Watch the report and analysis by an all-star panel including Holly Hansen with The Texan and Charles Blaine with Texas Scorecard on the SH 288 private toll road buyout by TxDOT on Fox-TV 26 Houston here.
Tag: public private partnerships
Incoming House members ask Abbott’s Commission to declare end date on SH 288 tolls
Chairman J. Bruce Bugg, Jr.
Texas Department of Transportation
125 East 11TH Street
Austin, Texas 78701-2483
August 20, 2024
Commissioner Bugg:
As Republican nominees for the Texas House, we are extremely concerned by the action the Texas Transportation Commission took recently to spend over $1.7 billion ($1,700,000,000) of public money to seize control of a toll road (State Highway 288) with absolutely no commitment to end the tolls.
The Republican Party of Texas’s 2024 Platform states, “We call on the Texas Legislature to abolish existing toll roads.”
We recognize that in many instances the state cannot abolish existing toll roads without the use of public money, but your decision to do so without a clear commitment to end the tolls is the worst of all worlds for taxpayers and amounts to nothing less than double taxation.
Furthermore, it is our understanding that the state may secure purchase of this existing, fully operational road by issuing nearly $2 billion in new debt, which will assuredly be repaid by the tolls you are refusing to remove. The key diUerence is that at the end of the current agreement with the private operator, the tolls come oU. With this new arrangement, no such end date exists. Again, the worst of all worlds.
Regardless, the Department’s stated position to maintain the tolls on this road even after this large expenditure of public resources sets an alarming precedent. Upon oUicially taking the oUice of State Representative, we are committed to passing legislation that protects the interests of taxpayers from similar abuses. The actions by TxDOT are out-of-step with the Republican Party of Texas’s Platform and we are committed to changing that as soon as practicable.
Sincerely,
Shelley Luther
Republican Nominee, HD 62
Mike Olcott
Republican Nominee, HD 60
Trey Wharton
Republican Nominee, HD 12
Wes Virdell
Republican Nominee, HD 53
Katrina Pierson
Republican Nominee, HD 33
David Lowe
Republican Nominee, HD 91
AJ Louderback
Republican Nominee, HD 30
Andy Hopper
Republican Nominee, HD 64
Helen Kerwin
Republican Nominee, HD 58
Brent money
Republican Nominee, HD 2
TxDOT pushes ahead with buyout of SH 288 private toll road
TxDOT pushes forward on buyback of SH 288
Action would reduce average daily toll rates by 50%
Aug. 23, 2024
AUSTIN – To provide Texans with toll relief and more free lanes on which to drive, the Texas Department of Transportation (TxDOT) is preparing to terminate the SH 288 Comprehensive Development Agreement (CDA).
This action will place the SH 288 managed lanes in Harris County under full state control allowing future toll rates to be significantly less than what is allowed under the current agreement and enabling TxDOT to move ahead with adding more free lanes along SH 288.
“Building roads, reducing tolls, and saving taxpayer money are top priorities,” said Governor Greg Abbott. “All three are achieved with the Texas Department of Transportation terminating the SH 288 Comprehensive Development Agreement. It will allow the State of Texas to receive over $2 billion in added valuation. TxDOT will use the added value to slash future toll charges and to build free lanes on that segment of State Highway 288. I thank TxDOT for making it easier and cheaper for Texans to travel that route.”
The public can expect a reduction of average daily toll rates by 50% in the next few years. Also, TxDOT will be prepared to begin construction of additional free lanes along portions of SH 288 by no later than 2030, eliminating the contractual restrictions and repayment requirements specified in the current concession agreement.
“I have worked every day for the last few weeks with TxDOT, the Governor, and the Attorney General to bring about this historic action to terminate the SH 288 Comprehensive Development Agreement with a foreign company,” Lt. Gov. Dan Patrick said. “It was a team effort. We will provide meaningful relief for Texas drivers along this corridor. Securing a more than $4 billion asset for just $1.7 billion will not only benefit Texas drivers, it will also enable TxDOT to continue investing in and advancing crucial roadway projects across the state. This strategic action demonstrates our commitment to making fiscally responsible decisions and prioritizing the best interests of Texas and its residents.”
