Investing pension funds in toll roads is an irresponsible–and immoral–idea
I doubt whether Rick Perry, David Dewhurst, or Tom Craddick has ever heard of the Lane Cove Tunnel in Sidney, Australia. If they had, they might not be so eager to raid the teacher and state employee retirement funds to build toll roads.
On the day the Olympics opened (08/08/08), the Sidney Morning Herald carried the news that the tunnel “is rapidly turning into a bottomless pit for its financial backers….” Two credit rating agencies, Standard & Poor’s and Moody’s, have warned that the toll road could default on its $1.1 billion debt with a year. The tunnel has suffered three consecutive monthly dropoffs in traffic usage. The estimated usage before the road was built was 100,000 vehicles per day; actual numbers in June and July barely exceeded 50,000. A Standard & Poor’s analyst predicted that unless the project gets fresh capital (at least half a billion dollars), it will default within 10 to 16 months. Perhaps TxDOT, since it is such a believer in such projects, would like to invest.
The problem with the financial wheeling and dealing with retirees’ funds that Perry, Dewhurst, and Craddick have proposed is that toll road projects are risky investments. They are risky for two reasons. One is that they are subject to economic fluctuations that affect people’s driving habits, such as the price of gasoline or the pace of development. The second reason is that, when government is involved, they are vulnerable to political pressure and favoritism. Google “toll road defaults” and you will find a trove of stories with unhappy endings. The Camino Columbia toll road in Laredo, which was rife with political intrigue over which landowners would benefit from having a road go through their property, opened in 2000 and defaulted in 2004. Cost: $90 million. Auctioned off for: $12 million. Tx-DOT bail out acquisition payment: $20 million. The Dulles Greenway toll road to Washington’s Dulles Airport defaulted on its bonds within a year of its opening in 1995. The private owner, Toll Road Investors Partnership II, have lost money every year since the road opened. When toll roads lose money, tolls go up–in this case, to $4.80 by 2012. That works out to an astronomical 35 cents per mile. There are similar stories in Orange County, California (where the state had to buy failing toll lanes), and along Florida’s west coast, and near Richmond, Virginia, where the 8.8-mile Pocohantas Parkway, financed with tax-free bonds, has suffered around a 50% shortfall in projected toll receipts; the state has had to maintain the road because the private owners don’t have the money. Bond ratings have been lowered to below investment grade. To pay off the bonds, the toll was increased by 50%.
It is true that many toll roads have been success stories. In Texas these include the Dallas-Fort Worth Turnpike, which paid off bondholderes with toll revenues after thirty years and became free Interstate 30; the Dallas North Tollway and its northern extension; and the Sam Houston Tollway on the west side of Houston. The issue here is not toll roads per se. It is toll roads built with pension funds (and probably other investment funds as well, such as the Permanent School Fund and the Permanent University Fund). These are trust funds. They belong to the members. It is morally wrong to require fund managers to invest them in risky ventures like toll roads. Does anybody doubt that there will be pressure on the pension funds to invest in certain projects that favor certain people and certain contractors and certain areas? We all know what kind of people we are dealing with here. Rick Perry can’t resist it. He appointed the members of the boards that oversee the pension funds. These deals will be neck-deep in politics.
The Statesman’s story on the leadership’s plan quotes Britt Harris, the chief investment officer of the Teacher Retirement System, as saying that investments in infrastructure made sense if the proposal was “equal or better than something we can get [in another project].” Harris then pointed out that the fund’s “ultimate loyalty is to the members,” not to target investments based on geography or politics. The last clause does not appear in quotation marks in the article. Bravo for Britt Harris, but I think he should keep his resume updated.
The biggest risk in toll roads as investments is political pressure. The pressure comes in two forms. The first is pressure on the consultants to provide favorable projections for use of proposed toll roads. Does anybody trust TxDOT–or the consultants they hire, or the private entities they seek to contract with–to do hardnosed, accurate projections? If you do, then consider these comments from an article in Business Week several years ago, at about the time Rick Perry was unveiling his proposal for the Trans-Texas Corridor:
* “There is a history of feasibility studies for toll roads being overly optimistic,” says John J. Hallacy III, director of municipal bond research for Merrill Lynch and Co.
