US 281 ranks most “stressful” congested road in state of Texas

Link to article here.

US 281 most "stressful" congested road in Texas
By Terri Hall, Examiner.com
September 7, 2011

Well, commuters in the US 281 corridor north of Loop 1604 in Bexar County have been saying this for nearly a decade, but now the Texas Transportation Institute’s 100 Most Congested Roads List for 2011 confirms it. US 281 in Bexar County tied a segment of I-35 in Ft. Worth for the top spot as the state's most congested road using its Commuter Stress Index (CSI), which measures the most congested direction of each peak period. That means it ranks even higher than the parking lot known as I-35 in Austin!

US 281 also moved up in its overall ranking on the 100 Most Congested Roads List to 21, up from 38. In Bexar County, 1604 dropped out of the Top 50 and was replaced by segments of I-35 as being in the top 50 most congested roads overall (considering Loop 1604 has stoplights on it and I-35 does not, that doesn't pass the smell test). Loop 1604 dropped to 74.

It’s the funding, stupid
To take a saying from a past presidential campaign, “It’s the economy, stupid,” the same could apply to US 281 -- it’s all about the funding. A little history is in order. In public hearings in 2001, commuters were promised an improvement plan (virtually the same one that’s being promoted today, except now every highway mainlane would be tolled instead of non-tolled) to add a lane each direction and build overpasses and frontage roads where needed. The cost to the county line was $100 million in 2003 & 2004 dollars. But in 2003, Governor Rick Perry and the Texas Legislature turned to toll roads, including tolling existing free lanes, to make-up for shortfalls. In July 2004, the local Metropolitan Planning Organization (MPO) fell in line and voted to turn US 281 into a toll road (then Bexar County Commissioner Lyle Larson being the only dissenting vote).

In 2007, former District Engineer David Casteel affirmed $102 million was available to fix US 281. At least $48 million in gas taxes to fix the first three miles were in the MPO’s plan up until 2008 when the funds disappeared and were spent elsewhere. According to MPO bylaws, US 281 should be the first project to get its funding restored. Once the toll authority (Alamo Regional Mobility Authority or ARMA) got a hold of the project, the cost has skyrocketed to $475 million (see MPO's TIP), despite highway construction costs plummeting.

In fact, the Chief Financial Officer of the Texas Department of Transportation (TxDOT), James Bass, announced in a simulcast last Thursday, that there is $200 million in underruns available to help fund highway projects. Underrun means highway bids are coming in LOWER than TxDOT’s projected cost estimates, leaving surpluses. This is in addition to $3 billion in Prop 12 bonds the legislature approved during the 81st legislative session. Of that $3 billion, San Antonio district will receive only $143 million. Oh, but the mantra remains the same from TxDOT and ARMA bureaucrats - “There’s no money to fix 281 without tolls. That $144 million is a ‘drop in the bucket’ compared to the $475 - $485 million needed” (the new estimated price is closer to $485-$505 million!).

Environmental hurdles or excuses?

The other excuse we hear is that US 281 won’t have environmental clearance in time to use the Prop 12 bonds (ARMA says December 2013, Prop 12 bonds need to be used by August 2013). Conveniently for them but not so conveniently for taxpayers and congestion weary commuters, the ARMA controls the 281 environmental study and controls the timeline for completion.

The tolling authority only benefits if 281 is a toll road, not a free road. When the fox is guarding the henhouse, it’s no wonder the ARMA predicts clearance won’t happen until after the Prop 12 deadline passes to ensure revenue sources won’t be available to fix 281 without tolls. Due to this bias by TxDOT and the ARMA, $51 million of the $144 million in Prop 12 bonds have already been directed to “operational improvements” to onramps and exit ramps on I-35, not to the bigger problem of US 281.

Leadership vacuum
Aside from longstanding anti-toll advocates Commissioner Tommy Adkisson and State Representative Lyle Larson, what local leaders will step up to the plate and get 281 fixed without tolls as was promised way back in 2001? Who will move heaven and earth to ensure Prop 12 and other revenues don’t slip away due to a three month window the toll authority plans to exploit in its favor? No one has a crystal ball to know how long the clearance process will take once it reaches the feds, but Texas law now gives TxDOT and local entities a way to expedite projects....if they WANT to.  Plus, the feds demonstrated a willingness to fast-track projects with time-sensitive deadlines as they did with the stimulus ‘shovel-ready’ deadlines.

San Antonio has NO representation on the Texas Transportation Commission. Governor Perry appoints the Transportation Commissioners. The Chairwoman, Deirdre Delisi, also happens to be one of the folks named to help run Perry’s presidential campaign. Does anyone else see a huge conflict of interest with the sitting Chair of the Texas Transportation Commission running Perry’s political campaign, especially with Perry’s pay-to-play crony capitalist track record? How easy to steer road contracts to those who Perry might tap to fund his presidential bid.

However, the Speaker of the Texas House, Joe Straus, hails from San Antonio and he virtually controls the pursestrings to the state budget, yet San Antonio continues to get short shrift when it comes to highway funding. As an example, Laredo received $262 million in Prop 14 bonds compared with San Antonio’s $34 million! These types of snubs have gone on for far too long. Could it be because San Antonio has been the one Texas city that has kept toll roads at bay?

One thing’s certain, San Antonio is being discriminated against for not embracing toll taxes, and of the funds it has been getting, they’ve gone to fund everything BUT the biggest congestion problem in the state of Texas, US 281. They’re without excuse. The record shows they’ve sit idly by and let it happen. Now is the time to set our transportation course aright. The failure of our leaders to get this right will most assuredly come back to haunt them.

For more information:

For ranking by Commuter Stress Index:
http://apps.dot.state.tx.us/apps/top_100/list.htm?item=15

For overall ranking of 100 Most Congested Roads by Texas Transportation Institute:
http://apps.dot.state.tx.us/apps/top_100/


Continue reading on Examiner.com US 281 ranks most “stressful” congested road in state of Texas - San Antonio Transportation Policy | Examiner.com http://www.examiner.com/transportation-policy-in-san-antonio/us-281-ranks-most-stressful-congested-road-state-of-texas#ixzz1Xk9KDitK

Perry's NAFTA Superhighway problem

Link to article here.

Rick Perry's NAFTA Superhighway Problem

By Rachel Alexander
8/12/2011
Townhall.com

Move over Mitt Romney. Rick Perry has a bigger problem to defend from his tenure as governor. Remember the NAFTA Superhighway project? It was to consist of a two-mile wide $184 billion transit system of toll roads, rail lines and utilities from the Texas-Mexico border all the way up to the Minnesota-Canadian border, to make it easier to ship foreign goods from China and other countries into North America. It became so unpopular in Texas that the Texas portion of it, called the Trans-Texas Corridor, was renamed and mostly disbanded a couple of years ago. Perry was the only gubernatorial candidate in 2006 of four major candidates who supported it. Even the Democratic candidate opposed it.

Perry’s campaign website lists the Trans-Texas Corridor as one of his accomplishments, “Rather than taking decades to expand these important corridors a little bit at a time, Governor Perry developed the Trans-Texas Corridor plan.”But is it something Perry really wants broadcast as an achievement? The Texas Republican Party’s 2010 platform includes a plank specifically opposing the Trans-Texas Corridor. Some of the opposition to the NAFTA Superhighway has been dismissed as conspiratorial, but loud objections also came from people concerned with border security and one million rural interests and farmers that stood to lose their land to eminent domain.

Construction of the Trans-Texas Corridor began in 2007. Perry received substantial campaign contributions from the companies expected to benefit from the construction, Cintra Concesiones de Infraestructuras de Transport and Zachry Construction Company. Cintra is a Spanish-owned company that would own the toll roads. This arrangement has been accused of being a hidden tax payable to a foreign corporation. Zachry was selected by the Texas Department of Transportation to construct the Trans-Texas Corridor. Perry initially opposed efforts by the Texas legislature to impede the construction, vetoing several bills. As opposition increased, the legislature was finally able to repeal the section of the Transportation code dealing with the Trans-Texas Corridor and pass an eminent domain bill protecting property. The TTC-35 project, a privately built multi-lane toll road, railway and utility line network that was to run parallel to Interstate Highway 35, was canceled. Perry finally backed down in the 2010 Republican primary for governor running against Kay Bailey Hutchinson, and opposed construction of the TTC-35.

NAFTA and expanding free trade sounds good superficially. Unfortunately, it has turned out to be considerably less than free. New York Times best-selling author Jerome Corsi, known for orchestrating the Swift Boat ads targeting John Kerry, wrote a book exposing the NAFTA Superhighway in 2009 called “The Late Great USA: The Coming Merger with Mexico and Canada.” Corsi’s efforts, as well as exposure by Rep. Ron Paul (R-TX) and the website Corsi writes for, WorldNetDaily, may have contributed more to getting the Trans-Texas Corridor shut down than anything else.

Corsi explains in his book that the U.S. is at a disadvantage with “free trade” because unlike most of the world’s international trading countries, we do not charge a value added tax (VAT) to imported goods. This makes our products much more difficult to sell overseas, and other countries’ products much cheaper than ours. The price of union labor drives the costs up even more, making our own products less competitive here as well. This results in a trade imbalance leaving us heavily in debt to other countries, and part of the reason we have a debt ceiling crisis today.

With the economy currently in the tank and nine percent unemployment holding steady, the last thing Americans want is enabling China to sell us more products using cheap exploited labor. Corsi writes that the average age of a worker in a Chinese toy factor is between 12 and 15. The CANAMEX Corridor Coalition, a trade association that supports a transportation super corridor, reports that the average hourly manufacturing wage in the U.S. is $17.20. In Mexico it is $2.10, and in China and India it is $.25.

Furthermore, Corsi has put forth a compelling amount of information in his book showing how the plan to create a North American Union goes well beyond simple free trade agreements and purposely disguises efforts to subvert U.S. sovereignty to an entity that would operate much like the European Union.

Perry is hoping the NAFTA Superhighway quietly fades away. But has it really gone away? The controversial financing mechanism behind it that leases right-of-way to a private company – often Cintra – is still being used for freeways. That funding, known as Comprehensive Development Agreements, was recently used to build a toll road bypass to the Austin area, SH 130, considered part of the Trans-Texas Corridor. Trucks on Interstate 35 are still a big problem during rush hour in Dallas, Austin and San Antonio, so eventually a separate road will need to be built for them similar to what the Trans-Texas Corridor called for. On July 6, the Obama administration struck a deal with Mexico to re-open access to the U.S. for certified Mexican truckers.

Perry already has a record that hurts him with voters concerned about illegal immigration. In April, he stated that he would not support a version of Arizona’s SB 1070 for Texas. In 2001, he signed a bill allowing the children of illegal immigrants to receive in-state tuition at Texas universities. He opposes using E-Verify, the federal electronic system for verifying prospective workers’ immigration status.