“By taking this proactive, cost-saving opportunity, Texas will be able to provide toll relief by reducing average toll rates by 50% for drivers as soon as possible,” said Texas Transportation Commission Chairman Bruce Bugg, Jr. “By terminating this CDA, Texas will also be able to accelerate the construction of general-purpose lanes much faster than what the current CDA allows us. This is a big win for our taxpayers.”
TxDOT believes the cost of the “buy out” provision in the contract is substantially below the value of future toll revenues on the corridor—even with the anticipated reduction in toll rates. It is expected that the “buy out” payment of $1.7 billion would be paid off with future toll revenue bonds, ensuring that other planned projects around Texas will proceed on schedule.
Additionally, Texas can pay off debt at least 10 years earlier than the current concession agreement, allowing future tolls to be removed.
The state intends to assume operations in October 2024. Aside from lower toll rates and additional free lanes in the future, drivers should not expect to see any notable changes regarding maintenance, operations or billing.
Contact Media Relations at MediaRelations@txdot.gov or (512) 463-8700.
The Texas Department of Transportation is responsible for maintaining 80,000 miles of road and for supporting aviation, maritime, rail and public transportation across the state.
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DOUBLE TAX: TxDOT buyout of private toll road draws ire
TxDOT Toll Road $1.7 Billion Purchase Plan Draws More Complaints from Elected Officials, Candidates
Officials and candidates see the move as a form of double taxation.
Kim Roberts – Aug 22, 2024 – The Texan
A Texas state senator, a House member, and several House candidates have joined in expressing concerns about the Texas Department of Transportation’s (TxDOT) decision to purchase the Highway 288 toll road in Harris County for $1.7 billion and continue charging tolls for its users.
Rep. Briscoe Cain (R-Deer Park) raised questions about the decision and how much it will ultimately cost taxpayers.
“How much will this cost taxpayers to pay for this existing highway, given that TXDOT plans to issue bonds at today’s rates to pay itself back for the purchase of the road?” Cain inquired in his letter posted on X.
Sen. Mayes Middleton (R-Galveston) also sent a letter to Chairman Bruce Bugg of TxDOT expressing his concerns about the plan to continue charging tolls on Highway 288 even after purchasing it with taxpayer dollars.
“This is a form of double taxation and is antithetical to Texas’ tax-friendly reputation,” Middleton stated in his letter.
He also pointed out that the tolls that will be charged after the purchase have the “same built-in profit rate as the private toll operator,” which Middleton said is “far above maintenance costs.” He called on TxDOT to eliminate the tolls on the road completely.
Joining Cain’s and Middleton’s concerns about the purchase are nine Republican nominees for the Texas House. They include Shelley Luther, Mike Olcott, Trey Wharton, Wes Virdell, AJ Louderback, Andy Hopper, Katrina Pierson, Helen Kerwin, and David Lowe.
In their letter, the nominees recited the Republican Party platform plank that states, “We call on the Texas Legislature to abolish existing toll roads.”
While the group of nominees acknowledges that abolishing existing toll roads may require the use of public money, they decry TxDOT’s plan to continue charging tolls, saying it sets “an alarming precedent” and “amounts to nothing less than double taxation.”
The toll road was constructed by BlueRidge Transportation Group and extends about 10 miles from Blodgett Street in Harris County southward, ending approximately at the county line between Harris and Brazoria counties. According to TxDOT, “The highway serves as an important thoroughfare into Houston and the primary express artery to the world’s largest medical complex, the Texas Medical Center.”
When The Texan previously asked about the total cost of the purchase, including finance costs, TxDOT spokesperson Adam Hammons said it is “too soon for TxDOT to make specific public disclosures of debt at this time.”
About the continuing toll charges, Hammons said that TxDOT anticipates reducing toll rates in the future, but that “during the contractually required transition period,” tolling policies that require some of the toll rates to increase each year based on inflation data on January 1 will continue.
Are taxpayers getting DOUBLE TAXED? SH 288 toll road must have tolls come down
TxDOT to Purchase Houston Toll Road, Questions Remain About Total Cost
The agreement with BlueRidge to operate Highway 288 will end in October.
