Ogden sells out urban commuters in effort to quell TTC opponents in his district

Posted on September 12, 2008 by Terri Hall

It must be election season and the signs show incumbents are feeling the heat. Senate Finance Committee Chair, Steve Ogden, makes it plain that he plans to vote to toll urban areas as long as the Trans Texas Corridor doesn’t come through his district. Can you say, backroom deal? He’s voted for every major piece of toll road legislation, including the bill that authorized the Trans Texas Corridor (HB 3588), now he seeks to cover his own tail by selling out the millions of Texans in urban areas with crippling toll taxes just to get to work!

Don’t believe the TTC is dead for ONE MINUTE. Read why here.
Ogden: TTC plans may be scrapped
By Philip Jankowski
Taylor Daily Press
September 12, 2008

In an interview with the Taylor Daily Press, State Sen. Steve Ogden revealed a possible new course for the controversial Trans-Texas Corridor.

Instead of building superhighways across the state, Ogden said, the state may opt to augment the Texas Trunk System, a web of rural highways that includes U.S. 79.

The plan would expand those highways to four-lane divided highways, while expanding urban infrastructure with toll roads.

“We need to limit that concept to existing highways,” Ogden said of the proposed network of superhighways and tiered rail systems. “I passed a bill last session that did that, but [Gov. Rick Perry] vetoed it. I’m happy to report that he may have changed his mind.”

One of the main reasons for backing away from the Trans-Texas Corridor concept is the daunting amount of funding necessary to complete the 4,000 mile road project, he said. In 2002, the project was estimated to cost the state $145.2 billion to $183.5 billion. In today’s dollars that amount has grown to about $169.9 billion to $214.7 billion, according to current inflation figures.

Included in the price is the cost of acquiring more than half a million acres of right of way for the 1,200 foot wide corridor, which has drawn much ire from communities – including Taylor, Granger and Coupland – that lay in study areas.

“I don’t think there ever was a possibility that that could occur,” Ogden said. “There never was the funding.”

Despite the possible change in direction for transportation, Taylor already is a step ahead of the rest of the trunk system as far as expansion goes. The county and city recently approved an interlocal agreement that effectively took portions of U.S. 79 in East Williamson County out of the Texas Department of Transportation’s jurisdiction for construction purposes so they could be expanded at a quicker pace.

Construction has already begun east of Taylor.

Ogden said he will work to avoid budget shortages that led the county and city to turn their backs on TxDOT by placing more oversight on how the department spends its money. The Texas Legislature’s Transportation Committee recently decided to give the problem-beleaguered department a cash infusion of $1.5 billion.

Currently the Legislature writes TxDOT’s budget, but the department has not followed recommended appropriations, Ogden said.

“Except for the bottom line, the way TxDOT spends their money is not how we appropriate it,” he said.

Ogden said there is legislation in the works that would require TxDOT’s spending to fall more in line with legislative recommendations.

And as chairman of the Finance Committee, Ogden is in a unique position to be influential on how that money is spent.

“I’ll write their budget,” he said. “We’re going to better align their budget with the state’s budget.”

More bad news for toll roads: traffic on Cintra's toll roads down

Posted on September 11, 2008 by Terri Hall

Link to article here. It seems the bad news just keeps comin’ for toll roads and toll operators. We’ve been warning for years that increasing the cost of transportation hurts the economy and the evidence is now EVERYWHERE. There’s only so much money in the family budget to devote to transportation before it takes away from necessities. Restaurants, clothiers, auto makers and many other industries are taking a hit due to high gas prices (and the subsequent rise in food prices). Now even toll road concessionaires that proponents have touted as bullet-proof because “people HAVE to get to work,” are taking a hit, too. We’re building an unsustainable transportation system with toll roads. Time to change course.

Cintra’s August traffic falls on main concessions
Reuters
Thu. Sep 11, 2008MADRID, Sept 10 (Reuters) – Spanish toll road operator Cintra (CCIT.MC: Quote, Profile, Research, Stock Buzz) said on Thursday that traffic fell for nearly all of its main concessions in August.

On Canada’s 407-ETR road, traffic measured in daily journeys fell 4.8 percent in August from a year earlier, affected by the economic downturn and the fact there were two less working days in the month, the company said.

On the Indiana Toll road, traffic measured in daily journeys dropped 6.89 percent, and 6.66 percent on the Chicago Skyway, reflecting tariff increases and the economic slowdown in the United States.

Cintra’s Spanish motorways reflected the impact of the domestic economic slowdown, with traffic measured in daily journeys dropping 7.25 percent on its Ausol I concession from a year earlier and 4.67 percent for Ausol II. The only motorways to show rises in traffic were the Madrid-Levante and the M4-M6.

At 0952 GMT, Cintra shares were 0.89 percent lower at 7.78 euros, while the blue-chip IBEX-35 had lost 0.71 percent. (Reporting by Judy MacInnes; editing by Rory Channing)

Federal Highway Trust Fund gets raided funds returned

Posted on September 11, 2008 by Terri Hall

You would think the sky is falling by returning funds Congress stole from the Highway Fund by listening to Secretary of Transportation Mary Peters. Below, you can contrast her press release to that of the facts laid out by the American Highway Users Alliance.

Congress raided the highway fund in 1998 to the tune of $8 billion and all the lawmakers are doing is returning that money to the taxpayers for roads as intended. Does this sort of robbery sound familiar? Our state legislature has raided the highway fund to the tune of $10 billion, which is even worse, but they expect us to double or triple our transportation costs with toll taxes in order to bail out their bad decisions. Mary Peters is now “spinning” the move by Congress as an irresponsible bailout for a bankrupt highway fund (in order to push privatized toll roads, of course), calling it a “dangerous precedent.” (See article that follows the press release). What’s dangerous, Ms. Peters, about restoring raided funds? They twist everything to push privatization and tolling.

The Senate passed the bill today.

____________________________________

Motorists Praise Bush Admin’s “Flip-Flop” On Highway Fund
Senate Urged to Take Immediate Action to Keep America Moving

American Highway Users Alliance
For Immediate Release

WASHINGTON, DC (September 8, 2008) –The American Highway Users Alliance, which represents the interests of millions of American motorists and businesses, today praised Transportation Secretary Mary Peters’ decision to make a “U-Turn” and support solvency for the federal Highway Trust Fund. Until late Friday afternoon, the Bush Administration had threatened to veto the needed legislation, H.R. 6532, which passed the House of Representatives by a vote of 387 to 37.

