CDA’s: Why is Perry spotlighting his weakness?
The danger of a special session for a governor is that he won’t get what he wants, and in failing to get it, will open himself to charges of failed leadership. That is why Perry planned to limit the session to the Sunset Safety Net bill that will continue the existence of TxDOT, the Department of Insurance, the Racing Commission, and other agencies, and to authorizing $2 billion in highway construction bonds that had previously been approved by the voters.
But Perry also wants the Legislature to renew the authority for Comprehensive Development Agreements, the controversial financing tool that privatizes toll roads, and to establish an infrastructure bank, managed by TxDOT, that would lend money for road projects. This is political dynamite. Toll roads are Perry’s biggest political liability. They have little support other than business groups. They are particularly unpopular with captive suburban commuters who are the key voters in a governor’s race.
This is the controversial language in HB 1, pertaining to the bonds, the proceeds of which may be used “to provide money for deposit in the Texas Transportation Revolving Fund or similar revolving fund authorized by law, to be used for the purpose of making loans for highway improvement projects as provided by law.” Guess who administers the intrastructure bank? TxDOT, of course. This has many members worried, lest TxDOT lend money that would aid the cause of privatizing roads. One of the concerns, for example, is that the bank would loan money to local toll agencies, which could then sell the project to Cintra or another private entity. It is my understanding that Chisum will have an amendment to provide safeguards against hanky-panky. HB 3, which would reauthorize CDAs, has the safeguards, but, as has been reported elsewhere, the bill lacks the support to become law — no one but TxDOT likes CDAs — and has not been scheduled for debate.
These are not good times for toll projects. “The credit market collapse and political opposition have all but killed the U.S. highway-privatization trend,” Barron’s reported in May. That same article quoted Toll Road News, an Internet publication: “Toll-road traffic decline has been more severe than in any other post-war recession.” Toll road traffic is down by 6%, and truck traffic, which accounts for half the usage on toll roads, is down 50%.
The governor’s fight for more toll roads and more Comprehensive Development Agreements makes no sense politically. It puts the spotlight directly on his most controversial policy. It’s a heaven-sent opportunity for Kay Bailey Hutchison to differentiate herself from Perry, but when I spoke to a Hutchison adviser today, I heard the same line, that she does not want to engage with the Perry at this time. If not now, on the best issue for her, when?
Tagged: comprehensive development agreements, highway construction bonds, rick perry, special session, toll roads, txdot
Emptyk says:
KBH is the strongest ally Rick has for re-election. Compared to the way he has mangled the state, her vapid comments present no alternative.
Kay’s lack of a campaign outside of country clubs and board rooms has given him an opportunity to strengthen his hand.
For Kay not to run at him immediately and hard about CDA’s shows a pattern of hers that resembles political suicide.
If she stays in the Senate until September, she will have to vote on Sotomayor’s nomination to the Supreme Court. She cannot cast a vote on Sotomayor that doesn’t infuriate either Republicans or Latinos.
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Anonymous says:
What’s the over and under that KBH backs out of the governor’s race?
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paulburka Reply:
July 3rd, 2009 at 8:27 am
You can’t do an over/under on whether she drops out of the governor’s race. That is an odds bet. I’m not an oddsmaker, and in any event I would wait until the reporting date for contributions before I made any odds. The problem with doing an over/under on whether she drops out is that there is no certainty that the eventuality that is the subject of the bet on will occur. So, you could establish a date — say, Labor Day, or Hallowe’en — but there could still be no winner or loser, if she files to run in January.
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Rube Goldberg says:
What is a basic lesson in politics? When your opponent is digging a hole for themselves, always let them keep digging. Why would KBH enter the fray of the steaming disaster that is the special session call (demand) to extend CDA (private toll deals). The CDA is seen by many Texans as a weapon to build the Trans-Texas Corridor, or other unpopular projects at inflated prices.
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Pat Reply:
July 3rd, 2009 at 5:26 am
Excellent point, Rube. But KBH has a pervasive pattern of non-engagement that suggests more than a simple philosophy of “let-Rick-dig -to-China.”
Burka, I don’t think this was a bad move for Perry. You can’t win elections without money, and supporting toll roads probably pleased a lot of his corporate donors.
Most importantly, why the hell isn’t the law library open today but I have to go in to work?!
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paulburka Reply:
July 3rd, 2009 at 4:49 pm
Pat –
One thing Perry has never had to worry about is money. He does have to worry about votes. Toll roads are very unpopular.
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007 says:
Why, Paul?