Unlike Romney, Perry has not completely disavowed his controversial history as governor. Romney distanced himself from Mass-Care by promising that the first Executive Order he would sign upon becoming president would be a waiver to all 50 states from Obamacare. Perry, on the other hand, proudly lists Trans-Texas Corridor as one of his accomplishments on his website. The state of Texas, multiple factions within the Republican Party, and significant numbers of Democrats oppose the Trans-Texas Corridor. They are not going to sit back and risk repeating an “accomplishment” like this on a national scale. Former president George W. Bush, who was also a Texas governor, was one of the biggest proponents of the NAFTA Superhighway. Voters have the hindsight now to realize that the NAFTA Superhighway is the wrong direction for our country.

Rachel Alexander

Rachel Alexander is the editor of the Intellectual Conservative.

Law professor blasts privatization of roads, parking meters

Link to article here.


Law Review Blasts Toll Road, Parking Meter Privatization
Minnesota Law Review examines the limitations on toll road and parking meter privatization deals.
The Newspaper.com

Julie A. RoinA University of Chicago Law School professor is challenging the prevailing wisdom regarding the sorts of transportation privatization deals that have grown increasingly popular. The Minnesota Law Review last month published a critique by Julie A. Roin that argued such deals have more in common with the medieval practice of tax farming than true privatization. She cited as a primary example Chicago, Illinois Mayor Richard M. Daley's 2008, lease of the city's parking meters to Morgan Stanley for 75 years in return for an up-front payment of $1.2 billion.

"The agreement exchanges future public revenues for present public funds, just like debt," Roin explained. "And just like many debt arrangements, the parking meter deal will leave future ratepayers decidedly worse off... Future ratepayers will be doubly disfavored relative to current residents: they will have to pay higher taxes to maintain the same level of services, even as their disposable income is reduced by the extra parking fees mandated by the agreement."

By the time Daley left office, nearly all of the funds from the one-time payment had been spent, mostly to meet the city's requirement to have a balanced budget. Roin argued that such deals are frequently used to avoid state constitutional restrictions that require voter approval of any substantial new governmental debt obligation.

"Many recent privatization deals have been motivated less by the possibility of achieving efficiency advantages than by politicians' desire to surreptitiously borrow money," Roin wrote. "The upfront payments received by jurisdictions entering into privatization agreements... are, at best, the present value of what would have been future tax (fee) revenue. Rather than true privatization transactions, it is more accurate to describe these deals as loans repayable out of future governmental revenues."

The problem with the debt created by such deals is that they are less flexible and more expensive than conventional forms of debt, such as bonds. They are also significantly less transparent. Traditional debt in the form of publicly traded bonds harnesses market forces to ensure both sides get the best deal possible. Privatization arrangements inherently favor the corporate interest.

"Because of the scale of these transactions, relatively few potential buyers exist for any particular deal," Roin wrote. "This leaves opportunities for collusion or simple underpricing at the expense of the selling entity. In Chicago's parking meter deal, for example, only two bidders vied for the project. Although one can certainly claim that there was a fair public auction of the Chicago parking meter system in that anyone could have entered the auction, the paucity of bidders can also be regarded as a symptom of a defective market, one susceptible to control by insiders or other elites and simply too thin to be trustworthy."

Cities and states also get the worse end of the deal from non-monetary arrangements such a "non-compete" clauses in privatization contracts. These protect private profit at the expense of flexibility in future public policy. Chicago's deal, for example, guarantees the number of parking spaces and hours of operation that apply 75 years in the future. Roin suggested such deals might be discouraged by limiting the length of contract terms to, for example, no more than five years.

"Robbing Peter to pay Paul accomplishes very little when Peter and Paul are the same individual," Roin observed.

Such a simplistic limitation, however, would likely lead to governments not getting the best deals for certain long-term transactions. Roin suggested better legislation would protect future taxpayers by forcing any such deals to escrow funds equal to the amount of taxes or fees that would have been generated by the leased asset. These funds would be released year-by-year so that the present generation would not be borrowing from a future generation. Roin argued that without some limitation, such deals would grow more intrusive.

"In the not-so-eventual future, jurisdictions may even 'sell' the rights to collect property and income taxes to investors alleging better collection techniques and expressing a willingness to accept the risk that future revenues will fall," Roin wrote.

Source: Privatization and the Sale of Tax Revenues (Minnesota Law Review, 7/7/2011)

Perry using gas taxes to pay for security detail

Link to article here.

"While Perry pays for most of his travel from his campaign account and donated funds, costs for the security detail are paid largely out of the state highway fund, derived from a gasoline tax and vehicle registration fees."

So as Rick Perry gallivants around the country running for President, he's spending our scarce gas taxes to pay for his security detail, gas taxes he claims have run out and can longer keep up with paying for roads. Perry has used this argument to justify charging Texans new toll taxes to access their public roads, including selling Texas sovereign roads to foreign entities and slapping tolls on existing roads. Perry is conveniently starving Texans' gas taxes that are needed for roads by using them to fund his security detail on the campaign trail instead of working in his office in Texas where security costs aren't near as costly to taxpayers. More hypocrisy from a man who claims to be a 'fiscal conservative.'

Who’s paying Perry’s security costs?

By Sari Horwitz
Washington Post
Saturday, Aug 27, 2011

Since Rick Perry joined the presidential race this month, his campaign entourage has included not just the standard array of political advisers and aides, but a squad of Texas law enforcement agents.

The security forces scout and secure locations days in advance. Well before the governor’s visit to Tommy’s Country Ham House in Greenville, S.C., the weekend of Aug. 20, more than a half-dozen suited and armed agents were giving orders to the crowd of more than 400.

How much is this ever-present phalanx of state policemen costing the taxpayers of Texas? They won’t know at least until after next year’s presidential election, thanks to a provision, tucked into a school finance bill in July, that will keep the governor’s travel records sealed for 18 months.

Although security around public officials has been tightened considerably since the Sept. 11, 2001, terror attacks, the secrecy that surrounds Perry’s travels is unique, according to Ken Bunting, executive director of the Missouri-based National Freedom of Information Coalition.

And the governor’s critics contend that it has as much to do with politics as safety — especially after the embarrassment for Perry when taxpayers learned that they had been paying for scuba gear and golf cart rentals for officers who accompanied Perry and his wife to the Bahamas in 2004.

“I’m appalled,” said Democratic state Rep. Lon Burnam. “He wants to keep the details buried when he goes to the Bahamas.”

Indeed, this is a battle that has been raging since long before Perry decided to run for president.

Texas newspapers have tried for years to see Perry’s travel records, which would include the costs of the governor’s security detail. But the state Department of Public Safety, run by Steve McCraw, a former FBI official and a longtime Perry friend, has said that the safety of Perry and his family could be jeopardized if the public knew how many officers accompany them, where they stay and Perry’s traveling patterns.

After the Houston Chronicle, San Antonio Express and Austin American-Statesman sued the DPS, two Texas courts ruled that the records should be released. They were overturned last month by the state Supreme Court. But the case is still alive: the Supreme Court sent it back to a lower court, ordering DPS to cite precisely which records would put Perry in danger if they were released.

In the meantime, during a special session that ended July 1, the Texas Legislature, at Perry’s urging, added language to a school finance bill that will seal the governor’s travel records for 18 months — until after the 2012 presidential election. The measure would cover the records going forward, not those in the past, which have been the subject of the court fight.

One Republican legislator, who spoke on condition of anonymity, described the governor as “extremely concerned” about keeping his records sealed, and said Perry was actively lobbying key legislators to get it passed in the waning days of the special session. The legislator said Perry’s wife, Anita, also was pressing legislators on the issue.

The move to seal the records has drawn criticism from Republicans as well as Democrats.

“The money belongs to the people of Texas and they need to have an account of it,” said state Rep. David Simpson (R), a freshman from Longview who was elected with tea party backing. “You can do this without jeopardizing security.”

State officials say they do provide summaries of the information for an array of top officials, but not the specifics, citing security concerns.

“The governor believes that we need to strike the right balance of transparency and accountability to taxpayers while maintaining a priority on security,” said Catherine Frazier, a spokeswoman for Perry.

Before Perry’s travel records were sealed, Texas newspapers were able to shed some light on his travel and the cost to taxpayers, including the Bahamas trip.

The records, reported in 2005 by the Austin American-Statesman, showed that Perry and staff members had traveled the previous year to the Bahamas for a meeting with top campaign donor James Leininger, a supporter of public school vouchers and charter schools, his wife, and Grover Norquist, a national anti-tax advocate. The records showed $4,200 in taxpayer money was spent for the squad of six state troopers who went along, including costs for renting scuba gear, golf cars and cellphones, according to the newspaper.

Perry said later that the trip was to discuss education policy and finance with his political and technical advisers “in a setting removed from daily distractions.”

In 2009, Perry traveled to Israel where he was given the “Defender of Jerusalem” award. According to a local television report, he and his wife flew first class at more than $5,000 per ticket, paid for by an energy company financier. Four security detail officers also went on the five-day trip at a cost of more than $70,000 to taxpayers. The expenses included $17,000 for rooms at the King David Hotel, nearly $13,000 for food and more than 350 hours in overtime pay.

Perry has said in the past that most of his frequent international travel has been to promote Texas and draw business to the state.

Open-records advocates in Texas say taxpayers have a right to know the costs of Perry’s security detail and the trips, especially long after the travel has occurred.

“The Perry administration is trying to hide the true cost of his out-of-state travel to the taxpayer,” said Craig McDonald of Texans for Public Justice.

State Rep. Charlie Geren (R), the House Administration Committee chairman, said the provision to seal the records came largely at the insistence of DPS head McCraw. McCraw was appointed to his post by a commission of Perry appointees shortly after a fire was set at the governor’s mansion in 2008.

The fire, which almost destroyed the 153-year-old mansion, was started by an unidentified person who tossed a Molotov cocktail on the front porch. No one was in the home, which had been closed for renovation.

While Perry pays for most of his travel from his campaign account and donated funds, costs for the security detail are paid largely out of the state highway fund, derived from a gasoline tax and vehicle registration fees.

This email address is being protected from spambots. You need JavaScript enabled to view it.

Staff writers Philip Rucker and Karen Tumulty and news researcher Alice Crites contributed to this report.

Perry's crony capitalism problem & 'jobs' claims

Link to article here.

More reasons to question Rick Perry's fitness to lead the free world....three articles appear below, two on Perry's crony capitalism and another on Perry's claims regarding job creation -- most of the jobs created were public sector government jobs, not private sector jobs.

Rick Perry's Crony Capitalism Problem

The presidential candidate's signature economic development initiative has raised questions among conservatives.