In reversing course, the Secretary has asked Congress to expedite passage of H.R. 6532 and has warned that the Federal Highway Administration will be unable to pay its bills unless the legislation is enacted this week.

“It appears that Secretary Peters and the Bush Administration have finally come to their senses,” said American Highway Users Alliance President Greg Cohen. “Until last Friday, they had planned to allow the highway fund to go bankrupt, expecting that it would happen after they left office. For years they have been an obstacle to restoring the $8 billion in highway user fees diverted from the fund. We’re elated that they have ‘flip-flopped’ and hope that any remaining opposition to this bill in the Senate evaporates with the Administration’s change of heart.”

The American Highway Users Alliance supports HR 6532 because a solvent Highway Trust Fund keeps the motoring public moving, bolsters the economy, combats highway congestion and improves safety on major American roads.

“The Senate has just returned from a month long summer recess. One of the highest priorities before adjournment should be passing HR 6532,” said Cohen, “and there is no reason why this bill should not garner unanimous support.”

H.R. 6532 enjoys overwhelming support because it solves the problem by restoring $8 billion in user fees taken from the Highway Trust Fund and does not increase the budget deficit. These taxes, paid by motorists at the pump, were quietly transferred out of the fund in 1998 to be used for non-highway purposes. Now that the money is desperately needed, it is important that Congress restore the funds. Unless these highway user fees are restored, the Federal Highway Administration will be unable to pay its bills for road, bridge, and safety projects currently underway.

Background

On July 23, 2008, the U.S. House of Representatives passed the H.R.6532 bill by a vote of 387-37. When the Administration threatened to veto the bill, the Senate did not schedule debate on it because individual Senators threatened to use parliamentary maneuvers to waste valuable time. Now that the Administration has lifted its veto threat and supports passage, the Senate should be able to pass the bill quickly.

H.R. 6532 serves as the only viable solution to the emergency shortfall facing the Highway Trust Fund. When Congress passed the last major highway bill in 2005, the Bush Administration and Congress agreed to deplete the fund by September 2009 and reassess the problem later. However, due to recent decreases in highway travel, the Highway Trust Fund has run short of fuel and truck tax revenue a full year earlier than expected.

The American Highway Users Alliance represents motorists, AAA clubs, truckers, bus companies, motorcyclists, RVers, and a broad cross-section of businesses that depend on safe and efficient highways to transport their families, customers, employees, and products. Highway Users members pay the taxes that finance the federal highway program and advocate public policies that dedicate those taxes that to improve highway safety and mobility.

______________________________

DOT 128-08
Contact: Brian Turmail, Tel.: (202) 366-4570
Friday, September 5, 2008

U.S. Transportation Mary Peters Announces Steps to Delay Highway Trust Fund Shortfall, Calls on Congress to Pass Legislation to Address Problem

Trust Fund Fix Needed Because Congress Ignored Three Years’ Worth of Warnings

U.S. Secretary of Transportation Mary E. Peters today directed the Federal Highway Administration to take immediate steps to protect the solvency of the highway account of the Highway Trust Fund and called on Congress to act quickly to finally address this long-predicted problem.

“Time and again, the President has warned Congress of the pending shortfall and submitted fiscally prudent budgets to close the gap,” said Secretary Peters. “Americans cannot afford to have Congress play ‘kick the can’ with highway funding for another year, another month, or frankly, another week.”

She called on Congress to provide immediate short-term relief by passing pending legislation, already approved by the House of Representatives, that would make an additional $8 billion available for the highway trust fund. She urged Congress, however, to avoid adding pet projects, new earmarks or unrelated provisions on the “must pass” legislation and to get the bill done by the end of next week.

The Secretary said the legislation was needed now because Congress had failed to heed over three years of warnings from the President and the Department about the long-predicted highway trust fund shortfall. She added that the recent and sudden decline in American driving and the resulting decline in gas tax revenue during the summer had accelerated the predicted shortfall.

The Secretary said that, in order to allow for continued highway payments to states while Congress acts, the federal government would begin making reimbursements to states on a weekly basis starting next week. In addition, she said the agency would make funds available on a pro-rated basis. For example, if there are only enough funds to cover 80 percent of requests, the highway agency will pay only 80 percent of each.

Secretary Peters added that states would receive the balance of the funds in the following week, and then any new requests would also be dealt with on a pro-rated basis. She added that the Department will also review its personnel and purchasing policies and consult with other federal agencies receiving highway funds to find ways to free up additional funding for reimbursing state partners.

As recently as July, the Administration opposed the House Trust Fund legislation, in part because the $8 billion would come from the government’s general fund. However, the recent decline in federal gas tax revenue requires immediate action on legislation that has already passed the House to ensure states are not adversely affected.

Secretary Peters noted that today’s problem would have been avoided had Congress acted on the President’s fiscally responsible proposal from last February to transfer funds from the highway trust fund’s mass transit account, which has a surplus. That measure would not have affected current transit investments at all, the Secretary added.

“Taking money from other pressing national priorities to plug a hole caused by poor fiscal discipline sets a dangerous and disturbing precedent,” the Secretary said. She added, though, that “states are working hard to keep the nation’s bridges and roads in good repair and deserve better than IOUs from Congress.”

The Secretary said it was time to fundamentally reform the nation’s scattered approach to transportation. She said Congress should do away with billions in annual earmarks and consolidate the over 100 special niche programs that require states to slice and dice federal transportation funds to do things like build museums and restore lighthouses. She noted that the Administration issued a comprehensive transportation reform proposal along those lines several weeks ago.

To avoid future shortfalls, the Secretary said it was time to embrace new funding mechanisms that respond to today’s transportation challenges and are in keeping with national energy policies. “The current approach may have made sense 50 years ago, but it is ineffective and unsustainable when we are trying to reduce congestion and encouraging Americans to embrace more fuel-efficient cars,” she noted.

Link to complete release here.