Because he’s not playing politics. He’s leading. He’s doing what he thinks is right for Texas. I agree with him.
Free market solution to transportation funding: PPP’s. Roads are built where they’re needed when they raise revenue. Tolls prevent a $1.20 (low-ball) increase in the gas tax (per gallon). Currently, people in the Panhandle pay for roads being built in Houston. CDA’s allow drivers in certain areas to pay for the roads in their area (voluntarily). There is always a freeway alternative if they choose not to pay tolls. Simple.
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paulburka Reply:
July 3rd, 2009 at 8:40 am
To 007 –
People in the Panhandle pay for roads being built in Houston? You’ve got it backwards. People in Houston are paying for roads being built in the Panhandle. The Panhandle provides a very small proportion of the gasoline tax revenue. The cities pay a far greater share. That’s one reason why members from rural areas opposed the local option gasoline tax. They don’t want the cities to have access to revenue that they don’t share in.
How can you argue that Perry is leading? Advocating a policy that has no public support is not leading. You can’t lead unless you have followers, and aside from the business community in North Texas, there are no followers on toll roads. They are risky investments, as we are finding out regarding Route 161, and they surrender public control over toll rates. Yes, people can always choose to drive on the freeway instead of the toll road, but the end game here is to provide a solution to the mobility problem, and telling people to drive on crowded freeways if they don’t like toll roads is not a solution to the mobility problem. From the start of this debate in the Rick Williamson days, Texas transportation policy has been held hostage to an anti-tax ideology that won’t even allow local areas to determine their own destiny. I don’t consider this leadership.
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Prince Royal says:
007, why would he pick THIS MOMENT to start doing what is right for Texas?
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OddJob says:
Paul, I don’t agree with 007.
I think many Texans are nervous about turning public roadway assets over to private entities, often times private entities not even based in the US. The “free market solution to transportation funding” is a radical paradigm shift which has failed to catch on in Texas, or anywhere else in the country, as mentioned in the excellent May 11 Barron’s article you cited.
People in the Panhandle should be more upset about paying higher homeowner insurance rates so that coastal insurance is more affordable for beach house owners. That likely takes a bigger bite out of that Panhandle person’s wallet than the national highway funding formula.
Moreover, in Houston they have the largest PUBLIC toll authority in the nation, Harris County Tollroad Authority. So, the Panhandle is paying less to Houston area because the have LOCAL tolls in Houston which result in the collected funds staying local, instead of being wired nightly to a fund in Brisbane Australia or Madrid.
In fact, the Harris County PUBLIC (read non-CDA) toll system was and is so successful, some of the same banks now pushing CDA deals attempted to buy it more than once.
By the way, also the “free alternatives” offered in most CDA deals allow the private toll operator to receive “non-compete” payments to off set the “free” alternatives that are built.
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Anonymous says:
Private interest, allegedly free market, so-called “solutions” are NOT the answer to our state’s or our country’s problems — be those problems in education, healthcare, retirement, or highways and other infrastructure. In the first place, unregulated capitalism does a pi$$-poor job of handling the problem. In the second place, the Texas Repubs version of “free market” is all about putting more $$$ into the hands that feed their campaign coffers. Who cares if there’s a non-compete agreement to provide excess profits to a campaign donor when the general public is paying the bill?? And you thought they were for keeping more money in your pocket because they are “against” raising the revenue (i.e., taxes) to pay for what should be viewed as NECESSARY government services!!?
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007 says:
Hmm. Private sector does far better in transportation, education (homeschoolers, etc.), healthcare, & retirement. That’s not an opinion…that’s measurable outcomes.
Private companies involved in transportation have capital risked in projects. If the projects fail, they fail. This free-market system demands that they complete quality projects in a timely manner in places where revenue will pay for the projects. It’s maximized efficiency.
Roads built exclusively by government have no accountability involved (google “road to nowhere”). I’m disappointed that so many folks don’t understand finance…
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Anonymous Reply:
July 2nd, 2009 at 6:10 pm
Nice church you belong to, 007 — the one that indoctrinates you and worships at the feet of supposedly unfettered capitalism — problem is that it ignores the ugliness of human selfishness.
Greed is the problem with the private sector — CEOs with obscene compensation packages, emphasis on short-term profits for their own benefit, and ignoring the effects of corporate behavior on anyone outside the inner circle as well as the environment.
The kinds of programs we’re talking about require long-term planning and solutions that last — someone with a conscience.