By  CHARLES DAMERON

Wall Street Journal
August 13, 2011

Gov. Rick Perry's presidential pitch goes something like this: During one of the worst recessions in American history, he's kept his state "open for business." In the last two years, Texas created over a quarter of a million jobs, meaning that the state's 8% unemployment rate is substantially lower than the rest of the nation's. The governor credits this exceptional growth to things like low taxes and tort reform.

It's a strong message. But one of the governor's signature economic development initiatives—the Texas Emerging Technology Fund—has lately raised serious questions among some conservatives.

The Emerging Technology Fund was created at Mr. Perry's behest in 2005 to act as a kind of public-sector venture capital firm, largely to provide funding for tech start-ups in Texas. Since then, the fund has committed nearly $200 million of taxpayer money to fund 133 companies. Mr. Perry told a group of CEOs in May that the fund's "strategic investments are what's helping us keep groundbreaking innovations in the state." The governor, together with the lieutenant governor and the speaker of the Texas House, enjoys ultimate decision-making power over the fund's investments.

Among the companies that the Emerging Technology Fund has invested in is Convergen LifeSciences, Inc. It received a $4.5 million grant last year—the second largest grant in the history of the fund. The founder and executive chairman of Convergen is David G. Nance.

In 2009, when Mr. Nance submitted his application for a $4.5 million Emerging Technology Fund grant for Convergen, he and his partners had invested only $1,000 of their own money into their new company, according to documentation prepared by the governor's office in February 2010. But over the years, Mr. Nance managed to invest a lot more than $1,000 in Mr. Perry. Texas Ethics Commission records show that Mr. Nance donated $75,000 to Mr. Perry's campaigns between 2001 and 2006.

 
 
The regional panel that reviewed Convergen's application turned down the company's $4.5 million request when it presented its proposal on Oct. 7, 2009. But Mr. Nance appealed that decision directly to a statewide advisory committee (of which Mr. Nance was once a member) appointed by Mr. Perry. Just eight days later, on Oct. 15, a subcommittee unanimously recommended approval by the full statewide committee. On Oct. 29, the full advisory committee unanimously recommended the approval of Convergen's application. When asked why the advisory committee felt comfortable recommending Convergen's grant, Lucy Nashed, a spokesperson for Mr. Perry, said that the committee "thoroughly vetted the company."

Starting in 2008, Mr. Perry also appropriated approximately $2 million in federal taxpayer money through the auspices of the Wagner-Peyser Act—a federal works program founded during the New Deal and overseen in Texas by Mr. Perry's office—to a nonprofit launched by Mr. Nance called Innovate Texas. The nonprofit was meant to help entrepreneurs by linking them to investors. It began receiving funding on Dec. 31, 2008, soon after Mr. Nance's previous company, Introgen Therapeutics, declared bankruptcy on Dec. 3. According to state records, Mr. Nance paid himself $250,000 for the two years he ran Innovate Texas. Innovate Texas, whose listed phone number is not a working number, could not be reached for comment. (Two phone calls left for Mr. Nance at Convergen's offices went unreturned.)

ThromboVision, Inc., a medical imaging company, was also the recipient of an award from the Emerging Technology Fund: It received $1.5 million in 2007. Charles Tate, a major Perry contributor, served as the chairman of a state committee that reviewed ThromboVision's application for state funding, and Mr. Tate voted to give ThromboVision the public money. One month after ThromboVision received notification that it would receive a $1.5 million state grant in April 2007, Mr. Tate invested his own money in ThromboVision, according to the Dallas Morning News. The Texas paper later found that by 2010 Mr. Tate owned a total of 200,000 preferred shares in ThromboVision.

pd0623
Associated Press
Texas Gov. Rick Perry

to a Texas state auditor's report, ThromboVision failed to submit required annual reports to the fund from 2008 through 2010, when the company went bankrupt. The report noted the tech fund's managers were "unaware of ThromboVision, Inc.'s bankruptcy until after the bankruptcy had been reported in a newspaper." ThromboVision's bankruptcy filing revealed not only that Mr. Tate had been a preferred shareholder in ThromboVision, but so had prominent Perry supporter Charles Miller, who owned 250,000 preferred shares in the company and has donated $125,000 to the governor's campaigns. Three phone calls and an email seeking Mr. Tate's side of the story went unreturned.
All told, the Dallas Morning News has found that some $16 million from the tech fund has gone to firms in which major Perry contributors were either investors or officers, and $27 million from the fund has gone to companies founded or advised by six advisory board members. The tangle of interests surrounding the fund has raised eyebrows throughout the state, especially among conservatives who think the fund is a misplaced use of taxpayer dollars to start with.

"It is fundamentally immoral and arrogant," says state representative David Simpson, a tea party-backed freshman from Longview, two hours east of Dallas. The fund "opened the door to the appearance of impropriety, if not actual impropriety."

In April, the state auditor's office called for greater transparency in the fund's management, and some legislators began looking for ways that the fund might be reformed. With the state facing a $27 billion budget shortfall in the last legislative session, Mr. Simpson filed a motion in the Texas House in May to shutter the fund and redirect the money to other portions of the budget. That measure passed 89-37 to cheers from the chamber. But the fund was kept alive by the legislature's conference committee. The fund currently has $140 million to spend, according to the governor's office.

Michael Quinn Sullivan, the president of Texans for Fiscal Responsibility, sees in the Emerging Technology Fund a classic example of the perils of government pork. "The problem with these kinds of funds is that even when they're used with the best of intentions, it looks bad," says Mr. Sullivan. "You're taking from the average taxpayer and giving to someone who has a connection with government officials."

Mr. Dameron is a Robert L. Bartley Fellow at the Journal.

___________________________________________________________________

Link to article here.

Rick Perry, Big Government, and Big Business
byTimothy P. Carney Senior Political Columnist
Washington Examiner
August 15, 2011
Follow on Twitter:@tpcarney


"Pro-business" doesn't always equal pro-free-market, as Rick Perry's record shows.

We already know about the time Perry mandated the vaccine Gardasil for all teenage girls, at the time his former chief of staff was a lobbyist for Gardasil's maker, Merck. Charles Dameron at the Wall Street Journal recounts another crony-capitalist element in Perry's jobs agenda:

The Emerging Technology Fund was created at Mr. Perry's behest in 2005 to act as a kind of public-sector venture capital firm, largely to provide funding for tech start-ups in Texas. Since then, the fund has committed nearly $200 million of taxpayer money to fund 133 companies. Mr. Perry told a group of CEOs in May that the fund's "strategic investments are what's helping us keep groundbreaking innovations in the state." The governor, together with the lieutenant governor and the speaker of the Texas House, enjoys ultimate decision-making power over the fund's investments.

All told, the Dallas Morning News has found that some $16 million from the tech fund has gone to firms in which major Perry contributors were either investors or officers, and $27 million from the fund has gone to companies founded or advised by six advisory board members. The tangle of interests surrounding the fund has raised eyebrows throughout the state, especially among conservatives who think the fund is a misplaced use of taxpayer dollars to start with.

Of course, Mitt Romney has similar problems. And Barack Obama? Well, he's got enough corporatism and crony capitalism to fill a book.

___________________________________________________________________

Link to article here.

CHART OF THE DAY: *Government* Jobs Led To Perry’s Economic Boom

Brian Beutler | August 17, 2011, 2:23PM

Talking Points Memo

 
Gov. Rick Perry (R-TX)
Read More

Jared Bernstein, Jobs, Rick Perry, Stimulus, Texas

On the campaign trail, governor Rick Perry will claim credit for the so-called Texas miracle. His state weathered the housing and jobs crises better than many others, and he'll happily tell voters it was the result of his small government conservative approach to running things.

But his state's relative success has a lot to do with things out of his control -- population growth resulting from an influx of immigrants from Mexico and of workers and retirees from other U.S. states, and high oil company profits, to name just a couple. Oh, and also federal stimulus.

What's that you say?!

Despite being one of the loudest critics of President Obama's stimulus, Perry used billions of dollars of federal money to patch Texas' budget shortfalls, and was thus able to create and maintain lots and lots of public sector jobs. In fact, if you look at net job creation between 2007 and 2010, it's clear the only thing keeping Texas buoyant was government jobs.

Check out the below chart from Jared Bernstein -- a fiscal policy expert at the Center on Budget and Policy Priorities, and former chief economist to the stimulus bill's top cop, Vice President Joe Biden. It shows pretty conclusively that the recession cost Texas 178,000 private sector jobs -- a fairly small share for a populous state, when you consider that crisis cost the country many millions. But in the same period, it added 125,000 public sector jobs -- nearly half of all government jobs created in this period nationwide. Put together, the Texas has only lost 53,000 jobs total during the downturn.


As Bernstein notes this "shows Texas to be following a traditional Keynesian game plan: as the private sector contracts, turn to the public sector to temporarily make up part of the difference."

Additionally, Perry's papered over some looming budget gaps with fancy paperwork, and unless he or the next governor take steps (like raising taxes) to balance the books, he'll have to cut spending (read: public sector jobs) and many of his gains will have proved illusory.

That's doesn't match Perry's private market, anti-government rhetoric very well, which is why he and his supporters will shout "Texas miracle!" if they're confronted with these facts, to obscure the underlying reality.

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Open Letter to Rush & Hannity: Steer clear of Rick Perry

Note: Sean Hannity went on a tirade against toll hikes in New York and New Jersey. Then in the same show praised Rick Perry as a conservative. Rush has been on the Perry bandwagon along with Glenn Beck. Either these guys don't vet a candidate's conservative credentials before they back 'em or they're going along with the establishment that truly fears an outsider they can't control, like a Ron Paul type of candidate.

Dear Hannity, Limbaugh, and Beck,

There's something you've got to know. I'm a Texan, and Rick Perry is the BIGGEST toll-tax happy Governor in the nation. He's trying to turn every single lane of a highway near my house into a tollway and make us pay TWICE for what's already built and paid for. He's doing it all over Texas with over 500 toll projects being contemplated RIGHT NOW, while he tries to tell America he's cut taxes.

Even worse, he's trying to sell-off our public highway system to foreign companies in public private partnerships or PPPs (right out of the the Agenda 21 playbook). PPPs are sweetheart deals with massive taxpayer subsidies (that socialize the losses and privatize the profits) and charge us 75 cents PER MILE to access our PUBLIC roads.

On one road in DFW that translates to $13/day in new taxes or over $3,000 a year MORE per year just to get to work. Meanwhile, he signed a budget that INCREASED diversions of our state gas taxes to non-road uses (fuel taxes are supposed to be Constitutionally dedicated fund only for roads, so he's violated the Texas Constitution!). That same budget was 'balanced' using accounting gimmicks putting payments to Medicaid and schools into the next budget year to get them off this budget’s books and make it look ‘balanced,’ plus he’s amassed a whopping $31 billion in road debt in just 5 years -- meanwhile State spending has nearly doubled on Rick Perry's watch...yet he claims to be all about upholding the Constitution and purports himself to be a fiscal conservative.

