Dallas Morning News

AUSTIN – Gov. Rick Perry signed a new transportation law Monday that eases some of the fears over runaway toll roads and gives local authorities more control over road projects.

The bill was a compromise hammered out in the final days of the legislative session between the governor, who has championed private toll roads as a way to quickly build highways without raising taxes, and lawmakers, who have felt the wrath of rural landowners and skeptical urban commuters.

Legislators revisited a 2003 law that many felt had hidden consequences, such as allowing private firms to take over large swaths of the state highway system, stripping property owners of their land and discouraging public entities from competing for toll projects.

"Texas was becoming the test tube for private equity plans," said Rep. Lois Kolkhorst, R-Brenham, who pushed for a two-year moratorium on private toll deals.

Lawmakers initially – and overwhelmingly – passed a bill that would have placed more restrictions on the governor's efforts to privatize roads.

Mr. Perry vetoed that bill.

The bill he signed Monday has a partial moratorium in place. But the two-year freeze was dubbed the "Swiss cheese moratorium" because it's riddled with exemptions, including virtually all North Texas toll roads already in the works.

"I am proud to sign this legislation because it will help Texas build the roads we need to manage our state's tremendous population growth," Mr. Perry said.

The bill halts at least one project in San Antonio. And Texas Transportation Commission members have said the moratorium, despite all its exemptions, still sends a chilling effect to private investors.

"A seemingly innocuous moratorium is, in effect, a freezing of the entire program," said Ric Williamson, the commission's chairman, in an earlier interview.

Mr. Williamson acknowledged that the past five months were humbling for the Transportation Department.

Lawmakers repeatedly criticized what they described as the agency's rogue and arrogant tactics in awarding toll road deals.

"The whole process has been inalterably changed," he said. "We know clearly what [lawmakers'] concerns are, what they want us to do, what they don't want us to do. And we will change our behavior accordingly."

The bill gives local entities such as the North Texas Tollway Authority the first option to build toll projects, limits private toll contracts to 50 years and establishes a new process to determine a road's market value.

On Thursday, transportation commissioners will consider a list of possible projects to develop under the new legislation, which takes effect immediately.

However, state leaders still have plenty of questions to answer about how to foot the bill for Texas' exploding traffic needs.

As lawmakers sought to curb private toll roads, they also thwarted bids to raise the state gas tax to keep up with inflation and to expand transit systems through voter-approved sales-tax hikes. They even toyed with suspending the gas tax for the summer.

If private investors' dollars and tax increases are so unappealing, how will Texas build new roads to keep pace with the state's mushrooming growth? Over the next year and a half, a nine-member study group will take a stab at finding an answer.

"What people seem to forget in this whole debate about roads is that the citizens always pay for the roads," said Sen. Robert Nichols, R-Jacksonville, a former transportation commissioner and a leading backer of the moratorium. "The question is, how do you want to collect the money?"