* “Of the 10 major private toll roads constructed since the mid-1990s, nearly half carry far less traffic than projected. Some $4 billion in toll road bonds risk default over the next five years unless they’re refinanced,” estimates Robert H. Mueller, a municipal bond analyst at the J.P. Morgan securities Inc.
What about financing toll roads with bonds? Well, don’t expect bond raters to give the bonds a good rating. I’m quoting here from an article that appeared eight years ago in a tollroad industry publication, so it is possible that things may have changed, though I doubt it. Credit is much harder to get today than it was in 2000.
Fitch-ICBA, the New York bond rating agency says that there is a permanent bifurcation of the toll road bond market. Established systems of toll facilities can expect to be rated in the range A to AA, whereas most standalone and startup toll facilities will be rated BB- to BBB. They see a continuing demand for new toll road financings because of what they call a “seemingly unbridgeable gap” between highway needs and the ability to finance them with tax monies that toll projects can often help to fill.
According to BondsOnline, bonds rated BBB are “lower medium grade” and bonds rated BB- are “speculative.” The lower the bond rating, of course, the higher the interest rate that bond buyers demand. No one is going to be getting any bargains on toll road bonds. And AAA ratings are just a dream: “Fitch says that the ever present possibility of state governments siphoning off surplus toll revenues or leveraging them for other borrowings prevents state owned turnpikes from achieving the AAA rating.” So how can asking pension funds to invest in these bonds ever be a prudent investment? It can’t.
The article continues: Another problem with bonds for highways is that bond rating houses distrust state governments. It is unlikely that any state owned turnpikes will ever reach AAA: The key reason is susceptibility to political interventions.
I have said this before, and I will say it again. There is a sensible way to finance roads. It is to increase the gasoline tax and index it to inflation in the highway construction index. The gasoline tax has some weaknesses. Part of it is diverted to public education. People drive less when gasoline prices go through the roof. Cars are more fuel-efficient. All of this cuts into the revenue potential of the tax. Nevertheless, Texans still love their cars. The suburban lifestyle here is designed around the automobile. Even if the revenue per mile driven is declining, there is a lot of life left in the tax. A portion of the revenue could be dedicated to paying off the bonds for toll roads. This should be capped to ensure that money will still be available for free roads. While the resistance to tax increases is formidable, so is the resistance to toll roads. If you can persuade the public that a gasoline tax increase will reduce the need for toll roads, I think that proposition could be sold. Anything is better than insisting that the savings of retired teachers and state employees be invested in risky ventures like toll roads.
texun says:
Nice try, Paul, but I doubt that Perry and Dewhurst stay awake at night worrying about teachers’ pensions. With Perry, the problem is that those teachers just don’t contribute enough to his campaign treasury; with Dewhurst, it’s his belief that anybody worth listening too must be worth at least $100 million.
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RWB says:
Don’t the pension fund managers have control over their own investments?
If so, then investing in a toll road seems to break the basic law of diversifying your investments to reduce risk.
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paulburka says:
Like all state agencies, pension funds are overseen by boards of directors who are private citizens appointed by the governor. The chair of ERS is Bill Ceverha, a former legislator and lifetime political hack. Some people of substance are on the board. TRS appears to be in better shape, but all the members of both boards were appointed by Rick Perry.
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oldengineer says:
I can only speak about the ERS board since I receive a monthly ERS annuity check. The ERS board is made up of 6 members, only one of which is appointed by the Governor. There are two other appointees—one by the lieutenant governor and one by the chief justice of the Texas Supreme Court. The other three members are elected by the current state employees and retirees. The current chair is Owen Whitworth who is an elected member and an employee of TxDOT and head of its internal audit office. He has a very good reputation of service to the board and State. I wonder if he would have to recuse himself when the issue of investing the pension fund in transportation infrastructure came up? Cerverha’s six-year term is up at the end of this month. I wonder if he will be reappointed by Craddick? I am in Senator Ogden’s district and will be letting him know about my strong opposition to the proposal by Perry, Dewhurst and Craddick (as well as his own) to invest TRS and ERS pension funds in toll roads.
