TxDOT gins-up shortfalls to get legislators' attention…it worked!

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Perry, Dewhurst at odds over TxDOT funding status
By Patrick Driscoll
and Peggy Fikac

On the eve of a legislative hearing on whether the Texas Department of Transportation is going broke or crying wolf, the state’s top two leaders squared off on opposite sides.Lt. Gov. David Dewhurst said TxDOT has some explaining to do about massive construction cutbacks, which some claim are a ruse to pressure state lawmakers into backing off last year’s restrictions on private-sector financing of toll roads.

Dewhurst called the Senate finance and transportation committees into a hearing today, set for 9 a.m. in Room E1.036 of the Capitol Extension, to find out why TxDOT says it’ll be $3.6 billion in the hole by 2015 when it can sell $9 billion in bonds.

“I am concerned the forecasting sheet used to produce that number does not show the complete financial picture,” he said in a letter Friday to Hope Andrade, chairwoman of the Texas Transportation Commission, which oversees TxDOT.

But Gov. Rick Perry, who appoints the commission and is devoted to tolling and private investments as the best way to pay for new highway lanes, believes state lawmakers have dropped the funding ball.

“The governor wants a long-term solution” and has put forth ideas, Perry spokesman Robert Black said. “It’s time for the Legislature to step up and do the same.”

Today’s hearing on TxDOT is just the latest round of the scrutiny, which intensified a year ago and continues to get hotter as toll critics burn the ears of officials.

Also Monday, Assistant District Attorney Beverly Mathews of the Travis County District Attorney’s office said the office is investigating a complaint that TxDOT illegally lobbied and promoted toll roads.

“We have opened an investigation,” Mathews said, declining to give details.

Terri Hall of Texans Uniting for Reform and Freedom, which filed a civil lawsuit on the issue last year, said it’s about time.

“A big fat yippee,” she said. “People are so fed up with TxDOT, which is so out of control.”

TxDOT officials say they did nothing wrong.

Perry and TxDOT’s widespread push to use toll roads to make up for frozen gas taxes being swallowed by inflation hit a rough patch last year. Many lawmakers who previously passed enabling toll bills had since become skittish over public outcries.

Last year’s Senate Bill 792 reined in toll and privatization plans and called for a committee to study private financing. TxDOT also is going through a sunset review.

Before the 2007 legislative session ended, the agency began warning of a looming financial crisis. Officials blamed federal cutbacks, diversions of state road funds, inflation and the Legislature’s toll restrictions.

By November, TxDOT said it will have to slash spending for engineering and land purchases and stop any new construction after Feb. 1.

The agency has delayed $135 million worth of projects in the San Antonio region, including $64 million in Bexar County. Other areas saw similar cuts, such as an estimated $276 million in four counties in and around Houston.

Dewhurst said TxDOT should have told legislators about such problems last year. He also pointed out that lawmakers passed $3 billion in highway fund bonds, got voter approval for $5 billion in general obligation bonds, and that $1.3 billion in Texas Mobility Fund bonds still may be available.

“At the committee hearing,” he wrote to Andrade, “I hope to see that TxDOT has provided a cash forecast sheet that includes all the financial tools.”

Black said the $5 billion figure is fiction because the Legislature hasn’t authorized debt service, which could happen in 2009. And TxDOT did count the $1.3 billion in its projections.

But Perry advised the agency not to issue the $3 billion.

“Because it’s a Band-Aid,” Black said. “It is yet another short-term fix that will only put us into debt further because it is building something today we’ll have to pay for tomorrow.”