Farouk Shami Proposes Overhaul in Transportation Policy

Texas Insider – January 20, 2010, On The Record

Link to article here.

Elite’s Toll Road Scheme
The Big Picture/with Mark Anderson,American Free Press deputy editor, www.AmericanFreePress.net; and host of RBN’s When Worlds Collide, broadcast Saturdays from 7 to 9 p.m. Central; Call in, 800-313-9443.

Posted: January 15, 2010

Outraged Texans are coming out swinging in early 2010, continuing the brutal fight against the outright privatization of public highways — trying to avoid getting steamrolled by Wall Street “highwaymen” and their political allies who would deprive Texans and all Americans of the ownership and cost-effective use of highways already paid for with gasoline taxes.

Watching a state like Texas tells a great deal about what could happen anywhere. So, AMERICAN FREE PRESS has been monitoring the Texas situation for more than three years, as the drama plays out on whether the Trans-Texas Corridor – a pivotal piece of the proposed NAFTA Superhighway system for engineering the physical aspects of the North American Union scheme – will be built to any irreversible extent; and whether existing freeways will be converted to toll ways in a privatization scheme to cancel any competition that freeways would pose to aggressive plans to toll any highway with enough traffic for manipulators to make money.

These financial sharks tempt the cash-strapped states with quick money by acquiring freeways from them and transforming them into for-profit toll ways. Or sometimes state-controlled toll ways are privatized under long lease agreements, as happened with the Indiana Toll Road. Tolls of 75 cents a mile are a distinct possibility in places such as Dallas-Fort Worth, an area whose destiny appears to be the U.S. “toll” capital.

The usual suspects will leave no road un-tolled here — and abroad — if we let them get their way. Yes, Goldman-Sachs is creating a “highway market” to control. Meanwhile, the Rothschilds are reportedly among the major financial forces privatizing the roads in Britain.

The domestic scene’s latest developments included a Jan. 11 final public hearing in Texas on a plan to charge tolls on the northbound lanes in San Antonio’s large 281/1604 Interchange. San Antonio Toll Party (SATP) members turned out to protest the plan.

Their main concerns were noted in a news bulletin:

“They’re charging us the price of a whole interchange ($143 million), but we’re only getting half ….Each set of ramps costs roughly $59 million, yet the [Regional Mobility Authority] is putting this project out to bid with $84 million in ‘project enhancements’ in order to use-up all our stimulus money on anything but fixing 281 North or building the whole interchange toll-free.”

From there, the SATP meets Jan. 21 at the Big ’Z Burger Joint in San Antonio at 2303 North 1604 W — mainly to prepare for a major hearing of the Senate Transportation Committee on Feb. 1 in the capital of Austin.  AFP plans to attend.

SATP’s news bulletin on the hearing notes: “Our attention turns to accountability at the ballot box, producing our Voter Guide, preparing for a big grassroots turnout at [the] hearing in Austin on Feb 1 …. Come be a part of preserving our freedom to travel.”

Those in AFP’s growing Texas readership take note: This Austin meeting, to take place at 8 a.m. at the Capitol Extension Auditorium, will focus on statewide road funding alternatives.

“If you want to end tolling as the primary means to fund new roads and for the most affordable method of funding roads to prevail [the common use of gas taxes for maintenance, repairs and needed expansions] you must come to Austin … to be heard,” the SATP also announced. “That means telling lawmakers ‘no’ to selling our roads to private, foreign corporations [Spanish firms under Comprehensive Development Agreements]; ‘no’ to raiding teacher retirement funds and public employee retirement funds to finance them; ‘no’ to any tax increases until they clean house at TxDOT; and stop raiding the gas tax for things that don’t relate to roads; and ‘yes’ to the most affordable way to fund roads (the statewide gas tax that hasn’t been raised since 1991).”

To give an idea of what these toll schemes mean to the average motorist no matter where they’re enacted, The Fort Worth Star-Telegram on Dec. 27 noted:  “Tolls could go as high as 75 cents per mile when congestion is at its worst. That could be more than five times higher than the average 14.5 cents per mile that motorists currently pay on Dallas-area toll roads.”

It’s a concept called “value pricing” in which the “value” all goes one direction — into the fat cats’ pockets.

Building a toll road that you are forced to use has the same effect as paying a higher tax on gasoline. Whether a highway is free, or you are tolled, you still pay 38.4 cents in federal and state gasoline taxes. That is the baseline. Assuming that your vehicle averages 20 miles per gallon, if you drive 20 miles on a toll road charging the maximum 75 cents per mile, you pay your 38.4 cents in current gas taxes plus another $15 in tolls. Thus, the combined tolls and taxes to drive on that road total $15.38 per gallon of gasoline. And to think Americans griped when gas was $4 a gallon.

