The Trans-Texas Corridor is Deader than a Doornail
First, here is Tx-DOT’s official release following the meeting of the Texas Transportation Commission last Thursday, which I attended:
Texas Transportation Commission Affirms Toll Road Building Principles
AUSTIN, Texas, May 29 — The Texas Transportation Commission today adopted guiding principles and policies that will govern the development, construction and operation of toll road projects on the state highway system and the Trans-Texas Corridor.
The Commission’s unanimous vote reaffirms policies and the requirements of state law regarding toll projects, particularly involving the use of comprehensive development agreements (CDA).
“The Commission’s action today reflects the comments we have received from Texas drivers, legislators and members of our citizen advisory committees,” said Commission Chair Deirdre Delisi. “Texans deserve a clear, straightforward explanation of what we are doing to solve our transportation challenges and how we are doing it.”
The Texas Transportation Commission is a five-member board appointed by the Governor to oversee the Texas Department of Transportation (TxDOT).
The Commission reaffirmed its commitment to meet or exceed the requirements of state law on five key issues:
– All state highway facilities, including the Trans-Texas Corridor, will
be completely owned by the State of Texas at all times.
– All Comprehensive Development Agreements will include provisions that allow TxDOT to purchase or “buy back” the interest of a private developer in a CDA at any time if buying back the project would be in the best financial interest of the state.
– The Texas Transportation Commission shall approve, in a public meeting, the initial toll rates charged for the use of a toll project on the state highway system and the methodology for increasing the amount of tolls. All rate-setting actions will come after consultation with
appropriate local metropolitan planning organizations.
– Only new lanes added to an existing highway will be tolled, and there will be no reduction in the number of non-tolled lanes that exist today.
– Comprehensive development agreements will not include “non-compete” clauses that would prohibit improvements to existing roadways. The Department and any governmental entity can
construct, reconstruct, expand, rehabilitate or maintain any roadway that is near or intersects with any roadway under the CDA.
In recognition of the Texas Legislature’s commitment to protecting landowners’ property rights and in following the department’s long-standing practice with other transportation projects, the commission affirmed two additional principles:
– TxDOT will always consider the use of existing right of way that satisfies the purpose and need of the project as a possible project location when conducting environmental studies.
– To the extent practical, TxDOT shall plan and design facilities so that a landowner’s property is not severed into two or more separate tracts and the original shape of the property is preserved.
“These principles will help guide TxDOT as we work to improve our state’s traffic congestion and air quality problems,” said Delisi. “The Texas Legislature shares our commitment to improving highway safety and creating economic opportunity, and they expect us to meet these goals in keeping with our state’s tradition of protecting the rights of property
owners.”
Delisi said that the Trans-Texas Corridor implementation plan “Crossroads of the Americas,” should be updated to reflect changes in the state’s transportation challenges since it was first released in June of 2002.
“As we work to develop important projects like a parallel corridor to I-35 and the long-awaited I-69, we will work toward meeting our goals with these important principles in mind,” she said.
When I said in the headline that the Corridor is dead, what I mean is that the grandiose plan conceived by Ric Williamson — a network of privatized toll roads criss-crossing Texas with a 1,200-foot right of way, and funded by upfront payments — is not going to reach fruition. I mean that Tx-DOT and Governor Perry have capitulated to public and legislative opposition. I mean that Interstate 69 and TTC-35 will not be built as originally planned. But they will be built and they will be toll roads. In short, Tx-DOT and Delisi appear to be saying that Tx-DOT will follow a traditional road-building policy rather than Williamson’s vision, which envisioned long-term private ownership and control of roadways.
Why did this happen?
I think the answer is obvious. A year ago, Governor Perry was resisting legislative efforts to rein in Tx-DOT. Now he is capitulating about the same things he was fighting a year ago. What is the difference between then and now? He decided that he wanted to seek reelection. I know that he was advised that he had to give up the privatization model if he wanted to run again. Neither the public nor the Legislature has any confidence in it.
There is another reason. The political clout in transportation issues lies with the business communities in Houston and Dallas, not with Tx-DOT or the governor. Local leaders in the two regions have insisted that their regional tolling authorities be allowed to build the roads (rather than private interests) and that the revenue generated by new toll roads in their areas must stay in their areas. Houston and the Metroplex have seen the gasoline tax revenue they generate be distributed all over the state, and they weren’t going to let it happen to their toll revenue.