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Road Hog says:
What’s irresponsible and immoral is this whole post.
First and foremost, Burka claims/assumes infrastructure investment would be required of the state’s pension funds. I, for one, can’t find one single reference to mandatory investment, probably because it wouldn’t be mandatory. Per usual, Burka makes a whole lot of insinuations and ascribes evil motive based on false premises.
Second, investing in infrastructure makes good sense if it’s a good investment. Pension funds make these kind of value judgements on a regular basis. It would be no different in deciding whether to invest in a particular project or a larger fund. Hell, Texas funds already invest in infrastructure. I believe the GLO and perhaps UTIMCO already do so. Other government pensions funds nationally and internationally invest in infrastructure, including Ontario teachers and CalPERS, which just recently voted to commit 3% of total market assets to infrastructure through 2010.
So what do CalPERS and Ontario teachers, just to name 2, know that Burka doesn’t? That investing in good infrastructure projects means stable, long-term returns, what is just what pension funds like.
Third, I love love love the fact that Burka, who claims to be such an expert on Texas government, is either 1. too lazy to check just who serves on the TRS and ERS boards and how they are selected to serve and by whom; or 2. lying to advance a biased, political argument. Perry not only doesn’t appoint all the members, some members on both are elected by the members of the pensions. Really, Paul, it’s not asking too much for you to do a quick Google search before spouting off.
Finally, and not to put too fine a point on it, in the past you have been critical of private investors building roads because all the profit would go to them and not the state. Now, you say, private investment in roads is risky and pensions will lose money? Which is it? How would the evil Spaniards make money but not the pension funds?
How’s this for a novel idea? Why not wait for specifics of a proposal before you declare something irresponsible and immoral? How about talking to some investment experts, or better yet, transportation finance experts? You know, educate yourself a bit before jumping to conclusions.
The fact is, creative ideas such as this are necessary to help Texas meet its vast infrastructure needs. I love how you think raising the gas tax is the silver bullet. The legislature couldn’t raise the gas tax enough to meet the state’s needs, which run anywhere from 50-80 billion dollars. That’s not counting local needs, which in the Metroplex alone exceeds $100 billion. Not to mention, do folks in rural Texas really want to pay the extra gas tax so folks in Houston, Dallas, Fort Worth, San Antonio and Austin can have more roads? Wake up, Paul. With declines gas tax revenues toll roads have to be part of the solution. If you don’t like them, don’t drive on them.
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Anonymous says:
WOW, even with that satan Williamson dead and buried TxDOT continues to grow tenticles like ivy upon a university building wall.
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Bill Bunch says:
Road Hog is clearly exactly that — a pig for more billions in debt-financed road building. The alleged “needs” are only road builder pipe dreams.
With the end of cheap oil, total driving is already plunging. This trend is very likely to continue. A future with less driving means a much reduced need for roadbuilding.
Rushing ahead with billions of new roads financed with 30 or 40 year bonds backed by pledged future gas tax and toll collections at this particular time in history is simply irresponsible. It’s got bust and bailout written all over it. Plus, we can’t afford to maintain the roads we’ve got.
There’s an obvious problem when toll road builders paint an overly rosy picture, claim they and they alone are assuming the risk, but then turn to public pension funds to bank roll their projects. When they go belly up, then taxpayers have the choice of leaving the teachers and other public employees with huge losses or bailing out the public employees along with the private tollers.
If we are going to take on debt for transportation, then that debt should align with the global realities of peak oil and climate change, rather than pretend like these world changing phenomena do not exist. Alternatively, we should return to the pay-as-you-go system of transportation funding that worked just fine for 50 years.
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McBlogger says:
I feel like I should set my hair on fire for writing this but this is really excellent work, Paul.
Road… come on. They float these trial balloons and if Burka and others don’t slap them down, then they’ll move forward with them. As for infrastructure being a sound investment, it’s not. Even in the US there is some political risk and I’ve seen little of substance to indicate that these projects are anything other than a boon for IB’s to package the securities and sell them and the servicers who’ll manage the payments.