Last week, the Texas Transportation Commission voted to approve the purchase of toll road Highway 288 in Harris County for $1.7 billion.The toll road was constructed by BlueRidge Transportation Group and extends about 10 miles from Blodgett Street in Harris County southward, ending approximately at the county line between Harris and Brazoria Counties. According to the Texas Department of Transportation (TxDOT), “The highway serves as an important thoroughfare into Houston and the primary express artery to the world’s largest medical complex, the Texas Medical Center.”
The original comprehensive development agreement gave TxDOT the right to terminate the agreement “if the department determines in its discretion that a termination is in the department’s best interest.”
TxDOT spokesperson Adam Hammons told The Texan this purchase is not part of a larger strategy to buy toll roads in the state, but is a one-time opportunity based on this specific concession agreement.
TxDOT notified BlueRidge of the termination, effective October 8, 2024.
Rep. Briscoe Cain (R-Deer Park) posted a letter to X with questions for TxDOT that he believes are important to understand about the buyout of Highway 288.
“How much will this cost taxpayers to pay for this existing highway, given that TXDOT plans to issue bonds at today’s rates to pay itself back for the purchase of the road?” Cain inquired.
To acquire the road, the commission created a corporation and expects that the buyout payment will be repaid with future toll revenue bonds, Hammons confirmed to The Texan. The toll revenue of Highway 288 users will be used to repay the bonds, he said.
“The creation of the corporation allows for the Commission to provide a loan to the corporation that can be paid back through the sale of bonds more quickly than through toll revenues alone,” Hammons said.
When asked about the total cost of the $1.7 billion buyout, including financing costs and interest, Hammons said it is “too soon for TxDOT to make specific public disclosures of debt at this time.”
Cain also inquired about whether tolls will continue to be assessed for use of the road.
Hammons confirmed that tolls will continue to be collected after the termination of the agreement, “focusing on SH 288’s needs and future transportation infrastructure within the region. Future decisions regarding tolling policies, pricing, and operations, will be made under the authority of the Texas Transportation Commission.”
He added that TxDOT anticipates reducing toll rates in the future, but said that “during the contractually required transition period,” tolling policies that require some of the toll rates to increase each year based on inflation data on January 1 will continue.
“It’s very disappointing that TXDOT is going to make a major policy decision that will force taxpayers to pay twice to drive on a road without coming to the legislature for guidance or approval,” Cain told The Texan.
“Using taxpayer dollars to buy a toll road and then charging those same taxpayers to drive on the same road is the equivalent of a double tax. In Texas, that dog won’t hunt. The people are taxed too much as it already is,” he added.
Texans Uniting for Reform and Freedom (TURF) is opposed to all toll roads but favors the state buying toll roads and eliminating the tolls.
Hammons didn’t indicate any plan to end the tolls on Highway 288 in the future.
“While we don’t support issuing debt, we believe having the roads in public hands is better,” TURF founder and executive director Terri Hall told The Texan. She pointed out that the original agreement was made with BlueRidge Transportation Group, a subsidiary of the Spanish company ACS Infrastructure Development.
Hammons did not answer whether TxDOT has cash on hand to pay for the toll road without revenue bonds. He reiterated that TxDOT is providing a loan to the corporation that will be paid back by bonds issued by the corporation.Based on their wording, it appears that neither Proposition 7 nor Proposition 1 funds can be used to purchase a toll road.
BIG Fat ‘F’: Majority of state lawmakers earn failing grade
IMMEDIATE RELEASE
Most legislators receive failing grade on anti-toll Report Card
Most legislators receive failing grade on anti-toll Report Card
Both bills filed and bills that moved meant bad news for taxpayers, drivers Austin, Texas – Anti-toll watchdog group Texans Uniting for Reform and Freedom (TURF) released its Report Card from the 86th Legislature today. In comparison to the prior session in 2017, where 57% of legislators were considered friendly, in 2019, that number fell to just 19% (based on the number of lawmakers who earned ‘A’s & ‘B’s). TURF used 18 different transportation, property rights, and good government bills (that impact those first two issues) to calculate each legislator’s score, all of which are listed at the end of its Report Card. Every lawmaker was informed of TURF’s position on the bill prior to the vote.
The Texas House went off a cliff in terms of friendly legislators, with 73% earning a failing grade. In the Texas Senate, taxpayers fared much better with 45% of senators earning As & Bs. Just 16 total lawmakers earned an ‘A.’ Compare that to 56 lawmakers in 2017, and anti-toll voters have cause for concern.
