Terri Hall



LaHood: If you build it, they will come


It doesn’t take long to size-up a gathering of transportation lobbyists hosted by the U.S. Secretary of Transportation, Ray LaHood, when 99% of the feedback at a supposed “town hall” ran to the mic to ask for their industry’s piece of the taxpayer pie.

Scarcely a handful of taxpayer advocates dotted the invite-only crowd at the George R. Brown Convention Center in Houston May 5, and none were happy with what they heard. The purpose of the gathering was supposed to be to solicit feedback on the next federal highway bill. The last one, called SAFETEA-LU, was a disaster for taxpayers.

Remember the bridge to nowhere? How ’bout the 6,000+ earmarks for congressional pet projects that had little or no relevance to the federal highway system? What about the strings it attached to our gas taxes that hold our money hostage for “enhancements” like landscaping and free WI-FI at rest stops? Worse still, are the programs in SAFETEA-LU that use “innovative financing” to sell America’s highways to foreign companies in sweetheart deals (called public private partnerships or PPPs) propped-up with low interest, taxpayer-backed loans (TIFIA loans and private activity bonds or PABs). It’s public money for private profits.

But the majority of the invited speakers, as well as LaHood, advocated PPPs. During one of the panel discussions, the USDOT’s Chief Financial Officer, Chris Bertram, actually had the audacity to claim the feds don’t push innovative financing (what are toll credits, TIFIA loans, and PABs if not federal incentives for innovative financing?), and then proceeded to say how PPPs need to stay part of the mix. So much for a “listening session.”

Bertram also attempted to defend the bankruptcy of the San Diego PPP toll road, the first to receive a federal TIFIA loan, saying it had little to do with the lack of traffic to pay for the debt, and was a result of contractors arguing over cost of the road. The tollway had been open to traffic for over two years, and he claims the bankruptcy is due to quibbling over construction costs? When the projected traffic volume was off by nearly 40,000 vehicles per day, it’s beyond disingenuous to blame the default on anything other than flawed traffic projections!

Tolling existing interstates rises again

Another panelist advocated the new highway bill lift the ban on tolling existing interstates. This is what un-elected bureaucrats are doing on the taxpayers’ dime…listening to high-powered lobbyists find every way under sunshine to not only make taxpayers pay dearly for roads, but also to make them pay TWICE!

“Houstonians are willing to pay to get out of congestion,” noted Congresswoman Sheila Jackson Lee in her remarks. I’ll say, whether they like it or not, too. The new toll lanes, called “managed lanes,” on I-10 are 100% paid for with gas taxes and should have opened as free lanes. But instead, Houston elected officials chose to charge motorists tolls to access these lanes that are rarely used. With elected officials more than happy to double tax its citizens, perhaps that’s why Houston residents experience some of the highest transportation costs in the country.

If you build it, they will come

One of LaHood’s initiatives for the next highway bill is to “keep our communities economically competitive and affordable.” When foreign-owned toll roads (using PPPs) charge commuters 75 cents PER MILE to drive, that’s like adding $17 to every gallon of gas you buy. That’s not only unaffordable, it’s unsustainable! Texas Transportation Commission Chair Deirdre Delisi admitted in testimony February 1 that PPPs cost more due to the private operators’ building in profit (and other records show it’s guaranteed profit!).

Also unsustainable is this notion of LaHood’s that “if you build it, they will come.” Not so with toll roads. SH 130 is the poster child of failed, underutilized toll roads. The taxpayers are paying to bailout this tollway EVERY year for the life of its debt. It’s so empty that a distressed airplane landed on it in the middle of “rush hour.” SH 130 was sold to the public as the panacea to unclog I-35 through Austin by getting the truck traffic off of the city’s main artery. Few can afford to pay the $13/day to take the toll road, so the tollway sits near empty while I-35 stays mired in gridlock. If they really want to solve congestion on I-35, they’d turn SH 130 into a FREEway so truckers and those who need to get beyond Austin will take it.

Full court press by Trans Texas Corridor lobbyists

One of the first questions after LaHood’s speech was offered by Alliance for I-69 lobbyist Gary Bushell. Bushell is the guy TxDOT illegally hired with taxpayer money to lobby for the Trans Texas Corridor TTC-69/I-69. Bushell also cut a backroom deal with Senator Robert Nichols during the waning days of the 81st (2009) legislative session not only to ensure TTC-69 would continue (despite a bill that would have repealed the Trans Texas Corridor as Texans have demanded — the bill never became law), but also to ensure the private developers, ACS of Spain and Zachry of San Antonio, would never lose money on the deal.

Bushell said the TTC-69/I-69 environmental document was ready for approval by LaHood’s department and asked for a green light, to which LaHood responded, “Sure.”

The lobbyist for the Ports to Plains Trans Texas Corridor (often called a “priority corridor” by Congress is slated to go from Mexico, through Del Rio, San Angelo and Lubbock, Texas through Denver, Colorado up into Alberta, Canada) was also sure to plug his trade corridor.

Exotic financing = RISKY financing

Jeff Moseley, a panelist with the Greater Houston Partnership (Chamber of Commerce), was a voice of reason emphasizing that when the federal government fails to properly fund roads, it forces the states to resort to “exotic” financing (think “innovative financing” where taxpayers subsidize private toll road profiteers with the same multi-leveraged, risky debt financing schemes that caused the sub prime mortgage crisis). Texas power-brokers have fast-tracked and embraced such “exotic” (and risky) reliance on toll roads thanks to Rick Perry. However, Texans continue to revolt against such tax and spend schemes, resulting in their biggest grassroots victory to date: KILLING public private partnerships last year. The real challenge that lies ahead is how to keep it that way.

Read TURF’s written comments submitted to the Secretary of Transportation here.

Terri Hall

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