Yet, the ultimate problem is that more toll ways in any state will create a vast “highway market” [read: racket] by privatizing all major public roads so the NAFTA Superhighway, in Texas and beyond, can be waiting in the wings as a major blow against territorial sovereignty. It also is a surefire way to further impoverish the masses who already had what should be a publicly-controlled asset – the creation of money itself – taken away from them starting in 1913 when the Federal Reserve was born.

Now, roads – which, like money, are used by nearly everybody on a daily basis – may be the final frontier for the elite monopolists whose tentacles pull at the grassroots and span the globe.

Link to article here.

No further evidence is needed for former Transportation Secretary Mary Peters’ motivation for her statement below. She’s lobbying lawmakers to end the moratorium on private toll road contracts (called CDAs or PPPs) that sell our Texas roads to the highest bidder on Wall Street and grant monopolies to private corporations because she’s the hired hand of Zachry, a major beneficiary of these contracts!

Then, there are other articles below that report on the comments of other players at the Texas Transportation Forum held in DFW, primarily addressing transportation funding issues. Of course, it was stacked with politicians, like John Cornyn, who echo Peters and want to sell our TX roads to their friends on Wall Street. This is the MOST expensive way to fund roads (coming from so-called fiscal conservatives): it fleeces taxpayers (75 cents PER MILE in toll taxes), grants monopolies, and limits expansion of free roads surrounding toll roads, to name a few. Cornyn also wants to raise the gas tax. So he wants a double whammy…

Bush transportation secretary urges Texas to re-authorize private toll roads

By Michael Lindenbarger
January 7, 2010
Dallas Morning News

Texas lawmakers should reauthorize private toll roads in the Lone Star State when they return to Austin in 2011, former U.S. Transportation Secretary Mary Peters told Texans Thursday.

With little likelihood that Congress will pass meaningful transportation reform, or find long-term funding solutions, in 2010, Peters said states will do well to send strong messages that they are doing their part to solve their transportation challenges. Toll roads, and the ability to attract private investors to pay for them, are one way many states, including Texas, have used to do just that, she said.

Under Gov. Rick Perry, Texas emerged as the leader among states in pursuing private toll roads but that momentum was halted last year, when the Legislature allowed the legal authority for most private toll roads in Texas to lapse.

“That moratorium on public private partnerships should be removed,” she said. “The state of Texas should put that in abeyance. Restoring (private toll roads) here in Texas could show the federal government that you are really serious about tackling your own transportation problems.”
Zachry American Infrastructure, in partnership with ACS, was chosen by TxDOT as the Master Developer for Interstate 69 in Texas. Zachry American Infrastructure partnered with Cintra to form SH 130 Concession Company, which is developing SH 130 segments 5 and 6.

Peters is now a paid consultant — or “senior adviser” — to Zachry American Infrastructure, a private toll road (and other infrastructure) developer affiliated with Zachry Construction, a Texas construction company founded in 1924. TxDOT tapped the infrasture development firm to provide a master plan for Interstate 69 in Texas, and the company joined with Cintra to develop SH 130 in Austin. (Note: this paragraph was changed to remove an inaccurate reference to Zachry being a Spanish firm. It is headquartered in San Antonio. -ML)

Peters spoke at the annual Texas Transportation Forum, a talk fest sponsored by the Texas Department of Transportation involving hundreds of engineers, local officials, financiers and others.

I get that. But Peters, who believes that we do have a crisis, is right to say that the challenge the planners, politicians and engineers face when trying to make change is that so far, most folks simply don’t believe them. And even when in their heart of hearts they think something needs to change, they don’t trust the system to get it right.

I’ll write more this afternoon, after we hear from a series of federal lawmakers — most of whom we can expect will tell us we’re in a crisis. Texas House transportation chairman Joe Pickett will speak — he’s one of the guys pushing for a gas tax increase in 2011 — and so will Sen. Robert Nichols, who knows his way around transportation, too.

At noon, Sen. John Cornyn speaks and I’m interested to see if he takes on transportation seriously as he prepares for a likely future as the state’s senior U.S. Senator. He’s not been big on transportation on the past, but it’s interesting to see him on the line up with a keynote address.

More on that, and much else, later right here, on the transportation blog.

____________________________________________________________

Link to article here.

Cornyn: Private tolls should be part of the answer, but only part
Fri, January 8, 2010, By Michael Lindenberger
Dallas Morning News
AUSTIN — Sen. John Cornyn said today that private toll roads should be part of the solution as government leaders in Texas and in Washington struggle to pay for new roads, bridges and other transportation infrastructure.

They just shouldn’t be the only solution, he added in a speech the closed a half-week of transportation chit-chat among hundreds gathered for the fifth annual Texas Transportation Forum.

“The first solution many people point to is say, ‘We can solve this with more money.’ Certainly, money can solve a lot of the problems but it can’t solve all of them,” Cornyn said.

