Out of Control Policy Blog

Sen. Hutchison's Texas Transportation Two-Step

As I discussed before in the context of the last gubernatorial election in Indiana, playing politics with infrastructure privatization—generally in the form of a challenger's populist opposition to an incumbent's privatization initiatives, while offering no realistic alternative—is unlikely to be a fruitful path to success. The gubernatorial campaign of Texas Senator Kay Bailey Hutchison may learn this lesson the hard way.

A central focus of Hutchison's campaign is opposition to Gov. Rick Perry's efforts to advance privately-financed transportation projects, a cynical attempt to tap the angst of a vocal minority of Texas toll road opponents. Perry recognized soon upon taking office that Texas was running out of traditional tax-and-grant funding to build the roads needed to keep up with the state's rapid growth, so he set out to develop a number of creative approaches to closing the financing gap, including toll road public-private partnerships (PPPs), more local transportation financing options, etc. The paradigm shift was too much, too fast for the legislature, who started taking some of the best and most necessary financing tools—most notably PPP toll road concessions—off the table, at least temporarily.

Despite her opposition to Perry's transportation policies, Hutchison has not offered anything remotely substantive regarding her own plans to deal with the entirety of the state's massive funding crunch, instead relying on yet-undiscovered efficiencies and savings that won't come close to closing the gap. In a puzzling tiptoe act, while she bashes and misrepresents Perry's pro-privatization transportation policies with one hand, with the other she claims that she would also be open to toll concessions, just not as much. She rants against foreign toll road investors in her campaign ads, while seemingly failing to recognize that an international consortium—joined by their homegrown equity partner, the Dallas Police & Fire Pension Fund—are investing in two multi-billion dollar, congestion-busting highway megaprojects in the Metroplex, Hutchison's home turf. These are projects that the state would have not otherwise been able to afford without private financing.

Dallas Morning News editorial writer Rodger Jones notes these contradictions in a blog post yesterday looking at the Hutchison campaign's transportation red herrings (emphasis mine):

Kay Bailey Hutchison's new anti-Rick Perry, anti-TTC television spot uses all the buzzwords like "land grab," roads that are "already paid for," and allowing "a foreign company" to collect tolls from us.

Does this mean that, were she elected governor, foreign capital would be unwelcome to do business building Texas toll roads?

She better be careful in defining terms. Two massive highway rebuilding projects are going forward in North Texas with those nasty Spaniards as partners. It's hard to see how these projects would happen aside from private capital, given the funding picture in Texas. And the private companies interested in this stuff are from from abroad.

Would Hutchison have tried to block these projects, since they involve foreign money, rebuilding roads that are now free, and adding toll lanes? (I'll send that question over to her campaign.)

Hutchison has been beating her anti-foreigner, nativist drum for months, since her campaign coming-out party on Aug. 17. Her highway mantra then was:

    It is time to return to our tradition of free, quality highways and roads.

Actually, that's only kind of what she meant. Last week she made clear that public-private partnerships would be OK for building toll roads, but she suggested that, under Perry, they are running rampant and need to be reined in.

Actually, there are only three. And I have no doubt that many local drivers would invite more, if that could help them get to work or home in a reasonable time.

Brad Watson at WFAA-FM catches another one:

However, the ad takes a distorted turn. Hutchison's ad doesn't use narration, just a TxDOT changeable message sign that states: "This is a free road. For now. Rick Perry wants it to be a toll road. The road your taxes already paid for." But, that's a distortion.

In 2003, Perry certainly wanted TxDOT to have the power to convert free roads to toll roads and signed a bill allowing that. But, despite Perry's strong support for toll roads, there was such a backlash by the public and landowners that by 2005 he backed off.

He signed a second bill that would allow the state to switch a free road to a toll road only if voters in that county approve. The state and Perry can't do anything without voters going along.

Myths and distortions are no substitute for a real transportation policy designed to deal with the massive transportation funding crunch Texas is facing. Unfortunately for Hutchison's campaign, the best transportation policy agenda in Texas is the one that's already been advanced by her primary opponent, Gov. Perry.

Perry's former transportation chief, the late Ric Williamson, detailed the administration's early and laborious process of identifying, developing and implementing a variety of innovative transportation finance options in a 2008 Reason Foundation interview, which in my estimation should be required reading for transportation officials everywhere. They saw a looming transportation crisis and set out on a very rational course to solve it, and an agressive one at that.

For that, Perry and TXDOT have been beaten and battered—all for trying to be proactive at solving a crisis. You'd think that sort of thing would be rewarded in government, given the regular routine of policymakers either ignoring the problem or promising the moon and delivering nothing. Not in Texas, apparently.

There's no such thing as a "free" road...simple as that. Having served on Capitol Hill for years where the national transportation funding crisis is very well known, Hutchison should know that better than anyone. Recognizing the depth of the crisis and the threat to U.S. economic competitiveness, the U.S. Congress even chartered two national commissions to help chart a new path forward on transportation policy and financing.

Hence, it's incredibly disingenuous for the Senator to base her transportation agenda on an unattainable goal—"return to our tradition of free, quality highways and roads"—that will never possibly be achieved (unless she's willing to raise the current gas tax by multiples, a political loser). That "traditional" tax-based, government-monopoly-based system has run out of gas and is not coming back, which is why policymakers at all levels of government are frantically exploring new financing innovations, like PPP toll roads. Promising a return to the glory days of Texas tax-road building only promotes false hope and makes the inevitable reality check that much more difficult to swallow.

» Reason Foundation's Annual Privatization Report 2009
» Reason Foundation's Transportation Research and Commentary

Leonard Gilroy is Director of Government Reform


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