And all this is aside from his biggest albatross....the Trans Texas Corridor. It was to be a 4,000 mile network of toll roads 1,200 feet wide (that's FOUR football fields wide - would have bisected whole communities and displaced 1 million people on just the first corridor) and the biggest land grab in TX history forcibly taking 580,000 acres of private Texans' land and handing it over to a foreign company in one of these PPPs for a HALF CENTURY. Texans rebelled and the legislature finally repealed it, but Perry still lists it as one of his many accomplishments.

If you don't like the unaccountable taxation of toll roads (in the hands of unelected bureaucrats no less), then you won't like Rick Perry. Steer clear. Then there's his corporate welfare slush funds, the HPV vaccine mandate (as a pay-off to campaign donor Merck and its lobbyist, a former Perry staffer Mike Toomey), his weakness on illegal immigration and securing our borders, the revolving door between his aides and those doing business with the state, steering public money and high level appointments to his campaign donors, and the list goes on and on. Perry's rhetoric doesn't match his record.

If you want more info, we Texans have formed a grassroots organization established to fight this stuff: www.TexasTURF.org.

Rick Perry tied to Agenda 21, globalist policies


Rick Perry tied to Agenda 21, globalist policies
Selling Texas to foreign creditors while jabbing Obama for same
By Terri Hall
Founder
Texans Uniting for Reform and Freedom
August 15, 2011

Rick Perry may be good at invoking states rights and property rights, while disavowing ‘foreign creditors,’ but his actions as Texas’ longest serving governor tell a different story. Public private partnerships (or P3s) are part and parcel of the United Nations’ Agenda 21. Two of the purposes of Agenda 21 are to abolish private property and restrict mobility and P3s act as the vehicle to do it. Perry made P3s a centerpiece of his transportation policy since he stepped in as governor.

It started with the Trans Texas Corridor, known at the federal level as high priority corridors, corridors of the future, or the NAFTA superhighways. Just in Texas, it was to be a 4,000 mile multi-modal network of toll roads, rail lines, power transmission lines, pipelines, telecommunications lines and more. It was going to be financed, operated, and controlled by a foreign company granted massive swaths of land 1,200 feet (4 football fields) wide taken forcibly through eminent domain.

Called the biggest land grab in Texas history, it was going to gobble up 580,000 acres of private Texas land (the first corridor alone was to displace 1 million Texans) and hand it over to well-connected global players using P3s, who would gain exclusive rights to determine the route and what hotels, restaurants, and gas stations were along the corridor in a government-sanctioned monopoly for a half century. It was the worst case of eminent domain for private gain ever conceived.

Property rights shredded
The Trans Texas Corridor, and P3s in general, represent an imminent threat to private property rights. While lawmakers repealed the Trans Texas Corridor from state statute only months ago due to the public backlash, the re-named corridor (‘Innovative Connectivity Plan’) and its threat to property rights lives on through P3s. Two such projects underway by a Spanish developer, Cintra, will charge Texans 75 cents per mile in tolls (nearly $13 a day while Perry claims he hasn’t raised taxes or indebted Texans to foreign creditors) to access lanes on two public interstates -- I-635 and I-820. A third project being developed by the same company for two segments on SH 130 is, perhaps, the only leg of the Trans Texas Corridor TTC-35 project that will ever be built.

While Perry distracted Texans and tea partiers with ‘emergency’ resolutions on state sovereignty during the 82nd legislature, P3s spread from transportation projects to virtually every other type of public infrastructure in a bill, SB 1048, passed by the Texas legislature which he signed into law June 17. Now all public infrastructure, including public buildings, schools, nursing homes, ports, mass transit, etc. can be auctioned-off to private interests in long-term sweetheart deals with taxpayer subsidies and profit guarantees using P3s.

P3s give a private corporation the power to tax the public, whether through charging tolls or other so-called ‘user fees,’ to access their own public infrastructure, and, perhaps more insidious,  allowing well-connected private entities to profit from concessions on land taken through eminent domain.

Why shouldn’t the original landowner be able to profit from developing his/her land instead of having the government take it in the name of a “public use” and give it to another developer, one with government connections? Perry’s administration of P3s is like his administration of his Emerging Technology Fund that’s been highly criticized for steering taxpayer money to Perry’s campaign donors -- a case in point, Dan Shelley.

Shelley worked for Cintra, who had its sites set on developing the Trans Texas Corridor. Shelley lands a job as Perry’s aide, steers the $7 billion corridor P3 to his former employer Cintra, then goes back to work for Cintra. That’s how Perry does business -- pay to play.

Texas “Open for Business”
While Perry is staking his campaign on Texas being the top net jobs creator, Perry’s version of Texas being “Open for Business” isn’t about low taxes and less regulation as much as it is about doing business with foreign companies, including selling off Texas’ sovereign land and public assets to foreign creditors, an issue which Perry’s first television ad uses to take aim at President Obama.

Aside from the P3s, Texas has 20 active deals going with the Chinese and has 32 foreign trade zones (FTZs), a vehicle to ease the flow of foreign goods into the United States that are chalk full of tax breaks for importers. Perry’s office promoted these FTZs in a document entitled Foreign Trade Zones: Texas Wide Open for Business and even dedicates a web site for Texas FTZs, www.TexasWideOpenForBusiness.com.

A recent Washington Post article documents Perry’s work to get Chinese government-owned telecommunications company Huawei, to base its U.S. operations in Texas, a company that the U.S. government has deemed a threat to national security noting that “three times since 2008, a U.S. government security panel has blocked Huawei from acquiring or partnering with U.S. companies because of concerns that secrets could be leaked to China’s government or military.”

Perry’s coziness with the Chinese and foreign investors exposes a huge weakness in his right flank -- illegal immigration and open borders. The Trans Texas Corridor has been linked to the global plan to economically integrate North America, with the eventual goal of a common security perimeter modeled after the European Union. Perry ushered in in-state tuition for illegals and has long been an obstacle to immigration reform or any Arizona-style immigration law.

Perry’s record paints a much different picture than what candidate Perry would have us believe -- that he’s a states rights, Constitutionally limited government conservative that’s responsible for the “Texas miracle.” In reality, he’s more like an Agenda 21 globalist willing to sell America to the highest bidder.


Continue reading on Examiner.com Rick Perry tied to Agenda 21, globalist policies - San Antonio Transportation Policy | Examiner.com http://www.examiner.com/transportation-policy-in-san-antonio/rick-perry-tied-to-agenda-21-globalist-policies#ixzz1V8WLRtO9

Credit downgrade may effect toll projects

Credit downgrade may effect toll projects
By Terri Hall
Examiner.com
August 9, 2011

Well, if it’s one thing we’ve learned in the bailout era, it’s that all things financial are interconnected. Following Standard and Poor’s credit downgrade of the U.S., it also downgraded Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are quasi-governmental entities set-up using controversial public private partnerships (or P3s), which have a reputation for lending money to people who don’t have the ability to pay them back.

The same is true of toll projects, especially those done using P3s. For a many years, politicians have been heavily lobbied to turn to P3s to solve their road funding shortfalls, under the auspices that government can fill the gap with some private money. In return, the private entity gets the right to collect tolls in long-term leases, in some cases for up to 99 years as was the case on the Chicago Skyway deal with Cintra-Macquarie.

The bond markets surely see the trend that toll roads are faltering and going bankrupt all over the globe. So the likelihood that they’ll ignore this trend and continue to loan money to either public or private toll entities given the downgrade in the credit-worthiness of the U.S., is slim to nil. Add to that, a recent report by the Office of Inspector General warns that P3s cannot fill the road funding gap, as Congressman John Mica proposes, and it spells trouble for advocates who plan to rely on more toll roads.

From whence will the debt come? Perhaps more importantly, from whence will the money come from to pay it all back, even if government does find a way to borrow more money it doesn’t have?

Clearly we’ve entered into new territory. The days of playing fast and loose with credit and borrowing, and traffic and revenue projections are over. Toll projects, if they’re ever to get off the ground in this climate, had better have traffic projections paved with gold (which is getting harder and harder to do).

In Texas, former Chairman of the House Transportation Committee, Rep. Joe Pickett, testified last year that there are no more toll viable roads in Texas. They’ve all been done. All the remaining toll projects cannot pay for themselves with the projected traffic alone and will involve massive public subsidies to make them solvent. Should taxpayers risk what the private bond investors won’t?

Road debt spirals out of control
At least one former State Representative in Texas is saying ‘no’ to more road debt.  In a recent editorial in the Houston Chronicle, Jim Dunnam notes that with all the talk of the debt ceiling and debt crisis on the federal level, many states, with Texas as a case in point, have a debt crisis of their own.

For the first time in Texas history, taxpayers will be spending more on debt service than it will for new roads. This is Texas Governor Rick Perry’s legacy -- borrowing and spending beyond its means. Texas used to be pay-as-you-go, but under Perry’s leadership, Texas started borrowing money for roads in 2001. The state has gone from zero debt for roads to now owing $31 billion. Most of that borrowing has gone to subsidize toll roads, making taxpayers pay twice to use the same stretch of road.

Dunnam states: “...nearly all of our future infrastructure needs are to be funded by borrowing from the future generation of Texans. In fact, bond rating agencies are already looking negatively upon toll road debt in the states, so even that favored option of (Rick) Perry's will be gone.”

As yet another indication that toll roads and the debt they incur are neither fiscally sound investments nor a means of generating revenue to make-up for road funding shortfalls, the Central Texas Turnpike System has had to subsidize that system to the tune of $100 million. These subsidies are paid with gas taxes, again, double-taxing taxpayers to bailout a toll system that isn’t covering its debt. When subsidies are necessary, tolls become a new hidden tax for roads.

Then there’s the federal borrowing to prop-up toll roads that can’t pay for themselves using a loan program known as Transportation Infrastructure Finance and Innovation Act (TIFIA).  The first federal TIFIA loan went to a P3 venture in San Diego known as the South Bay Expressway. Less than three years later, the road went bankrupt (traffic projections were off by 40,000 cars a day) -- resulting in a loss of nearly $80 million to taxpayers. Now, the local government is going buy back that failing toll road with yet more taxpayer money, which is, in effect, another bailout.

But the tax man still cometh
All of this comes at a time when Americans’ paychecks are shrinking and when energy and food costs are skyrocketing beyond their ability to keep up. Federal Highway Administration statistics consistently show, as the cost of transportation goes up, driving goes down. So add tolls on top of already rising gas prices, and it puts these toll roads on a collision course with economic reality. Of course, the tax man still cometh, too.  So it begs the question, what is the rationale to keep borrowing and spending money for roads beyond what this generation can pay?

