Gov. Perry sticks to privatization for toll roads

April 23, 2008

By MICHAEL A. LINDENBERGER / The Dallas Morning News

AUSTIN – Gov. Rick Perry promised to keep fighting for private toll roads and his other transportation priorities Tuesday during his first major speech on the subject since the death in December of transportation commission chairman Ric Williamson.

"This is a place for big challenges, not big excuses," he told state Transportation Department employees and highway experts from around the country at the annual Transportation Forum.

Next year's legislative session, he said, can't be anything like last year's.

"The Legislature must understand that 'no' is not a solution," Mr. Perry said. "It is an abdication of responsibility."

Before last year's stormy session, lawmakers had steadily expanded Texas' ability to partner with private firms to develop toll roads in Texas.

"There remain many, many financial institutions who are ready, willing and able to invest their money to build the roads we need," Mr. Perry said Tuesday.

Across America, states from Georgia to Indiana to Pennsylvania – all facing huge road-funding deficits – have actively considered following Texas' example and seeking out private toll road deals. The results have been mixed, but since last year, those same companies' welcome in Texas has been uncertain.

In 2007, legislators rebelled over Mr. Perry's ambitious push for toll roads and privatization, demanding greater roles for public agencies such as the North Texas Tollway Authority.

Mr. Perry said lawmakers and voters alike reacted too quickly to an idea they may not have fully understood.

"Too often these debates over highways have been driven by emotion and not reason," he said. "As a result, honest debate has been stifled, and progress has been sacrificed on the altar of politics."

With Texas adding 1,500 people a day, Mr. Perry said the cost of building and maintaining the state's roads is far beyond what tax revenues will pay for. Only by inviting private firms to invest their billions in toll roads can Texas build its way out of its increasingly congested traffic jams, he argues.

Mr. Perry and his transportation department have said private companies often are willing to pay more for toll road contracts. They also agree to take on risks that have traditionally been borne by the public, such as the risk that traffic will be less than expected on a toll road.

In addition, he argues that competition with private companies helps boost toll rates, and forces even public toll authorities such as NTTA to pay more for the right to collect tolls.

Critics, however, have said it is the transportation department that has insisted for too long on building highways its own way, with too little input from the Legislature.

"Over the last four years, the previous leadership at TxDOT regrettably was tone-deaf to the Legislature," Lt. Gov. David Dewhurst said in an interview Monday. "That resulted in last year our saying 'enough' and passing a moratorium."

Mr. Perry vetoed that bill but eventually signed a compromise that Texas transportation commissioners, including Mr. Williamson before his death, have often said "slammed the brakes" on efforts to woo private toll road investors to Texas.

On Tuesday, the governor praised Mr. Williamson's vision, but he has not yet appointed a successor. Commissioner Hope Andrade of San Antonio has been serving as interim chairman and has brought a less confrontational style to that role.

The change in style has been welcome, Mr. Dewhurst said.

"Today is a new day, and I am committed to working with TxDOT in a constructive manner," he said.

But a peaceful 2009 session is anything but certain.

Mr. Dewhurst and others have demanded that TxDOT speed up its sputtering highway construction schedule by issuing more debt.

The department, in turn, has insisted lawmakers ease restrictions on tolls and stop siphoning off gas tax revenues to pay for things other than roads.

Those issues probably will be debated today, when a Senate transportation committee hearing puts TxDOT leaders on Capitol hot seats.

Mr. Perry showed no signs of retreating.

"It's possible we haven't thought of everything yet," he said. "So bring us your ideas, and let us look at them."

But borrowing more, for example, isn't one he's ready to consider anytime soon.

"Until a greater solution, and by that I mean a long-term solution, becomes clear, I am not willing to allow this state to simply go further into debt," Mr. Perry said.

Meanwhile, he called the Legislature's continued diversion of gas taxes away from transportation projects an "addiction to gas tax money" that should end.

That's a demand local leaders, including North Richland Hills mayor and Regional Transportation Council chairman Oscar Trevino, also have been making.

The Legislature isn't making any big promises on that front, not yet anyway.

Mr. Dewhurst said he expects lawmakers to reduce those diversions next session – at least by enough to fund debt payments for the bonds that TxDOT so far has refused to issue.

These policy disputes in Austin are just part of a burgeoning conversation held in statehouses across the country and in Washington, where Congress is gearing up to rewrite federal transportation policy.

The fights are increasingly over the same policy differences: Some call for higher gas taxes, some for more tolls and many want both.

U.S. Sen. Kay Bailey Hutchison, R-Texas, issued a statement Tuesday against raising gas taxes, a position shared by Mr. Perry and Mr. Dewhurst.

But other leading voices said a solution that doesn't push gas taxes higher will never be enough.

Mr. Trevino has heard the hardening positions for months as RTC chairman. So he wasn't expecting surprises from Mr. Perry's speech.

It would sound something like this, he predicted: "We don't have enough money; we don't have enough money; and we don't have enough money."

Trouble is, Mr. Trevino said, that part is only too true.