“While none of our anti-toll reform bills ever got a vote either in committee or on the floor this session, the bills that did move were a disaster for taxpayers. The House Transportation Committee, including most every Republican, clearly wanted to raise your taxes on driving with six bills to increase fines & fees whether registration fees, local sales tax, or traffic fines in ‘safety corridors,'” points out TURF Founder/Director Terri Hall.
“With four bills that passed the House Transportation Committee to extend or expand public private partnership toll contracts this session, the toll lobby and crony capitalists pushed this corporate welfare with full force, despite Gov. Greg Abbott’s promise of ‘no new taxes, fees, debt or tolls.’ With tolls on such privatized toll roads now exceeding $3/mile in Ft. Worth, voting to gouge Texas commuters to that level is inexcusable!”
Hall argues the difference is due to the leadership. In 2017, when 9 anti-toll bills were turned into amendments offered on the Texas Department of Transportation sunset bill and came up for a floor vote, 57% of lawmakers knew they had better vote the right way on the toll issue. Seven out of nine anti-toll amendments passed in 2017. In 2019, leadership made sure no anti-toll reforms like removing the toll when the road is paid for and capping toll fines/fees and de-criminalizing an unpaid toll bill, made it out of committee. So taxpayers were left trying to hold their ground, defending themselves from a litany of tax/fee hikes, further criminalizing drivers, and the continued assault on property rights.
“Under that broader microscope, lawmakers failed the test,” Hall concludes.
With election season ramping up, TURF anticipates that the 300 grassroots groups that use its Report Card to vet potential candidates on transportation/property rights issues will be seeking accountability at the ballot box in 2020.
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Should voters promote pro-toll Burkett to senator?
Burkett wants highest possible toll taxes for constituents
With Cindy Burkett throwing her hat in the ring in an attempt to unseat grassroots conservative stalwart Senator Bob Hall, the voters of Texas Senate District 2 need to know about her record. Burkett was quick to support selling off Interstate 635 E to the highest bidder using a controversial toll contract known in Texas as a comprehensive development agreement (or CDA) that gives control of our public roads to private toll companies.
Interstate 635 toll lanes from I-35E to the Dallas North Tollway are already operated by Spain-based Cintra. Commuters in the Metroplex face paying upwards of $24/day in tolls to this foreign corporation just to get to work, and no elected official has any control over how high those toll rates can go. Burkett wants that tax burden to extend to commuters in her own district from US 75 to I-30.
Such contracts give private corporations the exclusive right to extract the highest possible toll from the traveling public in a 50-year monopoly. The private entity receives millions in gas taxes to subsidize their ‘private’ project along with federal loans and bonds backed by taxpayers. CDAs contain non-compete agreements that penalize taxpayers for the expansion of free routes, manipulate speed limits on free routes, and use the power of the state for toll collection and to block your vehicle registration or impound your car if you don’t pay up.
During the public hearing earlier this year on the bill, HB 2861, that would have handed I-635 E to a private toll operator, House colleague and former Transportation Committee Chair Rep. Joe Pickett insisted toll managed lanes do not solve congestion problems because so few can afford to utilize them. Another colleague, Rep. Ron Simmons, maintained tolls, particularly CDAs, are a targeted tax on certain areas while other Texans get their roads fixed without the additional tax burden of tolls. Simmons even asked how can pushing the most controversial and expensive form of tolling be reconciled with Governor Greg Abbott’s promise to fix our roads without new tolls or debt?
But rather than express similar sentiments or concerns about the oppressive tax burden of $200-$400/month in tolls such a deal would impose on her constituents, Burkett sat silent or left the room altogether. Burkett voted in favor of it in committee and again on the House floor, but the bill was ultimately defeated by a vote of 85-51.
In the prior session, Burkett not only supported HB 3556 — the first attempt to toll I-635 E that also failed to pass — she authored it. Though it started as bill restricting the use of tolls, she changed the language giving the Texas Department of Transportation (TxDOT) a free pass to impose tolls if they determined there wasn’t enough traditional funding to do the project. Burkett knew full well that the excuse for why the project hasn’t commenced is because TxDOT claims there isn’t enough funding unless it’s tolled. Burkett even acknowledged that her constituents have made it clear that they don’t want tolls, but she insisted it remain an option until the state boosted road funding.