Thomas Jefferson warned against such multi-generational debt when he said: “I say, the earth belongs to each of these generations during its course, fully and in its own right. The second generation receives it clear of the debts and incumbrances of the first, the third of the second, and so on. For if the first could charge it with a debt, then the earth would belong to the dead and not to the living generation. Then, no generation can contract debts greater than may be paid during the course of its own existence.”

Politicians aren’t known for reining themselves in, voters try, but usually end up in the same place only a few years later. So if Europe’s debt crisis is any indicator, the United States’ borrowing habit is likely to be tamed by the financial market itself, as the weight of this crushing debt sinks under its own weight and investors finally say ‘no’ to ill-conceived government borrowing that has no fiscally sound means of repayment.

Perry sold out to China

This YouTube video is instructive of why Rick Perry is a threat to our freedom, property rights, and national sovereignty. All the while Perry derides Obama for the rise in foreign creditors on his watch. It's a must-see for all American voters should Perry seek the presidency.

Report: Public-private toll roads won't fill road funding gap

Link to article here.

Report: Public-private toll roads will not fill the funding gap

By David Tanner, Land Line associate editor

August 3, 2011

Policymakers that promote new toll roads and the leasing of existing toll roads as public-private partnerships might be quick to champion this approach as a way to fill the infrastructure funding gap in the U.S. But the DOT’s own Office of Inspector General says the PPP method does very little to fill that funding gap.

For starters, public-private partnerships don’t really bring in “new” money, they merely call for healthy sum to be paid up front. The OIG points to Indiana, where the governor leased the Indiana Toll Road to private investors from Spain and Australia in exchange for $3.85 billion in up-front cash. Sure, the state got $3.85 billion up front, but the public is on the hook to pay ever-increasing tolls for 75 years to reimburse the private consortium.

That’s just one example given in the OIG’s latest report titled Financial Analysis of Transportation-Related Public-Private Partnerships.

The report generated models based on the Indiana Toll Road and nearby Chicago Skyway under a section detailing public-private partnerships involving existing roadway infrastructure. The OIG also studied so-called “greenfield” projects involving new infrastructure capacity and generated models based on tollway projects being built as PPPs in Texas and in other areas.

The authors of the report set out with three objectives: to identify financial disadvantages of PPPs over traditional public methods; identify factors that help PPPs derive value; and assess whether PPPs close the infrastructure funding gap.

For its first objective, the OIG highlighted several disadvantages to public-private partnerships.

Notably, PPPs cost more than traditional public financing. This is because private entities pay more in taxes than public entities do, and private entities seek higher rates of return than public forms of financing do. In addition, the longer the term of the agreement – 75 years in the case of Indiana and 99 years in the case of the Chicago Skyway – the more disadvantages there are to the public, the authors stated.

Next, the OIG identified ways that PPPs can overcome these cost disadvantages, and one of the preferred methods is through toll increases. But as the public knows, if the tolls get too high, the benefit of using the roadway diminishes and the traffic will divert to secondary roadways.

The OIG noted that the private sector has the ability to tap into federal loan programs such as TIFIA – the Transportation Infrastructure Finance and Innovation Act – while public entities do not. TIFIA basically works like a bank to grant or loan money for infrastructure projects. Typical uses for TIFIA funds involve projects that aim to relieve congestion.

Do public-private partnerships help close the infrastructure funding gap as some policymakers claim? The Office of Inspector General says no.

Under a PPP, the private investor is not generating any “new” money in most cases. The investor merely provides a sum of money up front and expects to be reimbursed with a profit over the length of the agreement, the OIG said.

“PPPs are not likely to significantly reduce the infrastructure funding gap because they change the timing with which funds become available, but generally do not increase overall funding levels,” the report’s authors wrote.

The report advises that a state entity considering a PPP should research and study the pros and cons on a case-by-case basis.

In response to the report, Federal Highway Administrator Victor Mendez agreed with the OIG that PPPs can provide benefits and should be considered on a case-by-case benefit. Mendez also said the report did not take risk-reward or project delivery times into account – both of which would favor private-sector agreements over traditional funding methods.

The Office of Inspector General’s report did not reject the concept of PPPs, but it was hardly a glowing endorsement, either.

OOIDA is opposed to the lease or sale of existing roadway infrastructure to the private sector, and cites the agreement in Indiana as an example. Just five years into that 75-year agreement, truckers are paying more than double the toll rate to operate on the Indiana Toll Road.

OOIDA does not categorically oppose new highway capacity that involves tolls to pay off the costs, but as the inspector general’s report cautions, it’s on a case-by-case basis.

Aussies campaign against tolls

Link to article here.

Taxpayers will always find ways to avoid the new tax, especially when their paychecks are shrinking while costs for food, energy, and basics continue to soar! Australia was one of the first countries to embrace and aggressively push public private partnerships as the answer to their transportation funding (largely at the urging of Macquarie, an Australian company and global toll road investor/operator). Now several years later, after pension scandals (they invested public pensioners in the risky deals), toll hikes, and toll roads that are in the red, the PEOPLE are rising up and boycotting these road rip-offs.

Road rip-offs: Hills resident campaigns against tolls

Local News
3 Aug 11 @ 01:30am by ROBBIE PATTERSON


FRUSTRATED commuter Ziggy Zapata is urging all city drivers to join a fight against toll ways after becoming “flabbergasted” with Sydney’s infrastructure and transport systems.

His frustration was further inflamed when the Times recently reported toll increases on the M2.

Mr Zapata started the group Citizens Against Road Rip-offs (CARR) and says he has tips to save commuters thousands of dollars annually on tolls.

“For years I have been angry about the fact that motorists pay so much money in fees, charges, fines and yet governments cannot even build decent free roads, but instead resort to colluding with private operators to construct toll roads,” he said.

Mr Zapata said taxpayer-funded roads such as Epping Road at Lane Cove were almost unusable.

He said they had been “narrowed to try to force motorists to use the Lane Cove Tunnel. And streets in the area have been made inaccessible to prevent motorists from using them as rat-runs to avoid the toll road.”

So Mr Zapata established the non-profit organisation, CARR.

The website aims to teach motorists how to “fight back against the completely unjustified gouging to which they are subjected”, he said.

“CARR is there as my personal protest against being used as a victim for bloodsucking governments and toll road operators.”

Mr Zapata urges anyone who is not happy with the current system to join.

The website contains handy tips to avoid fines and tolls.

“Using technology such as GPS receivers and a bit of common sense, every motorist can avoid being a cash cow for government and toll road operators,” he said.

Mr Zapata said the most powerful tool people had “is the power of the boycott and this is where CARR can help motorists save a lot of money.”

ZIGGY’S TIPS: HOW TO AVOID ROAD RIP-OFFS
* Buy a cheap GPS and use the no tolls option;
* Use a Bluetooth hands-free device at all times to avoid being booked on your mobile phone;
* Put power in numbers: if enough people don’t use the toll ways they will become free like they should always have been.
* For more handy hints and tips, or to join the group go to - www.carr.org.au

RMA contractor, First Southwest, guilty of bid rigging

The Alamo RMA just hired this firm, First Southwest, as one of its financial advisers at its July 2011 Board Meeting. The corruption inside RMAs (Regional Mobility Authorities, a fancy way of saying toll authority) is systemic. All of these RMAs need to go!
____________________________________
Enforcement

First Southwest In 'Tainted' JPM Deal

SEC Cites 'Fraudulent Bidding’

Thursday, July 14, 2011

By Lynn Hume
The Bond Buyer


WASHINGTON — First Southwest Co., as bidding agent for a repurchase agreement related to a $233 million bond deal in Texas for which it was financial adviser, improperly allowed JPMorgan Securities to lower its bid for the repo, reducing the issuer’s investment rate, according to documents and transaction participants.

The Securities and Exchange Commission said the deal, involving bonds issued in 2005 by the Central Texas Regional Mobility Authority, was one of many that involved “fraudulent bidding practices” that JPMorgan engaged in with the assistance of bidding agents.

The SEC described the transaction without identifying the bidding agents or issuers in the complaint. It was filed last week against JPMorgan in connection with its $51.2 million settlement of securities fraud violations for bid-rigging of muni-bond related reinvestment contracts. The complaint only noted that the bidding agent for the repo in the Texas authority’s deal was one of the FAs for the bond deal.

But the final judgment issued a few days ago by a federal judge in New Jersey — which approved the settlement and imposed a permanent injunction against JPMorgan prohibiting further violations — listed the bond issuers. Transaction participants identified First Southwest as the FA for the bond deal and the bidding agent.

Read the rest of the article here.

Mica says no tolls on existing interstates

Link to article here.

Con. Mica tried to clarify his position here, but the term "existing road" has been horribly abused by Rick Perry's highway department. They've advocated slapping tolls on  existing highway lanes and leaving frontage roads as the new non-toll lanes. So sadly, we have to question Mica's definition of 'existing' here. Also, the taxpayers already paid for the right of way in which they plan to add toll lanes, so it's a form of a DOUBLE TAX to charge us twice.

Then there's the financial viability of doing so...I have yet to see ANY managed lane project (tolls down the middle of an existing freeway where the government 'manages' traffic flow based on toll rates) that has been financially solvent. Generally speaking, the only time motorists will volunteer to pay extra taxes is when the free lanes are unbearably congested. In most cities, commute hours are about 6 hours a day (3 hours in the AM and 3 hours in the PM), so the toll lanes are empty the other 18 hours a day. Adding toll lanes to our interstates isn't going to solve our road funding problem -- it'll incur more debt that we cannot repay. What we need is Washington to stop raiding our road money for non-road uses, stop using earmarks, and stop attaching strings to our gas taxes forcing us to spend scarce road funds on landscaping and other "enhancements."

My Word by U.S. Rep. John Mica: Don't add tolls to free interstate lanes

By Congressman John Mica
Orlando Sentinel
August 02, 2011
A recent Sentinel headline stated, "Mica no longer opposed to I-4 tolls in Orlando." That headline does not explain my position on tolling.

In legislation being drafted, I support a ban on tolling existing free interstate lanes, both on Interstate 4 in Central Florida and all interstates.

My position has been and will continue to be that interstate lanes currently free of tolls will remain toll-free, now and under any future legislation.

However, to expand and build more capacity on our interstate system, I support providing states the flexibility to finance the construction of any new interstate-lane capacity using the surrounding land and right-of-way. Our existing interstate right-of-way is a valuable asset, and it must not sit idle. We can provide additional capacity paid for by the user and still keep current free lanes free of tolls.

With limited resources available, the federal government must implement responsible means of paying for new infrastructure. Attracting private capital for adding lanes can allow us to maximize our highway capacity without increasing taxes.

By better leveraging our existing revenues and adding new self-paying lanes, we can improve congestion in the free lanes. My initiative represents the first opportunity in several decades for us to significantly increase capacity on the interstate system.