If government leaders did a better job of explaining the choices Texans face when it comes to paying for roads, they might be more supportive of not just new toll roads but even other expenses, like higher gas tax rates. But for now, he said, government has done too poor a job in discussing those realities — as evidenced, he said, by the voter pushback that led lawmakers in Austin to end the state’s authority to enter into new private toll road deals.

“To quote Milton Friedman, there is no free lunch,” he said. Voters know that, but they resent seeing “solutions” pushed on them from above. “I have always believed that leadership entails communication. You can’t just call in a room full of smart people and take the best ideas and impose them on people. Not in a democracy.”

He stopped short of explicitly calling on Texas lawmakers to restore the authority for private toll roads in 2011, as former Transportation Secretary Mary Peters did on Thursday.

When asked after his speech if he would flatly rule out a higher federal gas tax, he declined to do so. Instead, he said that he’d leave it up to voters to decide what they are willing to support after their leaders have done a better job of explaining the trade offs involved. If drivers felt they could get a quicker ride to work for a reasonable increase in tolls or other fees, they might sign on, he said.

Link to article here.

This statement sums up his column and why politicians like Perry, Hutchison (despite her ad that indicates she’s against foreign-owned toll roads like the Trans Texas Corridor, her transportation plan states she FOR road privatization), Cornyn, Nichols, and others continue to push the privatization of our public roads:

It’s not about doing the right thing for Texas; it’s about selling out Texans for Wall Street’s fun and profits.

Toll Roads: By the Numbers

Posted Friday, Jan. 08, 2010

Special to the Star-Telegram

“I’m not real fond of raising [gas] taxes when there’s a recession going on.” — Texas Governor Rick Perry, quoted at www.rickperry.org

Our governor keeps shifting his excuse for opposing the gasoline taxes that would bring all Texans highways equal to the sharply increased traffic demand. Gov. Perry’s position, quoted above, rings false for several reasons:

1. He was against raising the gasoline tax in the best of financial times. You’ll find out why in a moment.

2. The proposed tax that Perry was rejecting to get our highway construction in gear to accommodate past and future growth was one thin dime per gallon.

3. Of all the things government does with tax dollars that give huge immediate returns to the national or state GDP, infrastructure investment tops a very short list. Some have suggested that every dollar invested in new roads adds $6 to the economy as it is spread around. That’s an overstatement, but easily $1.50 or more returns to the economy for every new highway dollar spent.

4. Highway funds go to hire people to build roads and supply the construction material: Therefore, road construction quickly lessens any recession’s effect.

Step Over a Dime: Expensive PR

Years ago I wrote that, having had the same gasoline tax for nearly 20 years, Texas easily could add a dime to the price of gas and get the roads built that we desperately need. That dime could come close to fully funding new construction to lower the congestion caused by our massive growth. This was the legitimate use for such funds; after all, government is supposed to invest for our economic future.

Looking at Department of Energy data on gasoline use in Texas, over the past decade that dime per gallon could have added close to $12 billion to our highway fund.

Keep in mind that 11 years ago gas was selling for 99 cents, so a dime per gallon would not have been missed. Come to think of it, drivers would have missed that amount even less when gasoline was $4 a gallon. But therein lies the hypocrisy: Elected officials, both state and federal, refused to raise taxes to fund new highways claiming “no new taxes” — but said not a word when speculators took oil from under $12 a barrel in 1999 to $147 in the summer of 2008. A dime for needed highways, very bad; but untold hundreds of billions of dollars for oil speculators is OK?

Nobody likes higher taxes, but that’s because the average person doesn’t perceive any extra benefit from paying more. But public roads benefit everybody — and everyone can identify this smart use of public funds. And now? Allowing private corporations to build toll roads that everybody will have to use is just “new taxes” under a different name.

“Value-Priced” Motoring

When toll operators find their ventures insufficiently profitable they simply raise their tolls — again and again. Doubt that? Just look at the recent toll increases on the NTTA projects over in Dallas and Collin counties.

Maybe it’s time someone explained what it really costs you to drive on a toll road, as opposed to that extra dime a gallon to buy roads for everyone. You need to know this, because apparently Dallas Fort Worth will soon become America’s new Toll Road Capital.

Gordon Dickson published the most recent information on new toll roads in the Star-Telegram on December 27, 2009. His story contained this news: “Tolls could go as high as 75 cents per mile when congestion is at its worst. That could be more than five times higher than the average 14.5 cents per mile that motorists currently pay on Dallas-area toll roads. It’s a concept called ‘value pricing.’”

Up to 75 cents a mile, and it’s called value pricing?

That’s as Orwellian as doublespeak like “war is peace” and “freedom is slavery.”