Well, Texas voters did just that when they voted to give TxDOT $5 billion more per year in new road funding when they overwhelmingly passed both Prop 1 in 2014 and Prop 7 in 2015. Yet Burkett apparently thinks that’s still not enough and came in the very next session pushing the bill to not only toll but also to privatize I-635 E anyway.
TxDOT has since conducted a toll feasibility study for I-635 E and Burkett now knows that TxDOT’s study shows the project isn’t toll viable. So why would she twice vote to support a CDA bill this year to allow a private toll corporation to slap tolls on it for a half century, especially since public subsidies would be needed to build it, setting up a double tax scenario?
While Burkett has filed bills to increase transparency on toll studies and at the North Texas Tollway Authority, her penchant for tolling I-635 E, selling it off to a private entity in a sweetheart deal backed by taxpayers (clearly the most expensive option), and advocating for the double taxation of her constituents, outweighs that legislation.
This is no time for lukewarm or playing footsie with special interests like Cintra who clearly wants to get its hands on the rest of I-635 E to extend its toll road all the way to I-30. The ever increasing tax burden is choking Texas residents on every front. Between the House’s failure to enact property tax reform and Burkett’s push to privatize and toll a major interstate residents rely on for daily living, the best choice in the race for Senate District 2 is the current Senator Bob Hall.
In contrast to Burkett, Hall has fought new toll taxes on every front. He’s filed and passed bills to prevent both free lanes and HOV lanes from being converted into toll lanes (as is the plan on I-635 E), as well as filing Senate Bill 84 to fight for a way to fund I-635 E without tolls by tapping some of the new sales tax revenue that would emerge from commercial development once the frontage roads are built.
Hall has also filed bills to abolish wasteful toll authorities as well as subject them to sunset review, co-authored the bill to block state funds from subsidizing toll projects (to prevent double taxation), and force disclosure of toll viability studies. He currently serves as the Vice Chair of the Senate Transportation Committee and has earned the trust and respect of his colleagues. He’s earned an A+ from anti-toll groups both sessions he’s served as a senator. Together with his pro-taxpayer record on every other issue aside from transportation, Bob Hall is a fierce, faithful taxpayer champion in the Texas Senate and the right choice to serve Senate District 2.
VICTORY: Grassroots KILL private toll bill…
IMMEDIATE RELEASE
CONTACT: Terri Hall, (210) 275-0640
Defeat of private toll road bill affirms Abbott’s pledge to voters
Promise to fix roads without new tolls or debt gets bipartisan support
(Austin, TX – Friday, May 5, 2017) Texas taxpayers can breathe a sigh of relief tonight as a bipartisan effort to defeat expansion of private toll roads in Texas went down in flames by a vote of 79-51 in the Texas House. Taxpayer champions Rep. Jeff Leach (R – Plano), Rep. Jonathan Stickland (R – Bedford), and Rep. Joe Pickett (D – El Paso) led the floor fight, noting 90% of Democrats and 95% of Republicans oppose new toll roads in Texas, and both party platforms oppose privatized toll roads in particular. Governor Greg Abbott promised to fix Texas roads without new tolls or debt, and the Texas House delivered on that promise today by killing Rep. Larry Phillips HB 2861.
Pickett and Stickland made impassioned speeches opposing the bill. Leach emphasized both party platforms oppose this type of toll project and that the voters just gave the Texas Department of Transportation (TxDOT) $5 billion a year in new funding by passing Proposition 1 and Proposition 7.
He asked the bill’s author, “Why do we need this bill now?”
Then Leach directly asked Pickett whether or not the House needed to pass HB 2861 to get the projects done, and he answered with a firm, ‘No.’
Stickland bluntly argued the reason why he’s now serving in the House is because his predecessor Todd Smith voted to turn 183 and 121 into toll roads that devastated his community. He intimated that voters took out their vengeance by electing a new representative.
“My constituents hate it,” asserted Stickland, referring to the privatized toll roads that run through Ft. Worth that are locked into 50 year contracts operated by Spain-based Cintra.
Pickett sounded the alarm about the need to draw a line in the sand, “If we don’t stop it now, it’s never going to stop.”