A successful example can be found in South Florida. Toll lanes were added in the right-of-way on Interstate 95, while the existing free lanes remained free. Before the addition of the toll lanes, the average speed on I-95 during rush hour was less than 20 miles per hour. After the toll lanes opened, the average rush-hour speed in the free lanes dramatically improved. The new lanes have improved travel conditions for all drivers.

In an era of tight budgets and significant public debt, it is vital that we reduce spending, eliminate wasteful programs, and adopt innovative policies to build additional needed highway infrastructure.

In my work to develop a new long-term transportation bill, every effort is being made to consolidate duplicative programs, devolve project approval authority to the states, cut red tape, and streamline lengthy bureaucratic processes. We can better leverage the limited transportation dollars that are available, and bring projects to completion ahead of schedule and at lower costs.

Maximizing the use of any idle highway right-of-way or capacity potential is only one idea, and I always welcome suggestions to improve our infrastructure.

Gas tax next tea party target?

Link to article here.

TURF actually supported the bill in the Texas legislature, HB 3390 by George Lavender, to allow Texas to opt-out of the federal highway program.The federal highway program is so fraught with earmarks, strings, and abuses, the states' money is getting eaten alive by frivolous, wasteful spending that should be going to build and maintain our roads. In Texas alone, it's estimated Texans could reap $1 billion annually by returning all its taxes back to the state...without necessitating toll roads or selling off our roads to private corporations who jack-up tolls to oppressive levels.

Gas tax may be next Tea Party target

By Steve Hargreaves @CNNMoney August 4, 2011: 2:08 PM ET

Lawmakers may scrap the 18.4-cent-a-gallon federal levy when it expires next month. Can our roads really afford that?

NEW YORK (CNNMoney) -- You may want to consider investing in some good shock absorbers for your car this fall.

Fresh from blocking any new tax increases during the debt ceiling debacle, some lawmakers in Congress may now oppose renewing the federal tax on gasoline and diesel fuel, which is used to maintain our nations highways.

The federal gas tax of 18.4 cents a gallon expires at the end of September. In order to keep the gas tax, lawmakers would need to vote to extend the highway funding bill, which is what the gas tax is tied to.

There are no official efforts to scrap the tax yet but as first noted in the journal Politco, momentum appears to be moving in that direction.

A bill was recently introduced by Senate Republicans that would allow states to opt out of the federal highway program. The highway program uses $32 billion each year collected by the gas tax, plus a handful of smaller fees and some borrowing to distribute some $50 billion a year to the states for road construction, maintenance and mass transit projects.

That represents about 28% of all road and transit spending nationwide, with the rest coming from states or towns in the form of tolls, registration and user fees, state gas taxes or their general funds.

Spendthrift motorists shouldn't get too excited by the prospect of eliminating the federal gas tax, which costs the average driver around $100 a year. The states would presumably make up for the loss of federal funds by increasing their own gas tax or other driving-related fees.

But for those who support ending the federal levy, the thinking is that the states could do a better job of building and maintaining the nation's infrastructure.

First there's the bureaucracy. Why collect the money at the state level, send it to Washington, only to have it return to the states?

GM CEO calls for $1 gas tax hike

Then there's the question of federal oversight. Federal money often requires the use of union labor or comes with other stipulations.

"The Davis-Bacon law increases the cost of new roads, bridges etc. by 25% to 33%," Grover Norquist, head of the advocacy group Americans for Tax Reform, said referring to the law that stipulates how much workers on federal projects need to be paid. "Much money is siphoned off to pay union workers in subway systems or to build bike paths....not roads."

About 15% of federal funds go toward mass transit and other things not road related, according to the Transportation Department.

Norquist didn't say if he'll use his considerable influence among Republicans to attempt to kill the gas tax next month, but did say "we should move now, or soon, to allow all states to raise and keep their own gas taxes to build and fix roads."

Supporters of the tax argue federal involvement allows roads to be built and maintained to uniform standards that ensure the smooth and safe flow of travel and commerce.

Having a patchwork of roads with different weight limits, lane widths, or curvature would be a headache for truckers and possibly dangerous for everyone, said Ken Orski, publisher of the infrastructure industry publication Innovation NewsBriefs and a former transportation official in the Nixon and Ford administrations.

Even if states had to build the roads to a federal standard, Washington still acts as as a kind of equalizer when it comes to highway funding. Under the federal system, states on the coasts with large populations often end up sending money to states in the middle of the country that have thousand of miles of open roads but fewer taxpayers to help fund them.

That makes sense, said Orski, as the roads in the middle of the country take a beating by heavy trucks shipping commerce from one coast to the other.

"We are one nation, and we need a national highway system," he said.

That helps explain why some big business groups not only want to keep the federal gas tax, but want it raised.

Both the Chamber of Commerce and General Motors (GM, Fortune 500) have recently come out in favor of a higher gas tax -- the latter arguing for a dollar-a-gallon increase.

They note that the 18.4 cent-a-gallon tax hasn't been raised since 1993, and now has the inflation-adjusted buying power of just 11 cents. Plus, fuel efficiency has been rising steadily each year along with miles driven, meaning Americans are putting more miles on roads while paying less to maintain them.  To top of page

First Published: August 4, 2011: 12:29 PM ET

Toll road debt could take hit from credit downgrade


Link to article here.

Considering many toll roads are faltering financially, and considering, overall, that driving remains flat or in decline, it likely just got a lot harder for both governments and private equity players to borrow money for risky toll road schemes. There just aren't enough people with the discretionary money to pay tolls to get to work, especially when their paychecks are shrinking, their food, energy, water, and property tax bills keep going up.

U.S. Loses AAA Credit Rating as S&P Slams Debt Levels, Political Process

By John Detrixhe - Aug 6, 2011

Standard & Poor’s downgraded the U.S.’s AAA credit rating for the first time, slamming the nation’s political process and criticizing lawmakers for failing to cut spending or raise revenue enough to reduce record budget deficits.

S&P lowered the U.S. one level to AA+ while keeping the outlook at “negative” as it becomes less confident Congress will end Bush-era tax cuts or tackle entitlements. The rating may be cut to AA within two years if spending reductions are lower than agreed to, interest rates rise or “new fiscal pressures” result in higher general government debt, the New York-based firm said yesterday.

“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” S&P said in a statement late yesterday after markets closed.

Lawmakers agreed on Aug. 2 to raise the nation’s $14.3 trillion debt ceiling and put in place a plan to enforce $2.4 trillion in spending reductions over the next 10 years, less than the $4 trillion S&P had said it preferred. Even with the specter of a downgrade, demand for Treasuries surged as investors saw few alternatives amid concern global growth is slowing and Europe’s sovereign debt crisis is spreading.

U.S. Response

On a conference call today with reporters, S&P analysts David Beers and John Chambers said that in their analysis, the “extremely difficult” political discussions in Washington over how to reduce the more than $1 trillion budget deficit carried more weight in their decision than the nation’s outstanding debt. It said the talks weren’t “consistent” with a AAA rating.

The U.S. immediately lashed out at S&P after the downgrade, with a Treasury Department spokesman saying the firm’s analysis contains a $2 trillion error. The spokesman, who asked not to be identified by name, didn’t elaborate, saying the mistake speaks for itself.

Moody’s Investors Service and Fitch Ratings affirmed their AAA credit ratings on Aug. 2, the day President Barack Obama signed a bill that ended the debt-ceiling impasse that pushed the Treasury to the edge of default. Moody’s and Fitch also said that downgrades were possible if lawmakers fail to enact debt reduction measures and the economy weakens.

No ‘Surprise’

“This move should not be much of a surprise to markets, though the timing is at a point where market sentiment is fragile after the drop in stocks this week,” said Ajay Rajadhyaksha, the head of U.S. fixed-income strategy at Barclays Capital in New York. “What really matters is whether the markets are willing to ‘downgrade’ the U.S. bond market. As this week’s move showed, U.S. Treasuries remain the flight-to-quality asset of choice.”

Asian investors are likely to retain their Treasuries holdings for now, with options limited by the region’s foreign- exchange rate policies. Japan, the second-largest international investor in American government debt, sees no problem with trust in the securities, a Japanese government official said on condition of anonymity. Russia said the one-step cut “can be ignored.”

Debt ‘Addiction’

Policy makers from China to Japan to Southeast Asia are lured to Treasuries as a result of efforts to stem gains in their currencies against the dollar, which would impair export competitiveness. China has accumulated $1.16 trillion in the securities and the nation’s official Xinhua News Agency said in a commentary that the U.S. must cure its “addiction” to borrowing.

“They won’t be happy about it, but Asian central banks will just have to hold on and stick it out,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “There is pressure on them to hold on to liquid assets and there is nothing more liquid than the Treasury market. At least Treasuries have been doing well and they aren’t holding on to distressed assets.”

S&P’s action may hurt the U.S. economy over time by increasing the cost of mortgages, auto loans and other types of lending tied to the interest rates paid on Treasuries. JPMorgan Chase & Co. estimated that a downgrade would raise the nation’s borrowing costs by $100 billion a year. The U.S. spent $414 billion on interest expense in fiscal 2010, or 2.7 percent of gross domestic product, according to Treasury Department data.

Not ‘Enough’

“It’s a reflection of the fact that we haven’t done enough to get our fiscal house in the order,” Anthony Valeri, market strategist in San Diego at LPL Financial, which oversees $340 billion, said in an interview before the cut. “Sovereign credit quality is going to remain under pressure for years to come.”

The agreement between Republicans and Democrats raised the nation’s debt ceiling until 2013 and threatens automatic spending cuts to enforce the $2.4 trillion in spending reductions over the next 10 years.

Even with the accord, S&P said the U.S.’s debt may rise to 74 percent of gross domestic product by year-end, to 79 percent in 2015 and 85 percent by 2021.

S&P also changed its assumption that the 2001 and 2003 tax cuts enacted under President George W. Bush would expire by the end of 2012 “because the majority of Republicans in Congress continue to resist any measure that would raise revenues.”

American Policymaking

“More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating,” S&P said.

S&P put the U.S. government on notice on April 18 that it risked losing the AAA rating it had since 1941 unless lawmakers agreed on a plan by 2013 to reduce budget deficits and the national debt. It indicated last month that anything less than $4 trillion in cuts would jeopardize the rating.

“There was still a very narrow cross section of common ground between the parties and we don’t think that this agreement really changes that equation,” David Beers, a managing director of sovereign credit ratings at S&P said in a Bloomberg Television interview.

Capital Weightings

The treatment of Treasuries and other securities backed by the U.S. in terms of risk-based capital weightings for banks, savings associations, credit unions and bank and savings and loan companies won’t change, the Federal Reserve and bank regulators said in a statement following the downgrade.

