There is a high stakes game of Texas Hold ’em poker going on at the State Capitol. Some of the players want to ban privatized toll roads for two years. Some want to kill such toll roads altogether. There are veto threats from the Governor and perhaps a special session on transportation in the legislature’s future.
I don’t know who will win, but when politics and gamesmanship overtake the needs of commuters in setting transportation policy, it’s easy to see who the loser is: Texas drivers.
You can debate the amount of money needed to alleviate traffic congestion, but you can’t dispute that the state and its major urban areas need more roads than they can afford.
Gas taxes aren’t providing enough to maintain existing roads, let alone build new ones. So what’s the state legislature’s plan? The House just passed a bill that would completely eliminate the gas tax for the summer, pilfering $700 million from the state’s transportation coffers. That should help build more roads!
And then there’s the legislature’s “do as I say, not as I do” approach to toll roads. The House recently approved a 30-month moratorium on privately built toll roads. The vote was an astounding 139 to 1. A vote margin like that sends a clear signal: Texas doesn’t need the private sector’s money to build our roads because we have other solutions ready to go.
So what is the legislature’s solution: toll roads. Yes, the same toll roads they just banned.
Politicians in Dallas-Ft. Worth wanted to make sure the toll roads the private sector is planning to build for them can move ahead, so they sliced out a special exemption in the moratorium allowing new toll roads. San Antonio did the same. So did El Paso. All the exemptions leave the moratorium looking more like a piece of Swiss cheese than a piece of well thought out policy.
Instead of pandering to voters with gas tax holidays and toll road bans, state leaders should be tweaking the public-private partnership laws and contracts to ensure that they address taxpayers’ concerns about toll roads.
Taxpayers worry that by tapping the private sector to build and operate roads that Texas is “giving away” critical infrastructure for 50 or more years. Texas isn’t giving anything away. It owns the roads. And the lease agreements can be as long, or short, as taxpayers want. In Australia, many toll agreements last just 35 years, not much longer than today’s existing long-range plans. The tradeoff for shorter agreements is the state receives much less cash upfront in the deal.
But why should these toll companies get rich off Texas drivers at all?
There’s no guarantee they’ll get rich. The private company is assuming all of the financial risk in building multi-billion dollar roads the state is struggling to find financing for. If traffic levels don’t meet expectations, the companies, not taxpayers, lose money. But if the government is convinced the toll road will be profitable, it can and should negotiate to share future profits in exchange for smaller upfront payments.
Other critics say we shouldn’t give “control” of our roads to foreign companies. The leading toll road companies may be foreign, but they can’t take the roads back to Spain or Australia. They are building and operating immovable infrastructure in Texas, spending billions in Texas and creating jobs in Texas.
Another common concern is that the government won’t be able to build needed roads anywhere near the toll roads. But that isn’t the case. Competition clauses do not prevent any new roads from being built. The contracts allow all roads in existing long-range plans, including frontage roads right alongside the new toll roads. If a major highway or road not in those long-range plans is needed at a later date, it can be built too. It is up to the private company operating the toll road to prove that a new government-built road is causing a direct loss of revenue. Then, and only then, will the state and company work out a financial compensation agreement.
Toll roads aren’t the only answer to Texas’ traffic jams; they are just one tool in the box. Transportation officials should choose the tool that is best for each individual job. But don’t throw away your tools. You don’t ban the hammer or wrench when you know you have a lot of projects to build.