TURF launches new campaign: www.281OverpassesNow.com

Posted on September 9, 2008 by Terri Hall

IMMEDIATE RELEASE

TURF launches campaign demanding overpasses for 281 NOW

San Antonio, TX, Wednesday, September 10, 2008 – Citizens fed-up with delays to the fix on 281 have launched a new campaign to demand the gas tax funded fix to 281 be installed immediately, not a toll road. A new web site www.281OverpassesNow.com is chalk-full of documentation, videos, and data including a comparison of the “original” gas tax funded fix to 281 to the enormously expensive $1.3 billion dollar toll road plan.

“We don’t need a toll road, we need overpasses,” notes Terri Hall, TURF Founder. “The QUICKEST, most affordable, least invasive solution has been promised in public hearings since 2001 and funded with gas taxes since 2003. When they can fix 281 for $170 million and keep it a freeway instead of waste $1.3 billion and take nearly 4 years to make it a toll road few can afford, it borders on malfeasance to REFUSE to do the fiscally responsible solution IMMEDIATELY.”

After exhausting every other means to stop the toll road for three years, the citizens through TURF along with co-plaintiff’s Aquifer Guardians in Urban Areas, or AGUA, filed a lawsuit in February to stop the toll road in order to advance the gas tax freeway fix. On the day the lawsuit was filed, the two parties announced there is NO opposition to installing the promised and funded overpasses and expansion of 281 from either group.

In what amounts to a total victory for the grassroots, TxDOT had to ask the court for a 60-day delay in the 281 lawsuit to buy time to persuade the Federal Highway Administration (FHWA) NOT to yank its environmental clearance for the 281 toll project. Through the discovery process of the TURF/AGUA lawsuit, it’s been discovered that TxDOT withheld key documents not only from the public and TURF attorneys, but also the feds!

TxDOT purposely withheld a key study from a geologist they hired that stated the potential long-term effects of the toll road on the Edwards Aquifer could be “severe.” Such a study didn’t conclude what TxDOT wanted it to in order to get clearance from the feds, so they intentionally hid the report and failed to submit it to the FHWA who uses that crucial information in their decision on whether or not to give federal approval for the project.

There is also an email that shows TxDOT tried to “fix” the environmental work for 281 to pre-determine a “Finding of No Significant Impact” (or FONSI) BEFORE the study even began. TxDOT then hired a company, HNTB, to do the so-called “independent” environmental study even though HNTB has a MAJOR conflict of interest, in that, the tolling authority (ARMA) also hired HNTB to do the preliminary engineering for all their toll projects! So HNTB had a vested interest in a “Finding of No Significant Impact” (or FONSI).

“TxDOT and the RMA blame us for the delay instead of their own incompetence and deception. As usual, they seem to think they can wiggle out of their corruption without consequences simply by supplementing the record. They were FORCED to come clean through a lawsuit brought by concerned citizens, not by them being forthcoming,” said Hall. “We will NOT tolerate willful deception nor politicians’ stubborn refusal to give taxpayers the most affordable fix to 281. Give us the overpasses on 281 NOW.”

###

Unemployment climbs to 5-year high, who's got money for extra toll taxes?

Posted on September 7, 2008 by Terri Hall

Link to article here.

Unemployment climbs to 5-year high of 6.1 percent
Friday September 5, 2008
By Jeannine Aversa, AP Economics Writer

WASHINGTON (AP) — The nation’s unemployment rate bolted above the psychologically important 6 percent level last month for the first time in five years — and it’s likely to go even higher in the months ahead, possibly throwing the economy into a tailspin as Americans pick a new president.
A blizzard of pink slips propelled the jobless rate from 5.7 percent in July to 6.1 percent in August, the Labor Department reported Friday. Such a sharp increase is usually a strong recession warning, and it dashed investors’ hopes for a late-year recovery.

Worried about the economy and their own business prospects, employers cut payrolls by 84,000 in August, marking the eighth straight month of losses.

So far this year, a staggering 605,000 jobs have vanished — slightly less than the population of Alaska. The economy needs to generate more than 100,000 new jobs a month for employment to remain stable.

Richard Yamarone, economist at Argus Research, feared that the jobless rate would cause consumers and businesses to “move from a moderately concerned stage to outright fear” and reduce their spending even more.

A toxic trio of housing, credit and financial problems has badly shaken the economy, and the crisis shows no signs of letting up. It’s the public’s top worry, and many experts believe the situation will get worse before it gets better.

The unemployment increase means many companies will feel pressure to reduce their business investments — either in capital projects or hiring — for the rest of the year.

“Mix business caution with consumer exhaustion and you have a recipe for a real recession,” said Terry Connelly, dean of Golden Gate University’s Ageno School of Business.

At an unemployment center in St. Louis, Kimbel Adams could recite the exact date he was let go from his job as a hospital security guard — April 8. Since then, he has applied for 10 or 15 jobs, with little luck.

“Most of the jobs you can get, it’s hard to make a living off. I could always work at a fast food restaurant and struggle to pay the bills,” Adams said.

Adams, 27, said unemployment checks and irregular gigs as a nightclub bouncer help make ends meet. But eating at restaurants is a thing of the past, and Adams continues to drive a 1991 Buick in spite of the constant maintenance problems.

The number of unemployed rose to 9.4 million in August, compared with 7.1 million a year ago. Economists predict more job losses ahead, pushing the unemployment rate to 7 percent by fall of 2009, according to some projections.

Against this backdrop, a growing number of analysts predict the economy will jolt into reverse in the final three months of this year and possibly in the first three months of next year, meeting a classic definition of a recession.

The economy shrank late last year and barely budged at the start of this year. Growth picked up in the spring, thanks to brisk exports and the government’s tax rebates, which energized shoppers at home. But that rebound wasn’t expected to last.

Slower growth overseas will probably cause exports to fall off just as Americans are cutting their spending and the benefits of the rebates disappear.

Job losses were widespread at factories — especially housing-related manufacturers and automakers — as well as construction companies, retailers, mortgage brokers, real-estate firms, hotels and motels, and temporary-help firms, which are looked at as a barometer of demand for future hiring.

Those losses swamped employment gains in government, education, health care and elsewhere.