Obama has said a rating cut may hurt the broader economy by increasing consumer borrowing costs tied to Treasury rates. An increase in Treasury yields of 50 basis points would reduce U.S. economic growth by about 0.4 percentage points, JPMorgan said in a report, citing Fed research and data.

“The minute you start downgrading away from AAA, you take small steps toward credit risk and that is something any country would like to avoid,” Mohamed El-Erian, chief executive and co- chief investment officer at Pacific Investment Management Co., said in a Bloomberg Television interview before the announcement.

Ten-year Treasury yields fell to as low as 2.33 percent in New York yesterday, the least since October. Yields for the nine sovereign borrowers that have lost their AAA ratings since 1998 rose an average of two basis points in the following week, according to JPMorgan.

Relative Yields

Treasury yields average about 0.70 percentage point less than the rest of the world’s sovereign debt markets, Bank of America Merrill Lynch indexes show. The difference has expanded from 0.15 percentage point in January.

Investors from China to the U.K. are lending money to the U.S. government for a decade at the lowest rates of the year. For many of them, there are few alternatives outside the U.S., no matter what its credit rating.

“Yields are low in the face of a downgrade because there is nowhere else for people to go if they don’t buy Treasuries because they want to be in safe dollar assets,” Carl Lantz, head of interest-rate strategy at Credit Suisse Group AG, one of 20 primary dealers that trade directly with the Fed, said before the announcement.

The committee of bond dealers and investors that advises the U.S. Treasury said the dollar’s status as the world’s reserve currency “appears to be slipping” in quarterly feedback presented to the government on Aug. 3.

Currency Reserves

The U.S. currency’s portion of global currency reserves dropped to 60.7 percent in the period ended March 31, from a peak of 72.7 percent in 2001, data from the International Monetary Fund in Washington show.

“The idea of a reserve currency is that it is built on strength, not typically that it is ‘best among poor choices’,” page 35 of the presentation made by one member of the Treasury Borrowing Advisory Committee, which includes representatives from firms ranging from Goldman Sachs Group Inc. to Pimco. “The fact that there are not currently viable alternatives to the U.S. dollar is a hollow victory and perhaps portends a deteriorating fate.”

Members of the TBAC, as the committee is known, which met Aug. 2 in Washington, also discussed the implications of a downgrade of the U.S. sovereign credit rating. “None of the members thought that a downgrade was imminent,” according to minutes of the meeting released by the Treasury.

Remaining AAAs

S&P gives 18 sovereign entities its top ranking, including Australia, Hong Kong and the Isle of Man, according to a July report. The U.K. which is estimated to have debt to GDP this year of 80 percent, 6 percentage points higher than the U.S., also has the top credit grade. In contrast with the U.S., its net public debt is forecast to decline either before or by 2015, S&P said in the statement yesterday.

New Zealand is the only country other than the U.S. that has a AA+ rating from S&P and an Aaa grade from Moody’s. Belgium has an equivalent AA+ grade from S&P, Moody’s and Fitch.

A U.S. credit-rating cut would likely raise the nation’s borrowing costs by increasing Treasury yields by 60 basis points to 70 basis points over the “medium term,” JPMorgan’s Terry Belton said on a July 26 conference call hosted by the Securities Industry and Financial Markets Association.

“That impact on Treasury rates is significant,” Belton, global head of fixed-income strategy at JPMorgan, said during the call. “That $100 billion a year is money being used for higher interest rates and that’s money being taken away from other goods and services.”

Tacoma toll bridge not meeting projections

Link to article here.

This is in keeping with the trend we're seeing across the nation, including Rick Perry's Texas. Driving is flat or falling and toll revenues aren't keeping up. Few if any toll roads are in the black or making it without taxpayer subsidies.

Dude Where Are My Cars: Tacoma Narrows Bridge

Tolls on the Tacoma Narrows bridge are falling short.
Clark Williams-Derry on July 7, 2011 at 12:51 pm
This post is 10 in the series: Dude, Where Are My Cars?

Interesting:  tolling revenues on the Tacoma Narrows Bridge are starting to seriously lag behind the official projections.


Of course, the blue bars on the chart shows toll revenues, not traffic volumes.  Unfortunately, the state hasn’t reported traffic counts in a while. And since revenues don’t always move in lock step with traffic counts (because tolling rates vary depending on vehicle size and payment method), I can only assume that traffic volumes are also falling short of projections.

Mostly, I attribute the shortfall to gas prices:  when fuel costs shot up, tolling revenues started a year-over-year decline. But the  projections themselves ought to shoulder part of the blame. The state forecast a 3.6 percent year-over-year increase in traffic volumes across the bridge in FY 2011. But statewide, traffic growth over the last decade has been just a fraction of that; and in the past year, the US Dept. of Transportation says that total traffic volumes in the state have actually slipped.

To me, this is just one more piece of evidence that the traffic models that we rely on to forecast our future transportation needs just aren’t cutting the mustard. They always seem to predict that traffic volumes are going to rise, fast, starting today—while the reality for the last decade has been a mixture of slow growth and unexpected dips.

Update 2:05: Fourth-quarter revenues could take a further hit after a glitch in the tolling system issued 26,000 questionable fines.

Sources:  WSDOT and EIA. Hat tip to Joe Cortright.

No good deed goes unpunished

No good deed goes unpunished

By Terri Hall
City Brights Blogger
San Antonio Express-News

As usual, the Express-News gets it wrong. The paper played its hand in its scathing editorial criticizing Bexar County Commissioner Tommy Adkisson’s leadership of the Metropolitan Planning Organization (MPO). The paper is sold out for toll taxes and a wholly-owned subsidiary of its Chamber of Commerce advertisers.

Adkisson has been one of very few taxpayer champions that has ardently challenged tolling existing freeways (there are 57 toll projects are in the MPO’s plans).  The editorial singles out Adkisson even though both Commissioner Kevin Wolff and State Representative Lyle Larson also advocated using Prop 12 funds on US 281 instead of converting the freeway into a tollway.

Are all of these elected officials being ‘manipulated’ by the grassroots (Texans Uniting for Reform and Freedom and its members among them) or are they doing what they were elected to do — be responsive to their constituents and do the right thing to restore non-toll funding to fix US 281 (north of Loop 1604) without tolls as they’ve been asked to do? Obviously, it’s the latter, but the Express-News chose to publish a below-the-belt hit piece on Adkisson as punishment for his good deeds.

The fact that the toll authority, the Alamo Regional Mobility Authority (ARMA), is the arbiter that decides whether or not US 281 would qualify for these non-toll Prop 12 funds doesn’t hold any sway with the editorial board. Neither does the fact that ARMA controls the timeline for the environmental process, nor does the fact that the 1604 draft environmental document is conveniently already complete (and it’s for a 36-mile project when US 281, by contrast, is only 7.8 miles and ARMA says it can’t be done in time). ARMA, out of self-interest, wants to manipulate the circumstances so there’s never any non-toll funds available when its environmental process is done.

While the Express-News blames the citizens’ lawsuit for the environmental delays, were it not for this litigation, there would be no opportunity for a non-toll fix to 281, not to mention TxDOT’s violation of the law (for which one employee was fired and another demoted) necessitated the “lengthy study.” We’d already be paying 75 cents per mile tolls to a foreign company like Cintra who’d have a monopoly on it (including the ability to prohibit expansion of free routes) for a half century!

If the RMA and MPO dropped the toll option on US 281, the environmental process could move forward at lightning speed, because the economic impacts of the tolling would no longer have to be studied. When Zachry and the special interests in this town ‘manipulate’ nearly every elected official (with Adkisson not in that category) as a matter of practice, the Express-News is showing its true colors about who ‘manipulates’ it by making personal attacks on the people trying to represent what the taxpayers deserve — to preserve their non-toll freeways and get them fixed without paying a DOUBLE TAX — tolls.

So what the Express-News calls “irresponsible” is, in reality, what’s in the public’s best interest and, notably, also a requirement in the MPO’s bylaws — when a project gets its funds yanked (the fix to US 281 was already funded with gas taxes from 2001-2008 and then the funds were spent elsewhere), it’s supposed to be the first one to have them restored when funding becomes available. Yet, the Express-News says this important public decision was a “waste of time” and “misuse of public funds“ for which there “shouldn’t have been any debate.”

Maybe the Express-News should merge with the San Antonio Business Journal, because it represents the same interests, which is certainly not the taxpayer’s.

Dunnam: We can't ignore the debt crisis right here in Texas

Link to article here.

Mr. Dunnam masterfully makes the case we've been shouting from the rooftops for many years now...that Rick Perry's borrow and spend policies are digging future generations into a unsustainable DEBT BOMB in order to pay for today's road problems. We're quickly reaching a point when all of our road money will be going to cover debt for yesterday's spending spree, leaving nothing left for future generations. Let's remember that borrowing equals spending money we don't have to pay for what we cannot afford (and in the case of government, to pay for what they refuse to make a priority with the taxes we already send them).

We can't ignore the debt crisis right here in Texas

Under Perry, the state borrowed money for roads

By JIM DUNNAM
TEXAS FIRST FOUNDATION

Houston Chronicle
August 2, 2011

With all our attention focused on the federal debt-ceiling debacle in Washington, it is easy to ignore our own state debt crisis here in Texas. Texas' debt is increasing at a rate that rivals the federal government's, yet no one seems to know it.

We have heard how our new Texas budget cuts more than $4 billion from our schools and students, but not about our ballooning state debt.

Before Rick Perry became governor, Texas was a pay-as-you-go state for roads, meaning we used current gas tax receipts to pay for new road construction. Our forefathers set up a system where transportation needs were paid for then and now, not by passing the buck to future generations. Under Gov. Perry, all that changed.

Starting in 2001, Texas started borrowing money for new road construction, pushing that cost onto future taxpayers. In just a decade, this debt has grown from zero to $11.9 billion. With interest payments, future taxpayers and our children will need 20 years and $21.1 billion to pay off that debt. There is even more about to be borrowed. In all, the Texas Department of Transportation (TxDOT) has authority to borrow $17.3 billion, with a 30-year payoff of $31.1 billion, further shifting the burden to our children.

To make matters worse, new transportation debt is being secured by general state revenue, not just the gas tax. The exact same taxes we use to pay for public education, state universities and health care are now being diverted to make bond and interest payments on this debt. Imagine what future Texans could do without being saddled with $14 billion in interest payments over the next generation. They might not have to take money out of their public schools or health care. They might even have a real tax cut some day.

This debt is as potentially crushing on the future of Texas as the federal debt is for our United States. Texas' borrowing has gotten so bad that we are now spending more annually on debt service than we are paying for new roads. According to TxDOT's latest figures, we will spend $1.72 billion on debt payments over the next two years, compared to $1.28 billion for new roads. Just like Washington, Austin is borrowing and spending away our future.

