January 12, 2009

Tolls : Senator Carona responds...

Well, we got an answer to our question from Steven Polunsky, Committee Director for the Texas Senate Committee on Transportation and Homeland Security. It should be noted, Mr. Polunsky took time out of his Friday night to write this ( I got it while enjoying Andi Smith's FABULOUS show at Cap City). Needless to say, we're taking it seriously...

Senator Carona believes there is a great need for improved mobility to address congestion and the attendant air quality problems, traffic safety issues, and connectivity between cities. He is working on legislation, some of which he is starting to file, to support transit, passenger and freight rail, and alternative fuels. On roads, his first priority is to stop diversion of transportation revenues to non-transportation uses. Second, fix TxDOT. One piece of that involves moving some functions out of the agency such as vehicle title and registration, vehicle dealer regulation, automobile burglary and theft prevention, and possibly others, so that oversight of road finance, planning, design, and construction can be increased and focused. Third, issue the full amount of debt approved by the voters, and find an optimal use of bonds and debt. Fourth, make better use of existing revenue sources by indexing the motor fuels tax to nullify the effects of inflation and consider raising it.

Oh, Steven, you had us at hello. Everything in this paragraph is perfect. Indexing the gas tax will require Carona to reach deep down and it's gonna be hard to garner support. Mostly because there are very few in the House and Senate brave enough to do this, own it and go back to their constituents and tell them the truth, that increased transportation taxes are an investment in the future.

What is the potential for passage of all of these? Better than any session before, but still mixed. That being the case, Senator Carona believes it would be foolhardy to eliminate options for providing mobility, because we may find ourselves in June with existing revenues maxed out and no other options. That leaves the options that Senator Carona finds less desirable, tolls and public-private partnerships. The bill to extend the CDA sunset date keeps that option on the table, it's a January bill. The Legislature has a range of options available, from striking the ability to have CDAs altogether to improving the CDA law by addressing contractual provisions such as buyback clauses. Senator Carona believes you can't have that debate in a vacuum, it needs to happen in the context of passing legislation into law that makes the best options possible.

And here's where things go off the rails because it's clear that he's boxing himself in. First, let's differentiate between tolls and PPPs. They don't go hand in hand. While we may not like tolls, we're also not adamantly against them. Our problem with tolling is that so many roads are going to be tolled and the demographic sweep is so broad that it becomes a de facto mileage tax that will end up disproportionately effecting the poor. Further, while it may not have been TXDOT's primary motive, it seemed like they were looking for a permanent source of funding independent of elected officials. Finally, the tolls being designed won't go away. Most Texans have no problem with financing a road with tolls that will eventually disappear. What has been proposed so far doesn't fit that model.

Still, even with these drawbacks and addressing the issue of tolls that eventually go away, tolls can be a good solution in certain situations if they are run by the state.

What we are adamantly opposed to is privatization of infrastructure. There are a number of reasons...

1) Transportation infrastructure is a public trust. The roads we all pay for with our income, sales and gas taxes (not to mention tolls) are for the use of us all, in good condition and bad.
2) Our economy is dependent on low cost infrastructure. The idea that privatizing roads will somehow liberate more money is ridiculous since it only creates an additional burden on taxpayers by adding another tax, this one levied by a private corporation which may or may not have absolutely no economic risk in the transaction. There is absolutely no way, all things being equal, that a private company can run a road any cheaper than the state because the state doesn't need to make a profit.
3) Private tolling, legalized extortion. In many areas, where the proposed private toll road will be the only reasonable limited access road, the choice is either pay or sit at light after light for miles on end. That's not a choice.
4) The lease terms presently in effect and those that are proposed involve terms that make these functional transfer of ownership, especially in terms of renewals. That's just completely unreasonable.
5) Most of the PPP contracts carry loss provisions that serve as a loss backstop for the private investors creating a win-win situation for them and a loss for taxpayers. Basically, if actual traffic fails to meet projections, the state agrees to make up the difference to the private company who owns the concession. If private companies want the profit, they need to take the risk as well.

There's no such thing as a free lunch and Texans, better than any other folks in the nation, understand that. What hasn't been explained to them is that significant improvements need to be made or the traffic they're dealing with now is about to get a lot worse. Trust me, it won't be tough for them to understand.

In reality, indexing the gas tax will take care of the problem if we continue on the path we're on. Privatization is a rather pathetic attempt by elected officials to pass on the burden of raising money for transportation infrastructure. It's just not an option to that makes sense, no matter how bad traffic gets, because it ends up costing us far too much down the line.

Posted by mcblogger at January 12, 2009 02:33 PM

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