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Max Zorin says:
Dear 007: I find your blind faith in “free market” solutions amusing. I suggest you also google another “Free Market Solution” for healthcare in the state, one regarding a certain Accenture LLP. The contract was worth hundreds of millions of dollars to run call centers enrolling people in public assistance.
You will find that it was a complex contract with lots of moving parts that resulted in failure. The divorcelike process to get taxpayers off the hook has involved negotiating over money and assets tied to what started as a five-year, $899 million deal. Texas paid Accenture nearly $243 million.
The same “risk” backstop exists with private equity CDA deals for roads. The “private money” is often public DC taxdollars, recyled to states as “private upfront money” when in fact it was your own federal tax dollars… google TIFIA loans. The trick with private equity participation for toll roads is that to “build in the profit” you must raise toll rates higher than otherwise needed.
We disagree, but I admire your blind allegiance to an enticing fantasy where no teachers are needed for the playgrounds, cats sleep next to dogs, and private equity toll roads are “a great deal” for taxpayers (aka toll payers).
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windmill says:
Perry has never watered down his opinions to win a political race. He is willing and able to take on the toughest issues be left the chips fall. I heard him say once: “you will never when all your battles, but don’t be afraid try”
That is the reason K Bailout will not win. She has never placed herself out on the front line for any issue. She will never take the heat for a good policy or even her constituents. Do you even remember an impassioned speech in the Senate?
She’s more suited for a bridge tournament.
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paulburka Reply:
July 3rd, 2009 at 8:42 am
Hey, I play in bridge tournaments. You have to be plenty tough to win.
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windmill says:
sorry about those typos! This phone is hard to type on!
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Anonymous says:
Perry supporters are so funny…and blind to both their own shadows as well as Perry’s. He’s “never watered down his opinions to win a political race”?! Maybe so, if it’s because he hold two opinions that run completely counter to one another at the same time — one for his campaign contributors, the other for the average, uninformed Texas voter.
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McKinney says:
Oh yeah!! Don’t forget how great that there private sector did in H&HS. That privatization was awesome!! Tell me again the story about how the private sector fixed everything in those few months that they gave responsibilty back to the state.
And private prisons! Huge success! So successful we wouldn’t think of doing them again.
But of 007s examples, the most irresponsible was the suggestion that home schooling is a private sector market solution to public education. Home schooling is not a market. Home schooling is parents taking exclusive responsibility for their childrens education. Public education–when empowered by parent partners as dedicated at home school parents is wildly successful.
The comparable for the free market are your beloved vouchers have demonstrated NO definitive evidence that voucher kids perform any better than a control group. Why? Because parents must be partners, not consumers, for education to work. Private schools don’t perform better often because parents assume the school will fix their kids and that they need not worry about it.
But your passion for the free market is absolutely adorable in an ivory tower freshman in colllege sort of way!
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texun says:
I am really enjoying watching the Perryites beat up on K, another conservative. The no-line-untold strategy has worked for them before, so let’s assume that it will again. We’ll hear the bail-out allegations, stories about K denting crania with legal pads, about K and the investment bankers, about K and the satanic fedrul gummint, the usual stuff.
I suspect the’s a pretty good bridge player, something of a contrast to Governor Goodhair, who is challenged mentally by horse shoes and, apparently, by his cell phone and typing.
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anonymouse2 says:
>> ” … July 2nd, 2009 at 4:20 pm
Anonymous says:
Private interest, allegedly free market, so-called “solutions” are NOT the answer to our state’s or our country’s problems — be those problems in education, healthcare … ”
how rich, those statements. thank you, anon, for making them.
” … our education problems … ” — would those problems be with the state-supported, federally-indoctrinated and enforced public school system? AKA, why johnny can’t read? or, why most of you do not know how health care is financed? (but wait, there’s more, as the dead guy said.)
“…problems .. in healthcare …” let’s go there. how about the supreme single payer, universal system that’s been in place since the mid-60s: medicare: rationed care, reducing number of doctors who want to play the game, increasing costs to users (see medicare part D), solvency predicted by GAO in 2017. government controlled, government run. 100 per cent.
your basic flaw lies in your first statement which confuses “private interests” with “free market.” should you truly believe those are the same, you, unfortunately, are destined for a life of servitude to others rather than your own free will, judgment and spirit.
re-think.
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Anonymous Reply:
July 3rd, 2009 at 9:58 am
Re-read, Mouse. “Private interest, ALLEGEDLY free market.” Confusion yours.
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Harry Doghiney says:
When are you Repubs going to go Galt already?
Go now!