Texas should have never gotten away from the pay-as-you-go system for roads. Our tax system is inefficient and broken. Instead of fixing our broken revenue structure, changing the 20-year-old gas tax methodology, or closing tax loopholes, nearly all of our future infrastructure needs are to be funded by borrowing from the future generation of Texans.

With infrastructure needs only expected to grow, TxDOT continuing to issue bonds is unsustainable. Soon, all funds will be needed just to service the debt and pay interest, leaving nothing for future needs. In fact, bond rating agencies are already looking negatively upon toll road debt in the states, so even that favored option of Perry's will be gone.

Texas' political leadership likes to flaunt our balanced budget and admonish the federal government for its lack thereof. But those leaders are living in a giant glass house and deceiving Texans. The balance in Texas' budget is achieved largely through accounting tricks and debt, both of which shift the burden to future taxpayers. Genuine equalization between revenue and spending levels is nowhere near the truth about Texas' budget.

Today's successful Texas politicians shout, "No new taxes," then cut public education and health care for children, use accounting tricks to delay bills and advance receipts, then pat themselves on the back for balancing the budget. In the meantime, they quietly saddle future generations with billions in new debt obligations. Their borrowing means our children will pay nearly double tomorrow for what they are unwilling to pay for our needs today. Our parents did not do that to us, and we should be ashamed for betraying that legacy.

Texas needs roads, and we also need education. We have to have an honest conversation about how we can balance these needs without extreme cuts and without simply putting it all off for others to deal with.

Dunnam, a former Texas state representative, is a senior fellow at the The Texas First Foundation, a nonprofit organization dedicated to shaping the future of our state through public dialogue and policies that put what is right for Texas ahead of partisan politics.


Read more: http://www.chron.com/disp/story.mpl/editorial/outlook/7680903.html#ixzz1TzEIXe00

Let the states have their gas taxes back

Link to article here.

With Con. John Mica releasing his proposal for the next federal highway bill, this blast from the past, a bill introduced by Con. Jim DeMint, illustrates how irrelevant the federal highway program has become and how leaving it to the states could be just the tonic needed to fix much of what's broken. DeMint points out the earmarks and wasteful, useless gluttony that plagued the last federal bill. The Texas House passed Rep. George Lavender's bill, HB 3390, that would have allowed Texas to opt-out of the federal highway program for this reason, but the clock ran out and failed to pass the Senate. Texas is a donor state -- that means we "donate" some of our gas tax revenues to other states that presumably don't collect enough gas tax to build or maintain their interstates. Simply by giving Texans 100% of their federal gas taxes back would reap an estimated $1 billion/yr for our state highway needs without having to raise taxes or force Texans to pay tolls to drive on our existing roads.

April 7, 2008

DeMint Introduces Transportation Empowerment Act

Legislation Gives States Control of Highway Funding, Flexibility to Innovate; New GAO Study Concludes Federal Transportation Role Should Be Reduced

Washington, D.C.
Today, Senator Jim DeMint (R-S.C.) introduced the Transportation Empowerment Act to reform the federal highway program. The bill would devolve federal highway and mass transit projects and their funding sources to states, allowing each state to determine their own transportation priorities.

“The federal highway system is plagued by thousands of wasteful earmarks, bureaucratic red tape, and outdated funding formulas that pick winners and losers,” said Senator DeMint. “Americans are angry at Washington politicians who waste billions on frivolous pork projects while bridges crumble and critical infrastructure is ignored. It’s time to empower states to make their own transportation decisions and stop making taxpayers pay for bridges to nowhere and teapot museums in other states.”

“I join Senator DeMint in his desire to pursue a dramatic shift in how we address transportation infrastructure from the federal perspective,” said Senator Jim Inhofe (R-Oklahoma), Ranking Member of the Senate Environment and Public Works Committee. I introduced a similar bill in 2002 because, like Senator DeMint, I believe that States and local communities know better then the Federal Government what is needed for their citizens. The Federal responsibility is to provide a national transportation system that promotes interstate commerce, not to micro manage individual choices of cities and counties. Thus, during the reauthorization discussions on SAFETEA-LU, I will be supporting efforts to refocus the federal program on true national transportation needs. I welcome Senator DeMint’s contribution to the debate.”


Senator DeMint’s Transportation Empowerment Act returns control of nearly all highway programs to individual states in the form of block grants to states starting in 2010 when the current highway program expires. After a multi-year transition period, the bill reduces the federal gas tax from 18.3 cents to 3.7 cents in 2013 in order to fund only the limited number of programs that serve a clear national purpose.

In return, states could adjust their state gas tax rates and keep nearly all of the revenue they collect instead of funneling it through Washington. The legislation also proposes new ways to finance roads and gives new authority to states that allows them to partner with other states to undertake major multi-state projects.

A 2008 Government Accountability Office report requested by Senators DeMint and Inhofe found that:
“Functions that other entities can perform better than the federal government could be turned back to the state or other levels of government. Given that already substantial roles states and localities play in financing, design, construction, and operation of transportation facilities and service, there may be areas that no long call for federal involvement and funding could be reassessed.”
“The reality is that the national interstate system was completed years ago. States should be able to keep their own transportation dollars instead of sending them to Washington and only getting a portion of them back with layers of regulations and earmarks,” said Senator DeMint. “The Transportation Empowerment Act is a commonsense solution to the broken highway funding system.”

If the Transportation Empowerment Act were passed, “Donor states,” which send Washington more in gas taxes than they receive back in transportation funding, would see a dramatic increase in their rate of return because nearly all of the tax revenues would never leave the state. This bill would also empower states to pursue more innovative and efficient ways to build roads by engaging in public private partnerships.

A report published by the nonpartisan Heritage Foundation from October 2007 found that most “donor states” have been receiving a losing share of federal transportation funds since the program’s inception in 1956, even though many of these states are experiencing above-average population growth. Heritage found that the five biggest “donor states” in the current federal highway funding system (Texas, South Carolina, Minnesota, Georgia and Indiana) lost a combined total of over $1.2 billion tax dollars in Fiscal Year 2005. According to the report:
“South Carolina was one of the biggest losers in 2005 because its motorists provided the trust fund with 1.836 percent of its rev¬enues while receiving only 1.535 percent of spending in return. In effect, South Carolina received only an 83.6 percent payback on its investment share. South Carolina is also one of the biggest losers over the 50-year history of the program. Only Texas and Oklahoma have done worse since the program's inception.”
A 2007 report by the Department of Transportation Office of Inspector General requested by Senator Tom Coburn (R-Oklahoma) contains the following findings on the problems created by transportation earmarks:
• Department of Transportation (DOT) earmarks have increased in number by 1,150 percent in 10 years (1996 – 2005), with the value of earmarks in the same timeframe jumping 314 percent. • Ninety-nine percent of earmarks (7,724 out of 7,760) were not subject to the transportation agencies’ review and selection processes or bypassed the states’ normal planning and programming processes. • Earmarks may not be the most effective or efficient use of funds. The IG report identifies five ways in which earmarks impact programs in the Federal Highway Administration, the Federal Transit Administration, and the Federal Aviation Administration, as follows (see pages 11 – 14 of the full report):

o Earmarks can reduce funding for the states’ core transportation programs. o Earmarks do not always coincide with DOT strategic research goals. o Many low priority, earmarked projects are being funded over higher priority, non-earmarked projects. o Earmarks provide funds for projects that would otherwise be ineligible. o Earmarks can disrupt the agency’s ability to fund programs as designated when authorized funding amounts are exceeded by “overearmarking.”

Bankrupt San Diego tollway to receive another taxpayer bailout

Link to article here.

A little background: the taxpayers subsidized this privatized toll road (it received the first federal TIFIA loan) for which the taxpayers lost nearly $80 million when it went bankrupt. Now local taxpayers are bailing it out AGAIN by buying it back from private investors, the second such example in California (the first was SR 91 for which the taxpayers bailed that one out seven years later -- for $207 million -- at nearly twice what it cost the private, French company to build it -- $130 million). Yet governments across the globe continue to preach public private partnerships (PPPs) and road privatization as the silver bullet to all transportation funding woes (let's not forget, the politicians are the ones who got us into the woes in the first place by habitually raiding our gas taxes for non-road uses). Here's a few more articles about the South Bay Expressway (here and here), including this scathing editorial. Road privatization is an idea whose time has come to an END. PPPs are public money for private profits, period. The taxpayers can no longer afford to pick up the pieces from this grand, unsustainable experiment.

San Diego Association of Govs likely to buy South Bay Expressway

Toll Road News
Posted on Sat, 2011-07-30 00:59

 The San Diego Association of Governments (SANDAG) is buying the South Bay Expressway from the post-bankruptcy South Bay Expressway LLC for $345m, about two-thirds what it cost to build.

The SANDAG board agreed in principle to the purchase Friday but will discuss financing of the purchase at their next meeting scheduled for August 26. There have to be public hearings and a final decision by about November.

A statement today from SANDAG says: "The Board made the agreement contingent on completing due diligence and conducting a public process, during which the details of the purchase and financing options will be presented and voted upon by the Board."

SANDAG chairman Jerome Stocks is quoted as saying the privately operated pike is "good value" at $345m.

He wants to reduce tolls which presently are $3.85 by transponder and $4.00 cash for traveling the 10 miles, 16km length of the road which runs north-south across the southeast fringe of the San Diego metro area.

The South Bay Expressway (SBX) opened in November 2007 just as the economy was in sharp decline due to the burst of the housing bubble and broader financial crisis. Foreclosures were especially prevalent on either side of the SBX, construction stopped, unemployment shot up, and immigration largely ended.

An important hope in earlier years had been that burgeoning trade with Mexico would generate major truck revenues since the toll road linked to a new border crossing at Otay Mesa. There was disappointment there too.

Traffic is less than 30,000 vehicles a day, almost a half of that expected.

Macquarie which bought into the road shortly before the financial collapse put the tollroad into bankruptcy March 23 2010. It had written of any equity in the pike over a year before. After lenders had taken 'haircuts' in the Chapter 11 proceedings, the holding company South Bay Expressway LLC emerged from bankruptcy April 14 2011.

Operations have continued pretty much as normal right through the bankruptcy with toll revenues more than covering operating costs even at the worst time.

The toll concession under which the road was financed was for 35 years from opening. That means there are 31 years left, after which the road passes to California Department of Transportation.

The project goes back to a 1991 concession agreement with California Transportation Ventures (CTV), largely a Parsons Brinckerhoff company. CTV had great difficulty gaining approvals and reaching agreement with locals on the route and design of the road. After construction started there were bad relations with the builder Fluor.

Fluor sued CTV's successor SBX for hundreds of millions in claimed cost overruns.

see SANDAG statement:

http://www.sandag.org/index.asp?newsid=698&fuseaction=news.detail

SBX website:

http://www.southbayexpressway.com/

TOLLROADSnews 2011-07-29

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