After the last recession, in 2001, the unemployment rate rose as high as 6.3 percent in June 2003.

By historical standards, the country is far from the employment carnage seen more than two decades ago, when unemployment climbed above 10 percent during President Reagan’s first term in the early 1980s.

Still, some groups are being hit harder than others. The jobless rate for blacks jumped to 10.6 percent last month, the highest since late 2005. And, the unemployment rate for Hispanics rose to 8 percent, a five-year high.

The grim report prompted Capitol Hill Democrats to renew their push for a second stimulus package. The Bush administration and other Republicans have been cool to the idea.

Presidential candidates Barack Obama and John McCain seized on the job figures to attack each other’s proposals to turn the economy around.

“The working men and women I meet every day are working harder for less,” Obama said. He advocates tax cuts for working families and investment in road, bridges and other projects to lift the economy.

McCain vowed to “fight for those that lost their jobs, savings and real-estate investments.” He said tax reductions for people and businesses, job training and measures to promote trade will help ease the economic woes.

The latest employment snapshot was worse than economists were forecasting. They were expecting payrolls to drop by around 75,000 in August and the jobless rate to tick up a notch, to 5.8 percent.

The White House was disappointed, too.

“There is no question that the labor market is not as strong as we’d like,” said press secretary Dana Perino. “We want to see the economy return to job growth, and we understand that this is a difficult time for many Americans. We want everyone who wants to work to be able to find a job.”

Wages went up modestly last month, but prices have been rising faster. Average hourly earning rose to $18.14, up 3.6 percent from last year. High food and fuel costs mean paychecks aren’t stretching as far, though.

A separate report showed a record 9.2 percent of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of June, according to the Mortgage Bankers Association.

The Fed, which is struggling to curb inflation and improve growth, is expected to leave a key interest rate alone at 2 percent when it meets Sept. 16.

At its last two meetings, the Fed didn’t change the rate. Before that, though, it had aggressively cut rates to shore up the economy. Many thought the Fed might start to raise rates next year to fend off inflation. But now with employment deteriorating, some wonder whether the Fed might be forced to lower rates again.

Associated Press Business Writer Christopher Leonard in St. Louis contributed to this report.

(This version CORRECTS that prediction of 7 percent unemployment is for fall 2009, not this fall.)

Gas prices cut driving for 8th straight month!

Posted on September 7, 2008 by Terri Hall

Link to article here. Once again, with driving going down to the increased expense, toll road usage also continues to drop. Now is NOT the time for toll roads using leveraged debt that likely will not be repaid. We’re setting ourselves up for another financial “bubble’ not unlike the mortgage crisis if our politicians don’t heed the warning signs!

High gas prices cut driving for 8th month
Aug 14, 2008
By Tom Doggett
Reuters

WASHINGTON (Reuters) – Americans scaled back their driving during June by almost 5 percent in response to soaring fuel costs, the government said on Wednesday — a day after announcing the biggest six-month drop in U.S. petroleum demand in 26 years.

The Transportation Department said U.S. motorists drove 12.2 billion fewer miles in June compared to a year earlier, marking the eight month in a row that travel declined in the face of record gas prices as Americans change their driving habits, buy more fuel-efficient cars and switch to public transport.

“Changes in consumer behavior have essentially erased five years of growth in gasoline demand,” the American Petroleum Institute said on Wednesday in a separate report that showed gasoline use during the first seven months of 2008 fell by 2.1 percent to the lowest level for the period in five years.

The impact of driving less was also reflected in new Energy Department data released on Tuesday that said total U.S. petroleum demand shrank by an average 800,000 barrels a day during the first half of this year, the biggest decline since 1982, because of soaring pump costs and a weak economy.

Since last November, U.S. motorists have driven 53.2 billion fewer miles than they did over the same period a year earlier, topping the 1970s total drop in U.S. miles traveled of 49.3 billion miles that was caused by several recessions and increases in gasoline prices over the decade.

The Transportation Department collects its highway data from more than 4,000 automatic traffic recorders operated around the clock by state agencies.

The presidential candidates have responded to voter angst over high gasoline prices by offering different solutions they claim will bring down short-term fuel costs.

Democrat Barack Obama wants to release 70 million barrels of crude from the U.S. emergency oil stockpile that he believes will immediately cut prices as more supplies are put into the market.

Republican John McCain wants to expand offshore drilling, which he says said would result in lower prices by sending a message to oil traders that the United States was serious about boosting domestic oil production.

The decline in miles traveled since last November has occurred the most in rural areas, where travel has fallen by 4 percent, compared to the 1.2 percent drop in urban miles traveled, the department detailed.

High fuel costs have the biggest effect on individuals in rural areas, who normally drive more and spend a larger share of their income on gasoline.

In response to soaring fuel prices, Americans appear to have given up their long love affair with big, gas-guzzling vehicles and are leaving them for cars that can save money at the pump.

U.S. automakers reported that car sales in July outpaced SUV and other light truck sales by 10 percentage points, with cars accounting for 55 percent of all vehicles sold.

Trucks sales had consistently made up the majority of vehicles sold between 1997 and 2007, until rising gasoline prices encouraged consumers to switch to cars with better fuel economy.

“Hopefully, the era of the Hummer and other gas guzzlers is over,” said Daniel Weiss, energy expert at the Center for American Progress think thank in Washington.

Honda Motor Corp., the industry leader in fuel efficient cars, is expanding its fleet in 2009. “Small, fuel-efficient vehicles are not short-term strategies for Honda,” Richard Colliver, executive vice president of Honda America said on Wednesday at a forum in Traverse City, Michigan.

“I do think there has been a shift in consumer preference here,” said Tim Evans, energy analyst for Citi Futures Perspective. “Over the intermediate to longer-term, I don’t think automakers are going to risk building as many SUVs.”

Many Americans are giving up the car altogether to get to work and instead are using public transportation.

“Americans are beginning to drive less and less,” Miami Mayor Manny Diaz, head of the U.S. Conference of Mayors, told Reuters. “America is beginning to change its habits, which I think is a good thing, and government investment ought to follow,” he said, referring to more money for public transportation projects.