Let’s Do the 4th-Grade Math

Building a toll road that you have to use has the exact same effect as paying a higher tax on gasoline to use that highway. Remember, whether the road is free or toll you still pay 38.4 cents in federal and state gasoline taxes; that’s the baseline for this calculation.

We will assume that your vehicle averages 20 miles per gallon: If you drive that vehicle 20 miles on a toll road charging the maximum 75 cents per mile, you pay your 38.4 cents in current taxes plus another $15 in tolls. Therefore tolls and taxes to drive on that road total $15.38 per gallon of gasoline. And to think you were complaining when gas was four bucks.

Even if you use the NTTA system and pay “only” 14.5 cents toll per mile, the net additional cost for each gallon of gas you burn on those toll roads means that you’re out the same as $3.28 per gallon for the luxury of driving on their private highway. And for $3.28 per gallon all you get is one road.

Money Distracts; Big Money Blinds

It’s not just Texas that is refusing to deal with crumbling, outdated or inadequate highway systems and instead turning the task over to private hands. But Texas is abdicating its sovereign duty to protect its citizens from the financial pressures of the highway privateers, not to mention its responsibility to build infrastructure for economic growth.

So how did politicians get the idea that privatizing roads across America was an acceptable future?

Two words: Goldman Sachs.

Yes, large Wall Street investment banks, led by Goldman, started advising states across the nation on how to raise fast money by diverting the most necessary publicly owned assets — roads — into private ownership. You have to admit, it’s brilliant, because it’s a forced and guaranteed market: Americans can’t get out of driving.

As Daniel Schulman and James Ridgeway wrote in their scathing article, “The Highwaymen,” in January of 2007, “Many similar deals are now on the horizon, and MIG and Cintra are often part of them. So is Goldman Sachs, the huge Wall Street firm that has played a remarkable role advising states on how to structure privatization deals — even while positioning itself to invest in the toll road market.

“Goldman Sachs’ role has not been lost on skeptics, who accuse the firm of playing both sides of the fence. ‘In essence, they’re double-dipping,’ says Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association, a truckers’ group that opposes toll road privatization. ’They’re basically in the middle, playing one side against the other, and it’s really, really lucrative.’”

How does “really, really lucrative” for Wall Street translate into “value pricing” for us? It doesn’t. But it’s easy to see how getting 75 cents per mile for permission to drive on a single highway could be an extremely valuable price — for whoever owns that stretch of road.

Oh, and one other thing. These highway privateers can fully deduct the highway’s depreciation for the first 15 years of the lease. So they shelter their income from their highways and then some. That’s one reason why the non-partisan GAO released a study last summer, which concedes that there could be some upside to the concept, also warned that more studies need to be done now on “how best to identify and protect national public interests in future highway public-private partnerships.”

When Will This End?

In many states and before it’s over likely in Texas, roads already bought and paid for by taxpayers either have been or will be sold off to the highway privateers. Now that’s the ultimate insult: Citizens bought the road and maintained it, but the fact that so many drivers use them makes it financially attractive for the state to resell them to private concerns for hard cash. (Notice that no one is considering privatizing Texas’ Farm to Market Roads. There’s just not enough traffic for the expense.) Then those buyers recoup their investment by charging everyone new tolls — under contracts that often extend up to 99 years.

Worse, there’s more evidence of how Wall Street’s quiet PR campaign distorted this issue with the public. Just a few years ago Goldman Sachs put $3 billion into an account for investments into infrastructure, including highways. Goldman also gave $10,000 to Hillco Partners, who lobbied for the 2001 Texas ballot measure to allow for privately operated roads. According to public information, between 2002 and 2005 Goldman paid Hillco lobbyist J. McCartt $95,000 to continue this effort of privatizing our highways. And J. McCartt is a former aide to —you guessed it — Texas governor Rick Perry. No wonder Governor Perry refuses to release the minutes of his meetings on the privatization of our highways.

So, have you been sold on the idea that privatizing roads is a necessity, because our state has no money for new roads and, citing its “no new taxes” policy, steadfastly refuses to raise the gasoline tax by even a dime to build them? Think again. We’ve been set up.

The people selling this “innovative” concept are the same people who deregulated our utilities, leaving Texans paying the nation’s highest electricity rates. It’s not about doing the right thing for Texas; it’s about selling out Texans for Wall Street’s fun and profits.

© 2009 Ed Wallace

Ed Wallace has received the Gerald R. Loeb Award for business journalism, given by the Anderson School of Business at UCLA, and is a member of the American Historical Association. He reviews new cars every Friday morning at 7:15 on Fox Four’s Good Day, frequently contributes articles to BusinessWeek Online and hosts the top-rated talk show, Wheels, 8:00 to 1:00 Saturdays on 570 KLIF. E-mail: wheels570@sbcglobal.net, and access all of Ed’s work at his Web site, www.insideautomotive.com.