He warned that passage of HB 2861 would dig the debt-toll road sinkhole even deeper and told his colleagues that Prop 1 and Prop 7 expire, and they’re going to have to address the debt problem very soon. He also shared frustration that neither he nor the public has any idea where all this toll revenue is going. It lacks transparency and gets eaten up by the toll road bureaucracies, or in this case, the private entities the public cannot hold accountable.
“This is so people can make money,” contended Pickett.
Terri Hall, Founder and Director of Texans Uniting for Reform and Reform (TURF) and Texans for Toll-free Highways hailed the defeat of HB 2861, “A bipartisan coalition swept the Rick Perry-era of toll roads aside, and today we officially started the Abbott era that firmly opposes new toll roads, especially privatized toll roads that give an exclusive right to a single company to extract the highest possible toll from the traveling public for a half century at a time.”
JoAnn Fleming, Executive Director of Grassroots America – We the People agrees, “A broad coalition of groups across Texas made it clear that they would not tolerate the expansion of private toll roads and the corporate welfare they represent to continue to spread like a cancer across the Lone Star State. We applaud the work of our champions in the House and thank the Governor for his leadership in firmly setting a new course away from debt and toll roads and moving forward with a new fiscally responsible, sustainable future.”
Roads in HB 2861:
– I-35 in Austin, Dallas, and San Antonio
– I-45 in Houston
– Hwy 290 (Hempstead Tollway) Houston
– I-30 in Ft. Worth
– I-635 E in Dallas
– Loop 1604 in San Antonio
– 290 W in Austin (from MoPac to Oak Hill)
– South MoPac in Austin
– South Padre Island Second Access Causeway
– International Bridge Corridor Project
– Hidalgo County Loop project
– FM 1925 in Cameron & Hidalgo Counties
– Hwy 83 Hidalgo County
– Hwy 68 in Hidalgo County
– Outer Pkwy in Cameron County
– Loop 49 in Tyler (two projects)
Hall concludes, “Special interests continue to push these ‘innovative’ financing schemes despite the public opposition because private toll contracts and design-build procurements drive up the cost to build, putting more money into the pockets of road builders at great expense to Texas taxpayers. Our elected representatives just said, ‘No more.’ You’re not going to gouge our citizens just to get to work.”
See article: HB 2861 Record Vote
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Secret agreement handed private toll firm control of public roads
City hands control over public roads to private firm
By Terri Hall
March 1, 2017
In a stunning betrayal of open government, the Cibolo City Council voted 6-0 to approve a 50 year development agreement with Texas Turnpike Corporation (TTC) granting it the exclusive right to build, operate and maintain what’s been dubbed the Cibolo Parkway — a tollway linking I-35 to I-10 through mostly rural farmland northeast of San Antonio. The agreement was negotiated behind closed doors and was kept secret from the public until it was approved last night.
Even worse, the city council gave TTC the rights to develop a project the taxpayers have already paid for, the expansion of FM 1103, the city’s primary connection to I-35. By doing so, they’ve granted a private corporation a virtual monopoly over the existing non-toll competitor to its private toll road. TTC can intentionally slow down the free option to force more cars onto its for-profit toll road by manipulating speed limits, access points, and stop lights. It’s a developer’s dream and a commuter’s worst nightmare.
The city tried to reassure residents there is no non-compete clause, prohibiting or penalizing the city from building any competing free roads. The agreement may still bind the Texas Department of Transportation (TxDOT) and the county from expanding free roads. But who knows since no member of the public could see it before the council voted on it? So while the city touts it’s protected taxpayers from a non-compete provision, it handed TTC control of the adjacent competing free lanes of FM 1103, achieving a form of a non-compete out the gate.
The agreement offers no way out for the city, except an eventual buy out opportunity after the road gets built. But those buy out agreements are just as thorny as these complex development contracts. Most private toll road developers require the public entity to pay them for any future loss in toll revenue, often making it more expensive to buy them out than the original cost to build it.
One has to wonder how any elected official could green light approval of a project before a toll feasibility study has been performed, the environmental review complete, or final route selected. It’s worse than putting the cart before the horse, it’s putting special interests above the public interest. The company insisted on having an irrevocable agreement in place with the city before it invested $10-$12 million for the feasibility study. Nice work if you can get it, but what about the taxpayer?