However, the downside of less driving for the government is fewer dollars to pay for highway projects and public transportation, which is funded by an 18.4 cent-per-gallon gasoline tax and a 24.4 cent-per-gallon diesel fuel tax.

(additional reporting by Soyoung Kim and David Bailey in Traverse City, Michigan and Rebekah Kebede and Martha Graybow in New York; Editing by John Picinich and David Wiessler)

High gas prices have dimmed private equity's hopes of rosy returns on toll roads

Posted on September 5, 2008 by Terri Hall

Link to article here. No matter what, selling off our infrastructure to the highest bidder on Wall Street means higher taxes, sweetheart deals for special interests, and taxpayer bailouts when the risky deals fail. Just like the mortgage and banking bailouts, government is facilitating the taxpayer rip-off by privatizing toll profits and socializing the losses (or the risk).

The Trouble with Transportation
High gas prices have dimmed private equity’s hopes of rosy returns on infrastructure and transportation projects.
Government could be the loser
By Catherine Holahan
Businessweek
September 5, 2008
For private equity investors, the sheen is wearing off purchases of public asphalt. A year ago, banks and private investment firms were racing to pour money into infrastructure projects such as highways and light-rail systems. Compared with an investment in stocks, buying or leasing a highway seemed like a low-risk bet with easily estimated, long-term returns. After all, competing highways or mass transit systems couldn’t just spring up overnight to divert toll- and ticket-paying customers.

But $4-a-gallon gasoline slowed the enthusiasm for such projects. Many commuters are choosing to leave their cars in the garage and take mass transit, or don’t have a job to drive to anymore. “If you look at the publicly reported forecasts for the Chicago Skyway or Wall Street estimates of global traffic, they are completely different now,” said George Bilicic, a managing director at NYC private equity firm Kohlberg, Kravis, Roberts who spoke on a panel held Sept. 3 at the University of Minnesota. “It goes into the risk assessment associated with the investment decision.”

The purpose of the panel was to bring politicians in town for the Republican National Convention together with business representatives in a discussion that fits into GOP efforts to find privatized solutions to large public problems such as crumbling infrastructure. “Transportation is both broke and broken,” said panelist Bruce Katz, vice-president and director of metropolitan policy at independent research firm the Brookings Institution. “How do we have the collaboration with the private sector so we can really deal with the totality of this issue?”

Power to Private Equity

One answer may be to accept that private equity gets to dictate more terms, and use up-front revenues from long-term infrastructure leases to provide tax breaks offsetting higher commuting costs. That solution dovetails with the Republican convention theme of lower taxes.

But higher risk means investors are going to demand larger returns. And that’s not welcome news for government officials. Some of those present at the panel discussion said they don’t want to slam voters with higher commuting costs but do want private investment to fund improvements in roads and mass-transit systems (BusinessWeek, 5/7/07) not to mention provide immediate cash for other government projects. “We are acutely aware of transportation challenges in this community,” said St. Paul Mayor Chris Coleman, referring to the difficulty of getting a light-rail system constructed between St. Paul and Minneapolis. “I think there is a lot of room for private investors to invest in our community.”

Despite the economic downturn, private sources could still account for $240 billion of the capital needed for infrastructure worldwide each year, according to a September 2007 report by Ernst & Young. “The pools of private capital are gathering,” says Bilicic. “And these pools are forming with a global point of view.”

Renegotiating the Terms

But investors are adjusting by lowering their bids on long-term public infrastructure leases and demanding more assurances that the managing firms can raise tolls or adopt controversial measures such as peak toll pricing. (On one privately owned road in California, tolls jump from less than $2 to more than $20 during rush hour under the peak pricing model.) “Nobody will bid on [a toll road] at the fare of $1.50 per person,” said panelist and former Washington Senator Slade Gorton.

Strapped commuters obviously are in no mood to pay for higher tolls. What investors are counting on is that taxpayers are even more averse to paying the higher taxes needed to repair century-old roads, bridges, and other public facilities. The American Society of Civil Engineers estimated in 2005 that it would cost $1.6 trillion to simply bring the nation’s infrastructure up to “good” condition. That doesn’t include the amount it would cost to add environmentally friendly mass-transit systems and other infrastructure upgrades needed to help people move closer to the cities where they work, thereby reducing vehicle-related pollution.

Many taxpayers are already skeptical about federal and state transportation expenditures, panelists said, because they often get allocated to politically powerful districts rather than where they are most needed. “It never made sense to me why we would tax ordinary people and use that money to subsidize this type of sprawl development,” said panelist Tom Darden, CEO of Cherokee Investment Partners, a firm that works with government to invest in land development around new transportation hubs.

Congestion Plagues Cities

“It’s hell trying to get around any city in America today, from sea to shining sea. We are just at a stall in congestion,” said panelist John Mica, the ranking Republican on the U.S. House Transportation & Infrastructure Committee. “Some people think I have been smoking the funny weed and hanging out with college students when I say we need more than a trillion dollars… But we have got to do something.”

Joe Krier goes to work for Bracewell & Giuliani, Cintra's law firm

Posted on September 5, 2008 by Terri Hall

Link to article here.

After spending the last 4-5 years pushing toll roads on San Antonio in earnest, ex-Greater Chamber President, Joe Krier, will return to work for toll road law firm extraordinaire, Bracewell & Giuliani. The firm is the sole legal firm for Cintra, who has the development rights to build 5-6 segments of the Trans Texas Corridor, TTC-35, the first being SH 130 segments 5 & 6.

Chamber-ex Krier takes new job
By David Hendricks
Express-News
09/05/2008
Ten months after departing as president and chief executive of the Greater San Antonio Chamber of Commerce, Joe Krier is back on a payroll, returning to a law firm he served early in his career.

Krier will head the new Public Issues Management Group at Houston-based Bracewell & Giuliani. Working from the law firm’s San Antonio office, Krier said he will continue where he left off after two decades at the helm of the chamber, giving advice to businesses.

“Corporate America has figured out it must do business with the federal, state and local governments every day,” Krier said in an interview at his new downtown offices. “Whether directly regulated or regulated through your customers and clients, it is important to how government and the public feels about you.”

Krier said his main job is to offer advice to senior management at large corporations “to get from you are to where you want to be ….. to get across the goal line.” That could involve polling, public relations, lobbying or work with regulatory challenges or corporate transactions.

