Houston Chronicle

Toll Roads or No Roads in Texas

Moratorium on public-private partnerships would threaten mobility, economy, quality of life

John Kerry walked away from the 2004 presidential election saying he'd never let himself be "swift-boated" again. Kerry's failure to respond to television ads featuring false claims about his military service, where all he did was earn a Silver Star, Bronze Star and three Purple Hearts, helped seal his fate.

Right now, it looks like Texas Gov. Rick Perry should take note. Perry's toll road plans are in the midst of being swift-boated — by his own fellow Texas Republicans no less.

There is so much misinformation being spewed in the halls of Austin that years of Texas' work and billions in private capital for much-needed highway projects could be lost as state lawmakers push a two-year moratorium on public-private partnerships.

The freeze would kill many proposed projects and send billions off to the 20 other states that have passed public-private partnership laws so they too can tap into private capital.

It seems many of the state Texas legislators who want to delay toll roads until 2009, at the earliest, have forgotten why the governor, Legislature and Texas Transportation Commission agreed to allow state and local agencies to partner with the private sector in the first place: TxDOT The Texas Department of Transportation is short $86 billion it needs to meet its congestion reduction goals as the state Texas adds another 13 million residents over the next two decades.

State lawmakers could raise the gas tax, which is supposed to pay for roads. But because of inflation and more fuel efficient vehicles, the 20 cents per gallon tax isn't even enough to maintain existing roads, let alone build needed new highways. Lawmakers haven't raised the gas tax since 1991 and show no signs of wanting to push the massive tax increase that would be needed to produce $86 billion.

Yet, Perry's Republican comrades want to freeze all new road projects for two years.

Sen. Robert Nichols, R-Jacksonville, was a staunch supporter of toll roads as he served on the Texas Transportation Commission from 1997 to 2006. Now a legislator, Nichols has inexplicably flipflopped and called for a two-year ban because, "Converting existing roads to toll roads would break a promise to taxpayers. No one should have to worry that the roads they drive on today will be tolled tomorrow."

But that's a contrived, strawman argument. The senator knows, and the facts show, there isn't a single project planned that would turn existing highways into toll roads. And no one is calling for that to happen.

State Sen. Jane Nelson, R-Lewisville, joined the fracas by claiming private toll road operators "have unlimited authority to raise tolls."

In reality, the contracts signed by the state explicitly limit toll increases, with the amount allowed usually tied to a cost-of-living index.

Don't get me wrong, there will be tolls and they will likely go up. Theses private companies are paying Texas huge sums of money up front, spending billions in construction costs to build highways the state cannot afford to build on its own, and agreeing to maintain and expand the roads as necessary over the next 50 years.

In return, they are allowed to charge tolls to make their money back (in some cases, though, the state has even negotiated to receive a share of each year's profits).

Of course, Sen. Nelson also worries about "turning over highway construction to a foreign company."

Our foreign-made shoes step on the gas in our foreign-made cars (many with American brand names) that run on foreign-produced fuel so that we can go home and surf the Internet on computers filled with foreign-made parts. But we don't want a foreign-based company investing in our roads?

In a recent Wall Street Journal column, Reason Foundation Founder Robert Poole wrote: "a Spanish company sinking $7 billion into new highways in Texas, meanwhile creating thousands of U.S. jobs, is the very antithesis of protectionists' dreaded outsourcing."

Public-private partnerships can be done well or badly. State lawmakers are obligated to make sure the contracts they sign protect taxpayers from steep toll increases, allow the state to build the roads in local and regional long-range plans, and clearly state what the private companies are required to do to maintain and expand the roads.

They can do all of those things without endangering Texas' quality of life and the state's economy by derailing the toll road process for two years. Toll roads certainly beat the alternative: no roads.

Samuel Staley is Research Fellow





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