August 25, 2008

The Transportation Daisy Chain

A certain political consultant emailed the release of the Republican Leadership (now ain't that just one hell of an oxymoron?) regarding their willingness to work with one another. After reading it, I responded to him with

Craddick sucks off Dewhearst sucks off Perry eats out Delisi sucks off Craddick?

To which he responded

I'd rather not have that image in my mind, but, yes, I think you have it about right.

Here's the gist...

Highlights of the new plan:

Stop funding the Texas Department of Public Safety with gas tax funds, and divert those millions to road construction. DPS could instead be funded with general revenue tax funds.

What an AWESOME idea, y'all! We've only been asking for it for years but it's good to see that you're finally doing what we told you to do. Next, find the revenue to fund DPS without the gas tax. Good luck with that, R's. WITHOUT taking away CHIP.

Create a special Transportation Finance Corporation to allow Texas-based investment funds to directly invest in state transportation projects.

Rutro! This is the kind of place where you people normally take a nosedive. Here's the inside skinny... the folks at Morgan Stanley and Goldman Sachs (whatup, peeps!) are having problems selling toll bonds. Which means that road privatization has pretty much ground to a halt along with everything else in the debt markets, at least everything risky (read: toll revenue bonds). If Texas had issued tax-backed revenue bonds and indexed the gas tax (AS ADVISED YEARS AGO) they wouldn't have had any problems selling off the debt. However, toll bonds (much like subprime and Alt A mortgage credits) are questionable at best, valueless at worst. Which means nothing is selling and there's no way for Perry and his cronies at Zachry (and THEIR friends, Cintra (Bluebonnet)) to get the money to buy the roads. Burka has some great stuff up on just how successful road privatization has been. For investors.

So, now that private money has evaporated to finance your questionable plans, you morons want to dip into the underfunded public pensions!??!?!?! Lemme guess, you'll be giving the investment banks a cut on that transaction to work as adviser, right? And, of course, Zachry will be brought in to manage everything and take a cut. Annually. So, what does that leave for the pension fund?

Great idea, you guys! Precisely what I'd expect from folks with the intellectual capacity of sparrows.

Authorize perhaps as much as $5 billion in bonds for additional highway construction projects. Voters approved a constitutional change in November 2007 to allow these bonds, but legislation is still needed to authorize them.

Oh, those tax backed bonds! Yeah, you should totally issue those. Here's the thing, though... at some point, you R's are going to have to finally admit to folks you've been lying to them about the possibility of having economic growth, good public infrastructure and excellent services (schools, fire and police) all while paying less in taxes. Simply put, you've been selling (but not delivering) a free lunch. It's worked so far because no one's been real hungry. Now they're starving and they want something to eat.

EOW nails it and picks up on what the Statesman (and other major media sources) have always missed. These aren't REAL solutions, it's a shell game designed to make it appear that something is happening... and to put off the day when the bill really comes due.

The really wonderful post on all this comes from Paul Burka at Texas Monthly who lays it out beautifully.

The reality that no one on the R side wants to admit is that their ideology is fundamentally flawed. In the real world, privatization does not always work to the benefit of consumers, especially in the absence of substantive GOVERNMENT oversight. An old school economic conservative can you tell you that. In fact, I've done it several times. We, unlike the ideologues running the government who've never really worked in business, know from first hand experience that private enterprise can be every bit as wasteful as big government.

And we hate waste, whether it's Democratic or Republican. And crony capitalism is definitely waste.

One last point, there appear to be those who still want to parrot the old estimate that our transportation funding shortfall is $80-100 bn. It's NOT. It's not even close especially when you aren't building TODAY for capacity you won't need until the late 2040's. As a side note, I'd also like to ask the Lege to set up an independent body, appointed by the LEADERSHIP from both parties in the Lege, to audit TXDOT and what they are paying suppliers. I find it UNBELIEVABLE that true road constructions costs have escalated more rapidly than anything other than gold bullion.

Posted by mcblogger at August 25, 2008 09:06 AM

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