The last–or let us hope it was the last–great struggle over “primacy” (the right of local toll authorities to undertake projects without the approval but with the cooperation of TxDOT) occurred over Highways 121 and 161 in Dallas. At first, TxDOT prohibited the North Texas Tollway Authority from bidding to construct and operate 121 and accepted a private-sector bid from Cintra instead. The effect was that the upfront payment would go to TxDOT and the long-term revenue would go to Cintra. The Dallas-Fort Worth region was not assured of getting any of it. That was unacceptable to the local interests, and eventually TxDOT melted under the political heat: It allowed NTTA to build the road. Another battle ensued over 161 with the same result. TxDOT had become wedded to a political posture that was unsustainable: It was adversarial to the local toll authorities when it should have been partners.
A delegation from Dallas-Fort Worth, including the mayors of both cities, showed up in force at the commission hearing to air their concerns about TxDOT. Their chief complaint was about the process for market valuation of toll roads. The governor’s office insisted that it had to be part of the toll road legislation passed at the end of the 2007 session. It was one last attempt to tip the scales in favor of the private sector against the local toll authorities. TxDOT wanted to assure that the local toll agencies would have to match the market value of the road. The testimony established that the procedure for arriving at that value was highly contentious, requiring 63 meetings and causing a considerable loss of money in construction delays. Even Ted Houghton, the last of the true believers on the commission (excluding, perhaps, Delisi), conceded that the process was broken. It is unlikely to survive.
Can Delisi rehabilitate TxDOT as a kindler, gentler agency? That will take some doing. The agency has done terrible damage to its own reputation and credibility. It has been arrogant, secretive, and incompetent. It has played fast and loose with numbers, such as the estimated cost of needed transportation projects and the increase in the gasoline tax necessary to pay for it (not that an increase is likely). It can’t account for a billion dollars of its money. It has resisted legislative oversight. TxDOT’s press release was a start, but don’t read too much into it. Most of the “changes” the agency promised were already current law.
This did not prevent Wayne Christian of the House conservative coalition from attempting to claim credit for the policies TxDOT affirmed in its press release. The group issued a release of its own saying in which Christian, [announced] “an agreement on vital issues regarding the Trans-Texas Corridor.” And what was that “agreement?” [T]he Transportation Commission has formally agreed to follow [various] statutory requirements.” In other words, they agreed to follow the law that they had already taken an oath to uphold.
More trenchantly, State Representative Lois Kolkhorst of Brenham, an outspoken critic of TxDOT and the Corridor, said of the press release, “[It] does not offer any real reforms or serious changes from the current atmosphere. It was merely a repackaging of familiar statements that are already in state law. I’m glad to see that the new TxDOT leadership is reaching out, but it’s time to roll up our sleeves and talk about real reforms to address the public outrage over the Trans-Texas Corridor.” Again, I think that what will force the reforms Kolkhorst seeks is a lack of money. The only way I-69 will be built is if it follows the existing right-of-way of U.S. 59 and, probably, the Grand Parkway, rather than cutting a swath through rural Texas. And the same is true of TTC-35, which may end up as toll lanes added to I-35.
Kolkhorst’s concerns notwithstanding, I think that the die has been cast, and the local toll authorities have won. The Corridor (which today refers to TTC-35, the relief route for Interstate 35, and I-69) is dead not for lack of will but for lack of revenue. The beast has been starved. With the money staying in the Metroplex and Houston, where the congestion is, TxDOT will not have the funds to pave rural Texas with toll roads, unless the traffic justifies it, and that is not likely to occur for a lot longer than Kolkhorst is going to be around the Legislature–or I am, for that matter.
I have to give Delisi good marks for her first meeting. Not only did she say the right things, but she also seconded a motion to approve projects in Austin, the home of state senator Kirk Watson, who could have killed her appointment by invoking senatorial courtesy. Watson was criticized for allowing the appointment to go through, but his opinion was that Delisi was smart, and that if he busted her, the next person might not be, and he’d rather have a smart Perry loyalist as chairman than a puppet. I didn’t think Watson was right at the time, but after one meeting, at least, I think he was right after all.
Sal "The Muckraker" Costello says:
Paul,
How they finance the TTC doesn’t matter at all to the folks who will still loose their land.
I’ll suggest this is the first layer of the onion to be peeled off, with many more layers to go during this year of Sunset Review.
And, that snake Sen. Kirk Watson will get his for ignoring the public and tolling Austin freeways with our tax dollars.
Sal “The Muckraker” Costello
http://salcostello.blogspot.com/
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Brown Bess says:
The most depressing piece of analysis from this lengthy post? Gov. Goodhair is really serious about running again.
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Anonymous says:
As I noted at the time of Williamson’s death, his demise was–and remains–a tremendous blessing to Texas.