While at the chamber, Krier headed a 36-member staff with a $4 million annual budget. At Bracewell & Giuliani, he will work with 30 lawyers in the San Antonio office and 430 total in offices in Houston, Austin, Dallas and six other cities.

Similar services are offered to corporate clients by Texas firms, including Public Strategies Inc. of Austin, founded by San Antonio native Jack Martin, and San Antonio-based The Loeffler Group, founded by former U.S. Rep. Tom Loeffler. The Loeffler Group, which specializes in lobbying, is affiliated with the law firm of Loeffler Tuggey Pauerstein Rosenthal.

J. Tullos Wells, managing partner of Bracewell & Giuliani’s San Antonio office, said Krier’s new group has the advantages of lawyer-client confidentiality privileges and the worldwide research of the Bracewell & Giuliani firm.

While the law firm will not conduct services like public relations and polling directly, it will hire outside companies for those purposes and serve as a central coordination point for corporate campaigns and projects.

“Joe Krier has worked at the intersection of business, government and public issues for 20-plus years and will significantly enhance our ability to deliver these capabilities,” Wells said.

Although Bracewell & Giuliani’s Public Issues Management Group will be positioned to serve Texas corporations, it will concentrate on the Interstate 35 corridor and issues that affect the corridor. Krier noted the international corporate partnerships bidding on highway construction as examples.

Krier will work closely with Scott Segal and former East Texas congressman Jim Chapman, who co-chair the law firm’s 16-professional government relations practice, and Milam Mabry, who is transferring from the firm’s Washington office to Austin to work on legislative and public policy matters.

Former New York Mayor and ex-presidential candidate Rudy Giuliani became a name partner for the law firm in 2005 and adds a public policy role at the law firm, Wells noted.

After graduating from the University of Texas at Austin and its law school, Krier worked from 1971 to 1973 in Houston for what then was called Bracewell & Patterson. He moved to San Antonio to practice law for a dozen years before taking the top job at the Greater San Antonio Chamber of Commerce.

While at the chamber, Krier was twice elected chairman of the Metro 8, representing Texas’s eight largest chambers of commerce. The chamber was involved in setting strategies for military base-closing rounds and finding funding for the Alamodome and AT&T Center. It also helped start several industry institutions, including the San Antonio Technology Accelerator Initiative, during Krier’s tenure.

Business leaders said Krier was a good fit for the position.

“Joe’s group will offer clients invaluable insight into the direction of public policy issues, from economic development to infrastructure to tax,” said Jim Greenwood, government relations vice president at San Antonio-based Valero Energy Corp. “I doubt there are many issues Joe does not have a good grasp of.”

Tom Frost, chairman emeritus of Cullen/Frost Bankers Inc., said: “It’s valuable to have this counseling. It’s a growing area. Business executives are focused on pricing and holding down costs, but they need someone to tell them what is happening in the world. ….. I’m tickled to death that Joe Krier is working for this community again. He’s good at it.”

Public comment on TxDOT's "Public Involvement Plan" & "Strategic Plan"

Posted on September 5, 2008 by Terri Hall

Public comments DUE on TxDOT’s “Public Involvement Plan” (Sept 12 by 4 PM, submit via email here) and its “Strategic Plan” (Sept 15 by 5 PM, submit via email here).

TURF Public Comment on TxDOT’s Public Involvement Plan

TURF is a non-profit, grassroots organization with close to 50,000 members. Our mission is to educate and defend citizens’ concerns about toll roads and the Trans Texas Corridor, as well as to promote non-toll transportation solutions.

1. It doesn’t matter if TxDOT properly informs the public of a transportation project that affects them if they summarily dismiss the public comment submitted. What matters is that the TAXPAYERS have veto power over projects they don’t want or to have their concerns taken into account in a meaningful way. TxDOT needs to be required to do the transportation “alternative” that the public prefers and it must be the alternative that is also the most affordable and least invasive. This must be required in order to restore the public’s trust that transportation decisions are being made in the public’s best interest.

On page 5 TxDOT claims they “thoughtfully consider the feedback received during the public involvement process” yet they DO the exact opposite.

2. TxDOT’s document states on page 3: “All other interested parties are provided notice of the comment period and public hearing via the Texas Register public notice and TxDOT’s website.”

TxDOT’s only notification of its plans is through notice in the Texas Register (which few citizens are even aware of or have time to wade through) or its web site. The Sunset Committee Report notes the non-user friendly problems with TxDOT’s web sites. Finding needed information on TxDOT’s web sites is at times near impossible unless one knows where to look. There must be an announcement made through major news outlets under public service announcements so that a mass audience is made aware of transportation hearings or that public comment is being solicited.

3. Page 5: “Several divisions are instrumental in TxDOT’s efforts to ensure a transparent process that provides the public with comprehensive information on a timely basis to facilitate stakeholder input in key decisions throughout the transportation planning process. TxDOT encourages Coordination, Cooperation, and Communication with the public…”

Transparency is not a part of TxDOT’s standard operating procedure (SOP). The SOP is to obfuscate, mislead, and hide vital financial information in the name of “proprietary information” or “draft” document loophole. The Trans Texas Corridor TTC-35 development contract had the financial guts withheld from the public for 18 months AFTER a contract was signed and AFTER the Attorney General ordered it be made public.

Toll viability studies, market value studies, and other financial information on toll roads are routinely denied not only to the public (they lobbied to change the law, SB 792 passed in 2007, to allow them this sham protection), but even to Legislators and MPOs who have to vote to approve certain financial terms without even seeing them first! This is an egregious breach of open and transparent government and must be changed. There’s nothing proprietary about projected traffic volumes, projected toll rates, projected diversions rates, financing scenarios, and the projected financial viability of a project. If TxDOT is truly interested in transparency, they’ll release these documents BEFORE a contract is signed and PRIOR TO any vote for approval by MPOs or other decisions makers. Otherwise, the deal is done before the public or its duly elected representatives have an opportunity to weigh in.