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Prince Royal says:
Mouse, there is no one solution to education challenges, but the reality is that we are educating more American youth better than at any point in the history of our country. But our demand has outpaced our improvements and been slowed by massive immigration of kids speaking different languages at different skill levels.
The reality is that no one–NO ONE–has ever attempted to do what we are trying to do in America. Homogeneous countries have a relatively easy go of education, but we are the first to try to educate ALL in this remarkable melting pot. The urbans need a lot of work and one size does not fit all (thus the need to specialized learning and charter options), but the needle is moving.
Public education in this country was created in states often in response to private education–the Masons or the Presbyterians (or some other group) wanted their children to have secular alternatives to Catholic private schools. Those private alternatives were then donated to the states to become the stewards of a public trust. In this instance, the market responded and established an American institution.
If you want to impact education with the free market, forget the student as the consumer and focus on the demand for quality teachers and leaders. The only true market force in education is the labor force. Find ways to recruit and retain great teachers and leaders, and you can often solve most of your other problems in a school or district.
Summarily dismissing public education as a failure is irresponsible. How ironic that in your plea for others to be educated, you failed to educate yourself about where we actually stand.
To paraphrase the old statement about democracy, it is one of the worst systems devised except for all the others. There is no silver bullet in public education–not in the free market and not at the local ISD, state, or federal level. There is a long way to go, but more progress has been made in reform over the past few decades. It is not enough, there is more to do, but dissing public education outright is not helpful.
Just sayin’.
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Cow Droppings Reply:
July 3rd, 2009 at 12:29 pm
Funny how D apologists mention the influx of immigrants in defending public education, but not when criticising Texas for health insurance rates, average income, etc.
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Emeyekaye says:
I probably won’t vote for Perry (unless I’m forced to) but he’s at least doing SOMETHING to address traffic.
When I’m on a toll road moving along, and I catch a glimpse of another snarled intersection that I missed, I am thankful that I had a choice other than to sit in traffic.
I have zoomed across Harris and Travis counties at rush hour… and I have sat for an hour waiting to cross one intersection in north Bexar County…
People who object to toll roads are not very smart, if I have to choose between THOSE people (do-nothings who think ignoring the problem is a solution) and Perry than Perry wins.
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Anonymous Reply:
July 3rd, 2009 at 7:58 am
I am not particularly in favor of toll roads, and am sort of flummoxed by conservatives who don’t think roads are one of the few things government ought to pay for. . . Gas tax, anybody?
Having said that, however, I have noticed that those who are most fervently opposed are not commuters. Frequently they are retired or activist moms who can either schedule their drive times around peak traffic or only have to mix in it occasionally.
I have yet to meet one person who commutes twice daily who opposes ANY solution to the urban messes. And why did Dell move their headquarters again?
Something, please!
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Tellnitlikeitis Reply:
July 3rd, 2009 at 12:50 pm
Emeyekaye …..
I have no problem with public toll roads that are built and financed by public authorities because my money is going to support public projects…
But why support private company toll roads? Why spend added money for their shareholders in far-away-places that don’t give a rats azz about Texas?
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John Johnson says:
Rick Perry and KBH suffer from the same disease that afflicts so many politicians. The longer they are in office, the tighter their ears slam shut. The will of the people is an afterthought.
It’s all about the money. Why else would Rick Perry continue to try and push CDA’s and tollroads down our throats? No one wants them but himself, Txdot and some large companies that, I think, Gulliani is hooked up with.
KBH doesn’t even talk to commonbreds. If you want an audience with her, or a real written response and not a canned one off of a computer, you had better preceed your gripe or request with a campaign contribution.
I like an underdog, so I’m pushing for Schieffer…just like I did Wendy Davis after Kim Brimer showed who he was in Austin to please.
Come on, Tom. Show the people who you really are.
Those of us here in the Metroplex know you; others don’t.
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Texas Democrat says:
Folks, Perry has won been tested and winning 5 consecutive statewide elections for a reason: he’s never lost ever including his 3 terms in the Texas House from 1985 to 1991, plus serving in the United States Air Force gives him street cred too.
KBH is acting like Hillary, thinking it’s her turn at the Governor’s Mansion when she’s been sitting on her A** for 16 years in the United States Senate like a Beyonce Knowles-lite DIVA, “Screw the GOP unity, it’s my turn to be in Austin.”
I’m sorry, she had her chance back in 2006 and backed out like a scarred rabbit, I’m voting for Perry again thanks and look forward to seeing him make history as our state’s first 14-year governor until January 20, 2015 (3rd full term would start on January 18, 2011).
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Texas Democrat says:
KBH: DIVA.