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Tye says:
BOTH Delisi and Watson are absolutely sickening!! She helped approve MORE toll roads for Austin and this is a good thing?!?! Hello??? A mid-sized city of a mere 700,000 people (supposedly 1.2 million in metro area) with 5 toll roads and they want 5 more?!?!?!? Are these people insane or what?!?!?!? I dream of the day when Perry is NO longer in office, along with all of his corrupt henchmen: Watson, Krusee, Heiligenstein, Bob Daigh, etc. etc.
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paulburka says:
To Tye:
Opposing toll roads in Austin is a losing battle. There isn’t enough revenue–state or federal–to build the roads that are necessary. 290 east to Houston is terrible. 290 west to Dripping Springs is worse. The only way to build them is by tolling. I don’t like the Austin approach of tolling segments of roads that essentially hold commuters hostage, but without these roads, mobility in Austin is going to be nonexistent. Just think what it is going to be like in a few years when everything along 130 is developed and we have another Williamson County worth of population on the east. The traffic lights at 130 (on 71 and 290) are terrible bottlenecks; there have to be interchanges. The interchange at I-35 and 71 has to be completed. It’s ridiculous how long it is taking. Toll roads are the only way to achieve the infrastructure we need. There will be plenty to argue about after the roads are built–the cost of the tolls, whether the tolls will be lifted after the roads are paid for–but let’s get the roads built first. It’s absurd that there is no freeway that connects the capital city with the largest city in the state.
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Hank says:
Question to Paul: How do we lack the funds to build roads without the toll-taxing roads? What will our “toll-taxes” revenue go towards after the roads are paid for? Are foreign companies involved at any level?
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B/CS Observer says:
Paul, I will be hinest- the idea of tolled lanes alongside free lanes on major highways is a nonstarter.
I know they are going to try High Occupancy Toll lanes on I-10 in Houston, but I think they will be converted back to regular HOV lanes within 5 years. People don’t like to see other people pay to travel in lanes right next to theirs on the same high way and go a lot faster. Plus you have the problem that on I-35 there are too many stretches where the road cannot be expanded.
I-69 was never really going to be built across Grimes County. TXDoT floated that route because they had to provide one in the plan and to get Houston to toe the line on letting TTC-69 follow the Grand Parkway. The Feds won’t accept a plan that does not have an alternative route studied. And besides, the town along US 59 WANT I-69, mainly because they aren’t trapped in 1985 like the people between Austin and the Metroplex on I-35.
Freight is a major driver of what economic activity that remains in that area. Freight is also like water- it flows along the path of least resistance. When the resistance on I-35 gets too great, the freight will flow elsewhere, like I-69.
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M. Raborn says:
Mr. Berka’s declaration that TTC is a dead issue seems naive to me. I am much more skeptical.
Just consider the first and second statements of affirmation of their intentions.
1. All state highway facilities, including the Trans-Texas Corridor, will
be completely owned by the State of Texas at all times.
2. All Comprehensive Development Agreements will include provisions that allow TxDOT to purchase or “buy back” the interest of a private developer in a CDA at any time if buying back the project would be in the best financial interest of the state.
If ALL highway facilities including the Trans-Texas Corridor will be completely owned by the State of Texas at ALL times, then “what” and from “whom” would the State need a “buy back provision?” This all seems like double talk aimed to confuse the public and hide the real intent.
Mr. Berka’s later comment that “there just isn’t enough -revenue state or Federal-to build the necessary roads” is exactly what the Governor and his Commission want us all to believe. Then they can justify whatever they do, because there was NO ALTERNATIVE. There is always an alternative, like cutting some of the “give away” programs that those in office use to win votes. There are so many programs that are in place, just to serve some special interest group. Indeed, the idea of paying to drive faster certainly will benifit the wealthy more than the ordinary citizen. Shouldn’t at least our transportation system have equal access for all citizens?
Thanks for all you do. Margie
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RogerB says:
While I do think that Paul Burka’s analysis of TxDOT’s political status is very insightful, I think it ignores the future impact of energy economics on what is likely to happen in the future.
The two factors standing in the way of the expansion of toll roads, as a magic bullet to solving TxDOT’s emerging financial problems that they imagined when they developed the TTC, are the end of both cheap oil and easy credit. Plus federal cutbacks and severe road cost inflation.
In Austin, the CTRMA has been forced to bring in JP Morgan as financing gurus, but the funding is already very shaky. Goldman Sachs is predicting $200 a barrel oil within a few years ($6+ a gallon gas).
Thus the CTRMA is proposing to use “high yield” bond financing for the toll roads. And since they can’t get affordable bond insurance, they have suggested using part of the $5 billion loan the voters approved the Leg to use recently to insure the junk bonds.