Oh, and of course, the wonderful folks who’ll construct and manage the project. And that certainly won’t be TXDOT. After things are sliced and diced, the expected return is questionable at best.
CalPERS has some really smart people managing it and some even smarter ones advising it. I have no doubt they are looking to make an investment in this, but the question you’re apparently unconcerned with is AT WHAT PRICE? I don’t think they’re looking to invest in fresh deals… I’d be willing to bet they’re going after some of those already trading in the toilet. And 3% of assets is a nice size speculative investment. You and I both know that politics play an enormous role in the management of TX pensions and it will, no doubt, make the wrong decision if allowed to do so and invest far more than is prudent. Because Texas needs the roads, or at least that will be rationalization.
These schemes are neither clever, nor effective. They’re a way of diverting responsibility for infrastructure and trying to figure out a way to feed their cronies. It’s the worst kind of corporate welfare I’ve ever seen.
As for the profit, the bottom line is that toll roads are more expensive because of one essential fact… construction costs are a constant since we contract everything out anyway. With a toll road, you have the profit for the operator. Period. There’s always going to be that extra slice on top. And the tolls on these projects don’t go away.
I gotta say, I do love the estimates you dredged up. What are those, ca. 2002? The old estimate that was found to be inaccurate by, what, $20-30 bn? Why not also let everyone know that this is for a system where no one will ever have to sit in traffic. In 2050. Just what we need right now.
No one argues that we need infrastructure. What we do not need is creative financing. Real world solutions will work beautifully.
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Roger Baker says:
For those policy wonks out there, here is how the toll road advocates themselves see the situation; a sharp dropoff in ridership which means that bond lenders stupid enough to lend long term are getting awfully scarce:
The toll road industry, being comparatively deficient in unscrupulous politicians in places outside Texas, is praying that maybe gas prices will go down or folks will shift to hybrid cars or something. Fat chance. They don’t understand peak oil; world oil production has now been flat for two years and is about to decline.
Here are some of the best scholarly links to convince those capable of understanding the world energy supply situation, which is just getting started:
– Roger
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Roger Baker says:
Sorry, that last post stripped out my links; maybe they will make it through this time. — Roger
http://www.tollroadsnews.com/node/3697
http://www.energybulletin.net/node/46199>
http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf
http://www.energybulletin.net/primer>
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t logan says:
flim flam and snake oil – these ego maniacal, self-serving, interlocutory sorry escuses for public servants need to be trounced by constiuents from the top down.
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CSL says:
It is hard to read a blog posting where the author constantly refers to SYDNEY, Australia as SIDNEY, Australia. It is spelled S-Y-D-N-E-Y. Also, It’s the Sydney Morning Herald, which can be found at: http://www.smh.com.au/
It’s hard to take you seriously when you can’t even spell Sydney.
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Clinton says:
The Texas Monthly has provided an excellent service by exposing an attempt by the state government to use the retirement funds of educators in the state to build Texas highways and/or Toll Roads. The article written by Paul Burka does a superb job in showing this is a bad idea. The teachers in this state don’t make a whole lot of money and have very little to live on when they retire……..so for some agency to use their money with little to no chance of repaying it is almost unbelievable. I hope the magazine article will inspire the general citizenry of this state to contact their legislator as well as the governor’s office and voice a big ‘no’ to such an idea. This amounts to nothing more than abuse of an agency and to those who are powerless to stop it. At some point, an action like this can come home to anyone or anyone’s retirement. I can only hope that your very excellent article will be helpful in stopping this poor investment strategy. I never recognized the immense value of reading the Texas Monthly until I read this article and realized how devastating such an action could be to educators. Thank you for watching out for the common people in this state.
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txasslm says:
calling someone or something irresponsible is one thing. making a judgment that someone or something is immoral sounds like something karl rove would do.
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paulburka says:
To txasslm:
I have no qualms about my characterization of subjecting trust funds to political manipulation as immoral. This money does not belong to the state. It belongs to employees and retirees. Everyone knows that if the right project comes along at the right place with the right, well connected folks involved, politicians will use their influence to get what they want.