No formal public hearings were hosted by TxDOT to notify residents of the proposed project, so unless you happen to look at the city council agenda every two weeks, a resident had no way of knowing what just happened, much less have the ability to stop it since the majority of it was done behind closed doors with a private entity.
Throwing landowners under the bus
Cibolo has become a bedroom community of San Antonio, but before homes stacked the landscape, Cibolo’s roots were decidedly agricultural with farming and ranching dating back to Texas’ days as a republic. The mayor and council weren’t afraid to show their intentions when public discussion about this possible private toll road began to surface last year. Their primary interest is in economic development, which is code for flipping farmland into a commercial tax base. The city acted so desperate for new economic development, it signaled to TTC that it would sell out its current residents for the promise of a higher tax base from its new ones.
The southern boundary of the city that was most recently annexed occurred over the objection of many landowners. Now their worst fears have been realized as a private developer who cozied up to the mayor and council got himself an iron clad contract to mow them over and change their way of life. Roads are disruptive to the native landscape and often split farms in half. Many will not be able to continue farming or even have the ability to access the other side of their property without an overpass (built at the developer’s expense, which isn’t going to happen in most cases). That’s the city’s intent – to drive out the farmers and welcome in big box stores generating lots of sales tax for it to spend. New residents, more traffic, and, they hope, more riders for the toll road.
Eminent domain for private gain
The city has agreed to use eminent domain to take land from its residents and confer it to a private entity for private gain, not for a legitimate public use. While the road is open to the public (so is a mall or restaurant) if they pay a toll, this arrangement is for a private toll road whose corporation will use the city’s police force to become its private toll collector and speed enforcer.
While the politicians argued eminent domain would only be used as a last resort, that’s the club TTC’s CEO John Crew needs to get landowners to sign over their land in negotiated settlements. We’ve seen it used prolifically — sign on the dotted line for the amount we’re offering or we’ll take it with eminent domain and pay you even less.Numbers don’t add up
In town of just 25,000 residents, it’s hard to conceive of how any toll road could be profitable. The city must be banking on literally hundreds of thousands of new residents to make the numbers work. Cities with populations over a million and lots of urban congestion have toll roads that can’t pay for themselves. It just doesn’t add up that this little city will provide enough users to pay back $125 million plus interest, plus profit over 50 years. No elected official has any control over the eventual toll rates that will be charged. So there is no cap or limit. While the consultants tried to say the free market would keep rates in check, roads by their very nature are a monopoly. Just ask the residents in Ft. Worth and Dallas who are paying a private Spanish firm in excess of $20/day in tolls to get to work if they think that’s market rate or reasonable.
But numbers and data don’t matter. The city council seems to think they’re getting something for nothing — even if the toll road goes bankrupt, they get it back at a fire sale price. But the private company knows how to make money even when a toll road goes bankrupt. They put in very little of their own money and borrow the rest. The developer makes their money on the front end so that when it goes south, it’s the bond holders who are at risk, not the developer. If the road goes into bankruptcy, the road will remain operational, but control then gets handed to the bond investors in bankruptcy court where a bunch of the debt gets written down and off the books and the investors hire another operator, starting the process all over again. Control does not revert back to the public or the city. Only if the city exercises its buy out option would the residents get it back under public control.
Taxpayer money in play
The city manager and its lawyers bragged the city had no financial risk in the deal, yet, ironically, the city had to hire extra legal and engineering consultants to review the agreement, which is, of course, at taxpayer expense. There’s more to come since next up is negotiating the formal operating agreement. Policing of this private toll road will also be done by city police. While the developer is supposedly responsible for paying to hire the extra personnel, who is responsible for those public employees’ pensions, benefits, etc.? I’d bet money it’s the taxpayers. Who will collect the tolls and what enforcement does the private company have access to? If it’s anything like the SH 130 tollway, TxDOT does the toll collection and state law allows a user’s vehicle registration to be blocked for failure to play tolls, even when it’s for a private toll road.
The city, like TxDOT, loves to claim the road and right of way is still technically owned by the city and hence the public, but that’s only so the private toll company can use the public’s policing and enforcement powers for its for-profit toll enterprises. For tax purposes, these corporations show ownership and depreciate it like an asset.