This financing difficulty isn’t counting bagging a federal TIFIA loan where they need to get the law changed and which has to be paid back.
Bottom line: Trying to ignore the changes in energy economics being forced by the end of cheap oil is a prescription for guaranteed toll road bond default.
The big questions in my mind is where they intend to find lenders stupid enough to lend long term for toll roads to serve the historically profitable suburban sprawl growth trends driving the toll road plans, and who will eventually takes the hit if they do.
– Roger
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cow droppings says:
The highway fairy is dead people. There are no free roads — just taxways and tollways. The difference is tollways get built a lot faster because the money is available up front. If you think we can “scrub the budget” as Tony Sanchez said to find enough funding for roads then you not only believe in the road fairy, but clearly santa claus too. So, let’s say TxDOT over-exaggerated the road needs, and instead of there being $80 billion in unfunded needs there is ONLY $50 billion: we don’t have $50 billion sitting in the government couch cushions.
One writer is correct that you can’t expand I-35 to meet the needs of growth: purchasing right-a-way next to I-35 is much more expensive than purchasing right-a-way for a new road, plus do you know how many bridges would have to be torn down and rebuilt because the current footprint doesn’t allow easy expansion? And then, do you want to bottleneck them in austin, or tear down either the erwin center or disch-faulk, as williamson liked to say?
Oh God, he just quoted williamson, let’s go into red herring convulsions.
People, wake up: there are no free roads, the federal share of funding is on the decline, you can’t raise the gas tax at all in this economic and political climate, let alone what it would take to fund road needs. Some of you are starting to sound like a bunch of Austin no-growthers who said in the 70′s, “if we don’t built it, they won’t come.” Well, that has worked out well hasn’t it.
Now local leaders approving toll roads are being blamed even thought the problem was the mentality of leaders a generation ago.
If you don’t leverage private equity up front — or heck, even toll authority equity (though I am suspicious they will deliver in dallas what they promise) — our infrastructure will sadly deteriorate. And since when do Republicans at least oppose turning to the private sector for solutions? Remember One Tough Monogram’s yellow pages test? If the private sector can do it better, they should do it instead of government. Or is it this xenophobic attitude against foreign companies? So, are you going to oppose Ericsson or Toyota creating jobs for americans in Texas too?
This whole debate has been driven by paranoia, while the long-term economic interests are ignored. If we don’t build the infrastructure, future generations will pay for it. Go ahead and tell them that the NIMBY’s were too powerful for us to do the right thing.
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Anon says:
But Cow Droppings, if we go to war with Spain they’ll come take our highways back–what are we going to do then, huh? Huh?
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buck says:
It’s not so much NIMBY as it is NWMM — Not With My Money.
Dallas and Houston are not going to pay tolls to fund highways for cattle trucks in rural Texas anymore.
If there are toll roads in Dallas or Houston, the money is going to stay in those cities. The cities have always gotten the shaft in highway money, and it’s not going to happen again.
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I Heart Cow Droppings says:
“One Tough Monogram”….that is so funny it should be on ITP. Nice one CD.
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Brown Bess says:
Let’s talk about that “infrastructure.” Where’s the money for 21st century mass transit instead of more mid-20th Century roads that will only make all the current problems worse?
New transportation plans have to include other options for residents than just adding 5 or 10 more lanes to every exiting interstate. Of all the crazy ass TTC ideas, having rail corridors follow existing interstates was a good one. And once they get to the cities, they should hook up with rail so that you can go from your home in The Heights to the hotel in Arlington without needing to get in any four wheel vehicles.
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L. A. says:
As someone with land in the TTC’s path, one of the things that irks me the most is that N. Texas leaders begged Perry and TxDOT to not bypass the Dallas-Ft. Worth Metrolplex by keeping the TTC east of Texas. Part of our traffic troubles are because officials try to cram traffic (and they equate that with money and tourists) through their cities. News Flash: NO ONE will zip on and off of a 10-lane high-speek tollroad to go buy Pecan Logs at Stuckeys like they did in the 1960′s. Bell County (central Texas), for example, could only have 1 or 2 exits. I don’t believe claims that TxDOT is out of money when I hear that they are going to start “advertising” and pushing the TTC with $9 million. The first thing they need to do is quit letting the legislature “borrow” $3 Billion from the gas tax revenue for things other than roads. If you want to promote corporate sponsorship, let corporations adopt a roadway and then allow them to advertise. The Transcorridor is a 500,000 acre Land Grab and it makes me sick to think that my grandfather had two cotton gins and farmed this great land only to be taken by a hair-brained private development scheme by Rick Perry. The TTC belongs in the dung-pile with the SuperCollidor and Bullet Train projects.
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