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paulburka says:
To CSL — im yust knot a verry gut speler. That’s not where the battles are won and lost.
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txasslm says:
15. “I have no qualms…”
i didn’t realize you had been invested with the authority and ability to divine the morality or immorality of the rest of us mere mortals. forgive me.
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Jdar says:
TXDOT is getting rid of as many non engineers as fast as they can. So more money will be needed to hire more overpaid engineers. Sounds like a good scheme to me. Wonder how long it will be before retirees will have their checks cut in half to pay for the “young engineers”?
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B/CS Observer says:
Paul, you hit the panic button too hard again.
You hit a bunch of the problems with privately financed infrastrucutre all out of oprder and without acknowleding that there might actually be SOME benefits to such an arrangment.
You should read a book called “Megaprojects and Risk: An Anatomy of Ambition”. It Talks about the pitfalls of the construction of mega projects (like the Channel tunnel, rail/highway bridges between Denmark and Sweeden) in general, and in particular with the distribution of risk beteen taxpayers, stockholders and the political and business leaders who push megaprojects and leave their taxpayers and stockholders holding the bag.
Part of the solution proposed by the authors is tto require any major project like the TTC secure at least 1/3 of its financing in the open market ffrom private sources WITHOUT a government guarantee of the privately held debt. That would allow the market to really decide if a project is viable enough to risk their money on without collusion between politicians and engineers to guarantee each others debts and pump up revenue estimates to dupe taxpayers and shareholders into investing in a bad project.
Amazon link: http://www.amazon.com/Megaprojects-Risk-Ambition-Bent-Flyvbjerg/dp/0521009464/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1219721112&sr=8-1
You have worked youself into hyperbole on the use of pension funds to fund transportation, I do not think there is any need to panic. First off, the boards that oversee these pension funds are not all appointed by Perry and secondly the individuals covered by these plans could always sue if they really thought their money was being plugged into low performing highway projcts.
Finally, I have to take issue with your “optimal” political solution of just indexing thr gas tax to inflation. The gas tax has always been an poor approximation of how much people drive, kind of like if health insurance rates were based on how much water someone drank. Tolls and other user fees force those who use roads more to pay for the additional damage they incur to our highways.
Your comment about tolls needing to include profit margins is a red herring if you admit the successful toll projects you mentioned, like the Sam Houston Tollway in Houston, are publicly owned. No need for a profit margin there, but people still pay for what they use.
And tying the tax to a cost of construction index will just be a payday for the highway construction industry and TXDoT. All TXDot has to do is spec out gold plated roads and engage in some “wink, wink, nudge nudge” behavior with contractors on tolerating cost overruns and they can run up the index, and their money pot.
Plus, unless you adjust the tax for the mount already lost to inflation, you will just stop the bleeding, which will not improve the condition of the patient.
How politically feasable will it be for the 81st Legislature to preside over a doubling of the gas tax and then to let it float away at a time when people are already furious over high fuel prices?
Tolls are the tough and unpopular way out of the box we are in right now, but it is the best one. Indexing is another Texas Style stop gap idea, just like all the stop gaps we have done with school finance. And we all know how well those have worked.
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andy says:
Teacher’s funds should be invested in fixed income guaranteed investments like T-Bills only. And if that’s not good enough, then the teachers themselves should have a say where that money is invested. It’s absolutely irresponsible for Rick Perry to mandate that their retirement is invested in toll roads. I have a 401k and I can invest my retirement in whatever I want or elect not to save for retirement and spend my money now. Teachers deserve the same freedom. I’d quit my job if my hard earned money had to be invested in toll roads. The only way toll roads are profitable are by sabotage of existing competing facilities to force motorists onto toll roads- More stoplights and 45mph frontage roads and red light cameras and more to force people to pay tolls. Pay pay pay the lazy deceptive bastards in our government that continue to lead with a stick rather than a carrot. The USA is going to be a third world country before we know it with these greedy lazy tolling bastards in power who force expensive ubiquitous toll roads upon us without a vote. Why isn’t monorail on the ballot? Costs less to operate, moves more people, and people can work while riding to work on their laptops, increasing our GNP. Time on the road is wasted, and tolls and sabotage of existing roads to force motorists onto toll roads wastes our time and GNP.