Then there’s the tax money it would take to buy out the private developer at some point in the future. No matter how you slice it, Cibolo residents just got sold out by their elected officials. They’ve lost control of FM 1103, the ability to determine the toll rates, the route, the exits, the overpasses, the toll collection procedures, and a whole bunch more. Taxpayers will be paying for extra consultants and legal haggling for the foreseeable future. Accountability at the ballot box will now be your only recourse. Sadly, there are no remaining pain-free options.
Note to Trump: Key states tossed pro-toll incumbents
Link to article here.
Trump take heed: Toll roads a factor in Florida, North Carolina, and Texas election
By Terri Hall
November 9, 2016
Selous Foundation for Public Policy Research
With the historic election of Donald Trump to the American Presidency, it signals a total repudiation of the political establishment by the working class. You could call it the election of the American worker. But analysts would be remiss if they failed to overlook how toll roads played a part in several races in key states.
One of the most notable races is for governor in North Carolina — must-win state for Trump that went red. Yet, Republican Governor Pat McCrory is in a nail biter photo finish to retain his seat in a state that went Republican last night. The very real threat by Democrat Roy Cooper who claimed victory Wednesday morning, though most still believe the race too close to call, is in part due to McCrory losing support among his base thanks to his approval of the controversial public private partnership (P3) toll project on Interstate-77 in Charlotte.
Citizens lost their battle in the courts and the legislature to stop the state from handing the public’s vital interstate over to the control of a private, foreign corporation in a 50-year deal.
Then, the focus turned to Governor McCrory to cancel the contract. Cooper, the current Attorney General, said in the Charlotte Business Journal in August that McCrory would have “to admit now that he cut a bad deal for North Carolina. He should stop stalling and cancel this contract that never should have been signed to begin with.” McCrory didn’t budge to his own peril.
In Florida, another must-win state that went red for Trump, former House Transportation Committee Chairman, Congressman John Mica lost his seat to newcomer Stephanie Murphy. While some blame his defeat on redistricting bringing in more minority voters to his suburban district, Mica lost touch with his base due in part to his longstanding support for toll roads, particularly P3s. Mica brought tolls to I-4 using congestion pricing, forcing drivers to pay a premium to drive during peak hours. The hidden tax hurts suburbanites harder than urban dwellers since they experience longer commutes and pay more in tolls. He failed to stop the toll bloodletting when taxpayers revolted. So the untold story in this race is about the rise of the middle class worker struggling to make ends meet amidst stagnant wages, staggering health premiums, and ever growing taxes.
In Texas, a state without which no Republican can win the White House, Dallas State Representative Kenneth Sheets also became tone deaf to his conservative base on toll roads. The Dallas-Ft.Worth metroplex is ground zero for toll managed lane projects and soon will boast the largest managed lane network in the country. Taxpayers are none too happy. Though Sheets didn’t go all-in for tolling, he cozied up to the establishment, played footsy with too many controversial bills, scored poorly on legislative report cards, and lost his base. As a result, Sheets lost his seat to Democrat Victoria Neave, who said tolls are a hidden tax and should not advance without local support.
Now back to Mr. Trump. Days before the election, Trump announced his plan to rebuild our crumbling infrastructure without raising taxes by harnessing the private sector. Voters in these key states know that’s code for P3s and toll roads. They’re not fooled into thinking tolls are not a tax. Their pocketbooks have already been sufficiently raided enough to know the dangers of handing the sovereignty over our public roads to private for-profit companies who are given a blank check to charge punitive tolls during congested periods.
Trump’s anti-free trade message resonated because it hurt the American worker. Tolls likewise, hurt the American working class — and hard. Considering these three must-win states for a Republican president just tossed incumbents over toll projects, voters trust Mr. Trump will read the tea leaves and advance a transportation vision and policy that’s pro-freedom, pro-taxpayer, and pro-worker. Voters need to watch closely who he appoints as Transportation Secretary.
Former governors like Rick Perry made road privatization and tolls the centerpiece of his transportation policy for 14 years, and he’s vying for a position in the new Trump administration. Perry would be a disastrous choice considering Texans just elected a new Governor Greg Abbott who campaigned against toll roads and has made a marked departure from privatization. Americans expect Trump to surround himself with like-minded advisers who will set a course consistent with his campaign message. Millions will be watching and waiting.