Perry: despite his problems, at least he’s been working his butt off making sure Texas doesn’t end up like California in terms of economics and business investments with more folks moving to Texas each and everyday.
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paulburka Reply:
July 3rd, 2009 at 5:19 pm
Texas has fared well fiscally on Perry’s watch, and he will try to take credit for it. Perry has brought some businesses to Texas through the Enterprise Fund, though we learned from the House Appropriations hearings that some of the new arrivals have had trouble meeting their promised job levels. I don’t want to dismiss the governor’s emphasis on economic development; I think it has brought some good results. But the truth is that Texas was a low-tax, low-service state with a good “bidness” climate before Perry was governor, and it will be one after Perry is governor. Much of the fiscal discipline comes from the Legislature, not from the governor’s office and from our pay-as-you-go system. Let me be clear that I am not criticizing Perry, just saying that the Texas economy has benefited from things that have nothing to do with politics: most of all, the presence of oil and gas in abundance and the industrial development that has followed the exploitation of these natural resources; also an entrepreurial climate that goes back to Stephen F. Austin and a natural climate that is has made Texas a center for military posts; and let us not overlook three giant population centers that attract the best and the brightest. In addition to all of these natural advantages — including seaports — we can include political factors such as weak unions and the absence of a personal income tax. All of these factors were in place before Rick Perry became governor. I don’t blame him for trying to claim credit for it, but Texas is what it is, and, with the exception of John Connally, politicians have had little to do with the business climate. I mean, it doesn’t take a lot of courage to oppose an income tax.
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J says:
To say CDA’s and tollroads aren’t popular is ridiculous. Because a few idiots with an internet connection and some weak kneed elected officials don’t like them? Have people stopped driving on toll roads? People vote with their wallet and their toll tag and despite a recession they are still using toll roads. Even the ones built in Austin with an evil CDA!
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John Garza says:
To say CDA’s and tollroads are upopular is ridicuolous. Because a few luddites with an internet connection and some weak kneed elected officials don’t like them?
Have people stopped driving on them? People vote with their wallet and their toll tag. I bet their are more toll tags in this state than there are voters in the last gubinatorial election. Despite the recession drivers are still using them. Even the ones in Austin that were built with an evil CDA! OMG!!
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paulburka Reply:
July 3rd, 2009 at 4:56 pm
In my post on this topic I cited a story from Barron’s, May 11, that says that both toll revenues and toll traffic is down. NTTA’s problems with Route 161 are another example.
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American Stewards says:
Those opposing the TTC have crossed one big hurdle in the defeat of the CDA’s, but a full defeat of the project will have to come through the rejection of the Environmental Studies by the Federal Highway Administration. If the Tier One study is approved, then the door is wide open for more decietful scams to launder money from Texans. Mayor Jones of Temple informed the Eeastern Central Commission that he would be pushing his high speed rail T-Bone project using the TTC environmental study, even though this study is grosely inadequate.
Five unpaid Mayors and their School Districts in Central Texas filed a 27 page challenge to this study last month requesting that the study be rejected on many grounds, one of which was the CDA’s were not authorized. The FHA’s response to the Commission should be interesting. The petition can be found at http://www.stewards.us.
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Blue babe says:
Paul, you are so funny. There are many states who have efficient , rich legacies and are now bankrupt with high taxes and skyrocketing entitlements. How do you think that happened? It happens when leaders are not constantly vigilant and bold about making tough decisions. No – there is no fairy dust in Texas to keep things just like the Conally years. You sometimes live in the clouds.
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Kenneth D. Franks says:
I don’t care if Houston has Belt-Way 8, as it was called, or the Sam Houston Parkway as much of the loop is called now. I have a G.P.S. unit in my car and I can put in no toll roads and go anywhere without getting on one.
If you want to pay every two or three miles or buy your easy pass go for it but the rest of the state opposes toll roads, and it could cost Rick Perry his job by some candidate. The only problem is no major candidate has yet emerged and that is a shame.
I wish Tom Schieffier would start campaigning seriously. Kay isn’t challenging Perry on this or hardly anything. What’s the deal here?
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John Garza says:
Sorry for the double post earlier. Paul, I would bet that any decline in toll road usage in Texas tracks to the overal decline in driving as documented by USDOT. Driving, and therefore gas tax revenues, have declined the last couple of years with the high gas prices of 2008 and the recession. I would bet that they are pretty similar and dont reflect on the particular feelings of tollroads in Texas.
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Kenneth D. Franks says:
Thousands of people avoiding toll roads in protest is also happening. K.D.F
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