Capitol Hall Report- March 30, 2016

Time to audit unaccountable transportation agencies

Texas’ first public-private toll road on SH 130 recently went bankrupt.  However, rather than be released from the controversial public private partnership contract, the Texas taxpayers are being asked to endure the possibility of yet another private entity taking over the debt-laden project.

Many Texans were hoping to finally have SH 130 back under the state’s control as a free road.  In spite of this desire, Texas Department of Transportation (TxDOT) spokesperson Veronica Beyer made clear that it is not going to happen: “The SH 130 Concession Company filing for bankruptcy should have no impact on Texas taxpayers or the traveling public. No state money was used to build the portion from SH 45SE south to Seguin operated by the SH 130 Concession Company, and the state is not liable for any of its outstanding debt. SH 130 continues to be a viable alternative for drivers who want to bypass Austin and avoid congestion on Interstate 35.”

No impact? Really?

The project tapped into federal money and secured a $438 million TIFIA loan that is backed by the federal taxpayer. We are all federal taxpayers. How will that loan ever be repaid and the money be returned to taxpayers in light of Cintra’s bankruptcy? That is an impact – a big one. While no state funds were used to construct the privately operated tollway, plenty of state money was used to support the private project, including $19 million in legal fees, millions for public hearings, an environmental review, and to acquire the right of way, $20 million a year in subsidies to reduce truck toll rates, and over $200,000 to advertise the private tollway to drivers in San Antonio. That does not include the state resources expended to incorporate the private toll road into the state’s TxTag toll collection system, the profit guarantees agreed to by the state, or the cost to taxpayers for any ‘uncollectable’ tolls by Cintra, which are primarily international drivers from Mexico for whom the state lacks billing and vehicle registration information.

Then there is the viability question. TxDOT argues SH 130 is still a viable alternative to I-35 to bypass Austin congestion. However, the toll project has never been financially solvent on either the state-operated northern stretch or the privately-operated southern one. The traffic projections clearly over-promised and under-delivered. There is apparently a tremendous disconnect between our transportation agencies and fiscal reality. There was an earnest discussion last session about buying down the bond debt on the state-controlled section so that SH 130 could operate as a non-toll highway and attract trucks and other pass-through drivers to move from I-35 over to SH 130 and bypass Austin traffic. Now the window of opportunity is opening to regain control of the southern stretch and make it a non-toll section as well, yet our highway department wants to keep the status quo.

It is time we dig into the financial details and audit not only TxDOT, but these other governmental transportation entities like toll authorities, Regional Mobility Authorities (RMAs), and local Metropolitan Planning Organizations (MPOs). All are unaccountable bureaucracies that do not answer directly to the taxpayers. Taxpayers do not directly elect or choose which elected officials end up on the boards of these MPOs, known as the Regional Transportation Council in the Dallas-Ft.Worth Metroplex. Conveniently, most MPO members are not associated with the areas in which the board implements toll projects, giving impacted residents little to no say about toll taxation. Resistance to tolling largely falls on deaf ears and if residents do have representation on the MPOs, it is generally not enough to sway a vote of the full board.

Yet MPOs hold tremendous power over transportation decision-making. In fact, no toll project can move forward without the blessing of a community’s MPO. TxDOT and MPO documents reveal that not a single toll project left in the state’s plan is financially viable without state or other public money to prop them up. Yet these boards continue to give them a green light, knowing they are not fiscally feasible nor sustainable. So while Cintra’s stretch of SH 130 may not  saddle the state of Texas with its debt as a result of the private concessionaire’s bankruptcy, virtually every other toll project that has come online or that will be online in short order, will indeed have major fiscal implications for all Texas taxpayers.

Last year, I authored the senate version of the bill (HB 2612) to study how to eliminate tolls across Texas. With passage of HB 2612, which commissioned a study to eliminate tolls from state-funded toll projects, we moved the goalposts in the taxpayers’ direction. But there is clearly more work to be accomplished. I strongly advocate removing tolls from the state-operated northern segment of SH 130 in order to immediately provide traffic relief on I-35 through downtown Austin, and I urge the same on Cintra’s southern leg, but not if it requires the Texas taxpayer to take on any of its $1.3 billion in outstanding debt.

Texans should be liberated from this bad contract on SH 130 and allowed to be back in the driver’s seat, not only on this roadway, but every public highway across Texas. This cannot be accomplished until transportation decision-makers are held accountable and their books and contracts are subject to independent and thorough public scrutiny. The economic impacts of this debt, tax burden, and the hindrances to our freedom of mobility, dictate that we must end the era of toll roads.