4. Page 3 states and SAFETEA-LU requires:
“To the maximum extent practicable, ensure that public meetings are held at convenient and accessible locations and times” and “Demonstrate explicit consideration and response to public input”

The Alamo Regional Mobility Authority held its public meeting in June 2008 on the financial disclosure of its toll rate information in the middle of a workday (1 PM) more than 20 miles from the project area with NO PARKING. In 2007, TxDOT held its final NEPA hearing for US 281 several miles to the southeast of the 281 project area at the Alzafar Shrine Temple in an area almost entirely inaccessible to public transit users, and they refused to allow concerned citizens to have a table out in front with fliers and information stating “”this is a private facility, you can’t have a table out here,” regardless of the fact that it was PUBLIC meeting paid for with PUBLIC money. TxDOT shouldn’t hold meetings at private facilities if that means public involvement and information sharing can be hindered. At a later hearing for the Loop 1604 toll project, TxDOT tried the same tactic but after a County Commissioner and lawyer got involved, they finally relented and allowed the public to hand out information at a public hearing PAID FOR BY THE TAXPAYERS!

In 2006, at another hearing for Hwy 46 in Comal County, Greg Malatek of TxDOT stated that during public comment no one would be allowed to say the word “toll.” When I got up to make my comments, Judy Freisenhahn of TxDOT ripped the microphone from my hand when I said the word the “toll” (a word in the pass through financing contract for the project, but they arbitrarily deemed it “off limits”) in a total violation of my First Amendment rights. Armed police officers then surrounded me, simply for saying the word “toll.” TxDOT staff around the state have routinely forced citizens to face the TxDOT facilitator on the stage and NOT allow any speaker to turn around to address their fellow citizens face to face during public comment. When a citizen in San Antonio pressed the issue, armed police officers surrounded him and he was threatened and intimidated into silence or risked arrest.

At an MPO Meeting on a key vote at the San Antonio MPO, David Casteel of TxDOT directly threatened retribution against the public transit board members for voting against a 281 toll project and both those members were removed from the MPO in retaliation. All of these examples demonstrate a flagrant violation of federal law as it pertains to “public involvement.” Bullying, retaliation, threats, and intimidation are not to be tolerated in a free society. This is the pattern of behavior at TxDOT and it must be changed immediately!

5. On page 6: “TxDOT divisions work closely with state and federal regulatory agencies to ensure that the planning, engineering, environmental, public involvement, and construction processes result in the safe, efficient and effective movement of people and goods throughout the state, while facilitating trade and economic opportunity, and accomplishing TxDOT’s five primary goals: reduce congestion, enhance safety, expand economic opportunity, improve air quality, increase the value of our transportation assets.”

Increasing the value of the public’s highways (that TxDOT calls “assets”) and “expanding economic opportunity” have NOTHING to do with providing transportation. These should NOT be TxDOT’s goals. Their mission changed once public opposition to toll roads and PPPs came on the scene in earnest in 2005. They use these “goals” to justify their toll and Trans Texas Corridor agenda of pushing the most expensive transportation financing option, toll roads. Increasing the cost of transportation through tolling does NOT expand economic opportunity for taxpayers, it hurts the family budget and sucks money away from other household necessities.

__________________________________________________

TURF Public Comment on TxDOT’s 2009-2013 Strategic Plan

The Texas Department of Transportation used to have admirable goals that the public could support. Now, however, their primary mission is to “maximize the value” of our public “assets,” which simply used to be called highways. On page 2, it asks, “Are we doing the right thing?” The public’s answer is a resounding “NO!” The public’s highways, bought and paid for by the taxpayers, are not the Department’s to hawk up to the highest bidder on Wall Street in a risky leveraged debt toll road scheme requiring an additional toll tax to use them.

It’s time TxDOT wake-up and smell the warning signs around them. Fitch and Moody’s have warned that toll roads are becoming more risky, not less, and that governments or private operators will have to increase tolls in order to make bond payments to prevent default since toll road usage continues to drop as the price of gas rises. A continued push for massive leveraged debt and ever increasing toll hikes is as foolish in this economic climate as it is a taxpayer rip-off.

We’re in a different era than we were in 2000 when the push for toll roads began. We’re in the midst of a volatile oil market causing high gasoline prices and an increase in the cost of basic necessities like food, as well as a credit crunch and declining dollar causing an overall economic decline. The cost of living is rising faster than wages and people’s ability to keep up. Continued reliance on tolling is a recipe for economic disaster and will likely lead to a “bubble” that will later “bust” and require massive taxpayer bailouts.

More specific concerns with the Plan are outlined below:

1. On page 2 of the proposed plan it states: “The Texas transportation system plays a critical role in the economic and social well-being of all Texans. It provides the basic infrastructure that supports our economy and quality of life.”

TxDOT acknowledges that Texans rely on our transportation system for daily living and it’s the backbone of our economy. Increasing the cost of transportation from 1-2 cents per mile in gas taxes to 20 cents or more per mile in tolls is an expense most Texans can ill afford. A recent Austin Business Journal article stated Texans are hit particularly hard by high gas prices. On average they spend over $2,000 a year in gas. Since the average cost in tolls will be $2,000-$4,000 a year per family (20 mile commute at 20 cents per mile in tolls, roundtrip daily cost = $8, $40/wk, and over $2,000/yr), tolls will, at a minimum, double the average Texan’s cost of gas!

Toll taxes will negatively impact the family budget, and hence decrease the quality of life of Texans as more money gets sucked into transportation leaving them less money for basic necessities for their families. Though toll roads may save time, it costs more money. It’s an empty promise to say toll roads will give Texans more time with their families as they race home on uncongested tollways, since most Texans will have to work longer and harder in order to pay their toll bills or remain stuck in traffic.

2. The Plan also states on page 2: “Travel demand for people and goods is growing…”

This is untrue. In March of 2008, the United States experienced the largest drop in driving (vehicle miles traveled) year over year in recorded history. Federal Highway Administration statistics show a steady decline in driving almost entirely attributable to high fuel costs. So to continue to rely on old travel demand models that assume VMT will continue to rise is fundamentally flawed and ignores reality.