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Porteno says:
I’m a little uncomfortable with the tone of this post. Natural skepticism about this is fine. But obviously it has to come down to the numbers, and there are obviously scenarios where it’s a good scenario.
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Anonymous says:
Isn’t it funny how toll roads get built not where the congestion problems are, but where certain people want the roads to go – ie landowners and investors.
And if you research the issue long enough you will find toll roads in trouble all over the country. People are unwilling long term to shell out $5-7 to drive just a few miles. Ultimately the adjust their driving patterns and schedules to avoid paying the tolls on a regular basis.
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bentfork says:
Here is my letter to Lt. Gov. David Dewhurst after the decision of Perry, Dewhurst, and Craddick to use the TX TRS Pension Fund as a piggybank for investments in Toll Roads…
As a retired TX public school teacher and a rancher & homestead owner threatened by the TTC-69, I am profoundly disappointed and disgusted to read about the intent of the state under your leadership to use my pension funds to “shore up” the transportation adventures of Governor Rick Perry. I have spent a major part of every day since the latter part of 2004 researching every aspect of the Trans Texas Corridor and the private consortiums being offered the use of our public transportation assets for a revenue stream.. at MY expense and at the price of losing my RIGHT to determine what I may do with my own property. I also registered my dismay in the last session when virtually all constraints on the TRS Investment process were gutted without a contest with passage of companion bills SB 1447/HB 2376.
I helped to form a grassroots organization in my county & traveled to other counties in my region to help to inform them about HB 3588; attended & spoke at countless hearings & town hall meetings across the state; and contacted elected officials many times. I know far more about HB 3588 & those consortium contracts and partners than most & the risks they pose and I do NOT want my pension funds used because 3 men who will never depend upon a pension to live find it expedient.
Michael Stevens in his role on the Governor’s Business Commission Transportation Task Force & in his brief service on the Sunset Advisory Commission did NOT conclude that we needed to make the choice of “no roads or toll roads” which we have seen the state attempt through the TX Transportation Commission’s bully tactics at the governor’s behest. I attended a Houston luncheon meeting where Mr. Stevens spoke about the state’s transportation challenges and his work on the Sunset Commission. He gave me hope that some leaders have the courage “to speak truth to power”. I am well aware of those in the House and Senate who have fought for their constituents on these issues. I will be turning to them again to resist this latest outrageous decision.
In the past the governor blatantly tried to steamroll TRS Fund investments in his TX Emerging Technology Enterprise Fund and in 2003 partnered with Phil Gramm and his employer UBS to establish “dead peasant insurance” on unsuspecting retired teachers until a Chronicle article revealed the scheme & the bill was pulled down. His track record is not supportive of education or educators.
Reconsider your support for investing TX TRS Funds in toll road projects. Resist the reach for the “easy money” the TRS Fund represents. The easy money involved in the subprime fiasco has put the nation at risk. And those who Knew better in the investment banking sector did Not Do better and it is the taxpayers who are picking up the tab. ENOUGH! We can do better!
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M A Savage says:
We educaters placed money from every paycheck into the Teacher retirement Fund. Its only sensible that a majority of board members be from the field of education, not Gov. Perry or Lt. Gov Dewhurst. This country is a people who have been elected not appointed. The TRs Fund must be represented by the majority of people they represent-teachers!
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Bonnie Payton says:
My husband has been in education for 43 years going on 44. We are considering retirement. I am with the school system as well. It makes one hesitate to retire due to the economy, let alone someone using our retirement money, that we have worked hard for, for the highways. I say NO to this! Enough mistakes have been made regarding education, please do not make this terrible mistake!!!
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BERCHTA DALE says:
Out of many methods you can invest your money Municipal Bonds happen to be one of the famous. However when you invest in Municipal Bonds you have to be aware of municipal bond rates too. Municipal bonds rating indicate the merit of municipal bonds which depends on whether the bond is backed by the full faith, credit, and taxing powers of the municipality or by revenues generated by the municipal facility the bond issue finances. Consider issuer-specific information such as the wealth of the community, characteristic of the issuer, revenue stream of the project the bond is used to fund. By examining the municipal bond, you can see if it should have high ratings or low based on the factors above.
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Sarah Roberts says:
As a retired teacher I do not want my money to be used to build new roads! What a ripoff!
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Mary Jo Jernigan says:
Governor Perry& other supporters:
Can you not find money anywhere else? You want to rip off the teachers of OUR hard earned retirement. I say NO NO NO NO NO. I suggest you put your OWN MONEY where your mouth is. May you reap the big money you say will be earned by this venture.
DO NOT LET THIS HAPPEN TO THE TEACHERS OF TEXAS!!!
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Julie Munoz says:
I am a Republican and this totally smacks of a Democratic sort of wheeling and dealing with funds. I can’t imagine what they are thinking but I am vehemently opposed to raiding the retirement fund of our teachers in order to fund toll roads. This just sounds crazy. Our teachers do not get social security and their retirement is all they have in which to look forward after years of service making less than they should. This is a horrendous idea.
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Bob says:
Teacher retirement fund is not for building highways, educators put money there so that they have something left after years of service.
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Beverly says:
With all of Road Hog’s raving and seemingly trying to prove a point about what a good investment toll roads would be for TRS, the last sentence of his rant summed up the lack of interest that I, as a retired Texas teacher, have in seeing my pension fund used to build toll roads. He finished: “With declines gas tax revenues toll roads have to be part of the solution. If you don’t like them, don’t drive on them.” Exactly. If people don’t drive on them, then toll roads don’t earn money to repay the lender. Just what part of that does Road Hog find it difficult to understand as to why payees into TRS don’t want to become the mortgage holder for road building in Texas? I’ve already taken a hit on investment accounts and the last thing I need is a politically appointed board member of TRS and/or ERS messing around with my pension fund. They’ve already done that with Enron and I do not choose to give them a mulligan on that. Perry has been eyeing the TRS pension fund for years like a dog looking at a bone and it seems that he isn’t going to rest until a way is found for him to dig his hands in it. Perry and company, which includes Craddick and Dewhurst, never seem to remember that teachers are very keen about voting even if we aren’t big campaign contributors.
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Beverly says:
I just wanted to add this comment to my previous one so I could say a big Hello! to Julie Munoz who apparently posted a comment from some alternate universe. She said: “I am a Republican and this totally smacks of a Democratic sort of wheeling and dealing with funds. I can’t imagine what they are thinking but I am vehemently opposed to raiding the retirement fund of our teachers in order to fund toll roads.” Well, welcome to my world, Julie. In this universe it’s the Republicans – not the Democrats, as it seems to be in your world – who control the legislature and the political appointees.
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Brad says:
Are you kidding me..The TRS is the last perk that Texas Teachers have that we have never had to worry about. Why can’t they us the sin tax money instead….
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Rafe says:
commenting usually isnt my thing, but ive spent an hour on the site, so thanks for the info
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Филипп Смирнов says:
Прикольно написано, приятно полистать ваш сайт!
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Elle says:
My income is dependent upon the careful, wise, and very savvy investment strategies of the Employes Retirement System of Texas. Many of my friends and some relatives who are state retirees simply do not want our retirement funds to invest in toll roads. Period. Speaking only for myself, I am steadfastly opposed to tolling highways in Texas, new or old; selling tolled highways to foreign countries, like Spain; opening up the option of investment in those ventures by our retirement funds. I am a native Texan and I cannot recall a time in the this century or the one just past when the Texas legislature, governor and other elected officials did not want to get their hands on our pension funds for one purpose or another. Those funds represent a lot of money and most politicians want all the money they can get. When a red flag goes up about the state pension funds, I tend to listen. The special session that Perry has said he is going to call and for which he, and he alone, can set the agenda, will be cause for grave concern and careful watching because he strongly supports toll roads, the trans-Texas corridor, local option taxes, and opening the way for pension funds to invest in these pet projects. Articles like this one in several publications perform the service of raising those red flags.
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