3. Page 4 states: “Economic and population growth negatively affects the performance of our transportation system. As travel demand increases, congestion worsens, air quality suffers, safety concerns grow, and maintenance needs multiply.”
Again, TxDOT falsely assumes mere population growth leads to highway congestion. The Texas State Data Center predicts population growth will be poorer and less educated. An increase in retirees is expected and they generally do not drive during peak congestion nor contribute to peak traffic in urban areas. A less educated populace will tend to lack the personal income to own and maintain a personal vehicle and less likely to be able to afford tolls on a daily basis.

So TxDOT’s entire “Strategic Plan” is flawed since it’s based on flawed assumptions of growth in driving and congestion. TxDOT also fails to take into account that new population growth and any influx of new users on the highway will also pay gas taxes and thus increase revenues. Additionally, TxDOT fails to consider that a reduction in driving also translates into a reduction in the need for road maintenance.

4. TxDOT’s Vision, Mission, and Goals do not reflect the ideals of most Texans.

Vision
We will deliver a 21st century, multimodal transportation system that will improve the quality of life for Texas citizens and increase the competitive position for Texas industry.
Mission
We will provide safe, efficient, and effective means for the movement of people and goods throughout the state, facilitating trade and economic opportunity.
Goals
Our five goals establish the general direction we will take to realize our vision and mission: reduce congestion, enhance safety, expand economic opportunity, improve air quality, increase the value of our transportation assets.
Strategies
We will harness market-based principles to maximize competition, reduce costs, and guide investments. We will facilitate consumer-driven decisions that respond to market forces.

“Increase the competitive position for Texas industry” and “facilitating trade and economic opportunity” are goals for private industry and should NOT be the aim of a taxpayer-funded public agency. This smacks of corporatism and does not protect the public interest.

Increasing the value of the public’s highways (that TxDOT calls “assets”) and “expanding economic opportunity” have NOTHING to do with providing transportation. These should NOT be TxDOT’s goals. Their mission changed once public opposition to toll roads and PPPs came on the scene in earnest in 2005. They use these “goals” to justify their toll and Trans Texas Corridor agenda of pushing the most expensive transportation financing option, toll roads. Increasing the cost of transportation through tolling does NOT expand economic opportunity for taxpayers, it increases the tax burden and hurts the family budget by sucking money away from other household necessities.

TxDOT’s strategy of using “market-based” tolling is diametrically opposed to protecting the public interest and its access to government-sanctioned monopolies, our public highways. It is NOT the government’s role to implement market forces in order to access public “assets.” Private industry utilizes competition and market forces, but highways are monopolies built with public money to serve the public and cannot be viewed as subject to the same market forces as other private sector goods and services.

A recent poll done by Lyceum, a non-partisan public policy institute, shows only 9% of Texans use toll roads regularly and it also shows the majority of Texans do not want an increase in gas taxes or TOLLS and they are also against tolling existing freeways. TxDOT’s “goals” are in direct opposition to the majority of Texans. Its goals must be changed to reflect the will of the taxpayers who pay the bills.

TxDOT’s stated “tactics” do not protect the public interest using controversial methods like debt financing, handing control of our public roadways over to private entities through PPPs, a state infrastructure bank, and public pension funds to finance toll roads.

5. Congestion not going up, but down.

TxDOT sites the travel time index for Texas’ major cities as going up. Yet, a San Antonio Express News article July 29, 2008, using the most recent Transguide data shows the opposite…travel times in both San Antonio and Houston are going down. Peak congestion in San Antonio went from 3 hours a day down to under 2. This is function of higher gas prices and people finding other ways to get to work.

6. Increasing the cost of transportation does NOT help, but HURT the economy.

TxDOT assumes that by merely increasing the number of transportation-related jobs helps the economy when the economic data shows an increase in the cost of transportation (whether gas prices, gas tax, tolls, or other increases) hurts the economy and causes a dramatic rise in the cost of goods and services, including necessities like food.

7. Texans don’t want the Trans Texas Corridor and PPPs, and TxDOT’s claims of protecting the public interest are false.

Page 31 states:
All state highway facilities, including toll roads, will be completely owned by the State of Texas at all times.

• Only new lanes added to an existing highway will be tolled, and there will be no reduction in the number of non-tolled lanes that exist today.

• CDAs will not include “non-compete” clauses that would prohibit improvements to existing roadways.

Effective ownership is transferred when the PPP is for half century. TxDOT is taking away existing non-toll highway lanes and replacing them with frontage or access roads. That’s highway robbery plain and simple. The non-compete clauses may not prohibit expansion, but the state will have to pay the toll operator a penalty for doing so. The punitive financial consequences will in itself prohibit expansion of non-toll options.

Bottom line: Texans don’t’ trust this agency, its assumptions laid out in this plan are flawed, do not protect the public interest, and will hurt the economy, and its goals do not reflect the goals of the majority of Texans. This Strategic Plan is more of the same, not a fresh start as Chairwoman Delisi assured the Sunset Commission on July 15. TxDOT must return to a more affordable, less risky approach to highway funding.

Not the time for toll roads: Dow plunges after warning of 'financial tsunami'

Posted on September 5, 2008 by Terri Hall

Link to article here.

Dow plunges after warning of ‘financial tsunami’
By Tom Bawden in New York
The Times Online
September 5, 2008

Weary investors in the United States received a further pummelling yesterday as data showed new unemployment claims at a near-five-year high last week, a leading fund manager gave warning that America faced a “financial tsunami” and key retailers released disappointing sales figures.

The mounting nervousness about America’s economy dragged down shares. The Dow Jones industrial average fell 344.60 points, or 3 per cent, to 11,188.20, and the S&P 500 closed down by 38.20 points, or 3.3 per cent, at 1,236.80 points.

The Labour Department reported that the number of Americans claiming unemployment benefits for the first time rose by 15,000 to 444,000 in the week to August 30. The disappointing figures came after companies cut staff in the face of a weakening global economy and contrasted with a consensus forecast that new jobless claims would fall to 420,000.

The data, combined with a call by the manager of the world’s biggest bond fund for the Government to inject more money into the banking system, spooked US investors already jittery about the outlook for the global economy. Bill Gross, co-chief investment officer of Pimco, said that the US was confronted by “systematic debt liquidation”. He added: “Unchecked, it can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami.”

Power to Private Equity

Renegotiating the Terms

Congestion Plagues Cities

Related Links