It’s been quite a week for transportation in Texas. Senate Transportation Committee Chair Robert Nichols held two interim hearings on highway funding. The first was a lovefest over public private partnerships (P3s) that hand public roads to private corporations who extract extremely high toll rates. The committee, which barely gained a quorum, heard invited testimony from the Texas Transportation Institute (TTI) and three toll authorities about various P3 projects that are advancing. You would think P3s are the greatest thing since cars were invented. The second was a hearing on the state of transportation funding in Texas, the same song as the House Transportation Committee hearing a few weeks ago about the fiscal cliff coming in 2015.
What’s significant about these hearings for taxpayers is the total disconnect between our elected officials and the electorate. While there may be a legitimate road funding shortfall since the neither the state nor federal gas tax, the primary source of road finding, has been raised in more than 20 years and neither is indexed to inflation, transportation leaders continue to drag taxpayers down the road to tolling everything that moves and hawking up our public roads to the highest bidder. Few policies have the potential to crush the growing Texas economy and kill the middle class and working poor than tolls.
With all the whining and moaning over the price tags of public education and public health programs, forcing Texans to pay tolls in order to go about daily living will end up costing far more in the long run. Whether the massive public debt toll roads have incurred, the higher price for all the goods and services we buy, or the cost to the end user who is forced to pay $10-$20 per day in tolls, toll roads are one of the biggest tax increases in our lifetimes. Due to changes in state law ushered in by Nichols, tolls will be charged in perpetuity and effect generations of future Texans. Not one toll road has come before the voters for their approval of this sweeping new tax hike on driving.
Tolls = Carbon Tax
It’s a version of a carbon tax that even Republicans support since they justify it by calling it a ‘user fee,’ even though none of the current toll projects are toll viable or can be paid for with the tolls alone. Public documents show, every Texan is paying billions in gas tax and other public money to subsidize, prop-up, bailout, or guarantee toll roads whether they take a toll road or not. By the time it’s all said and done, we’re being double and triple taxed to use a public road our tax money paid for. It’s the equal opportunity destroyer imposed by elites who either refuse to fund this core function of government through the user fees and taxes we already pay, or by those who see tolls as a means of government social engineering to try and change the behavior of the populace by taxing us out of our cars and into rail or other mass transit.
GOP revolt on tolls
Apparently Republican politicians didn’t pay attention to the new GOP platform that repudiates toll roads and, for the first time, road privatization and the extremely high toll rates that come with it. You see, Texans have figured out that the way tolls are being imposed today are taxes, and that the toll tax is in the hands of unelected boards/commissions or even worse private corporations whom the taxpayers cannot hold accountable. So the taxpayer revolt has begun in earnest. Yet our leaders continue to act as though Governor Rick Perry’s toll road policies will continue unabated as a way to bail out politicians who refuse to properly fund highways, a core function of government, from the taxes we already pay.
There’s a reason gas tax is not enough, aside from inflation eating into the buying power of gas taxes, politicians have raided the gas tax for decades for non-road purposes, particularly mass transit that highway users do not use. In fact, the new Texas Department of Transportation (TxDOT) Executive Director Joe Weber recently announced the agency’s desire to spend more on rail and transit. The Texas Transportation Commission just approved $35 million for mass transit projects in San Antonio and over $90 million for a street car in El Paso at its meeting Thursday.
To cap off the week, Nichols spoke to the San Antonio Mobility Coalition, a group of highway engineers and road builders, on Friday to push passage of Prop 1 and sharing his vision for how to shore-up the highway fund. Prop 1 would divert half of the oil and gas severance tax currently sent to the state’s emergency fund to the state highway fund. It could not be used for toll roads and requires a minimum balance to stay in the Rainy Day Fund before any of it could go to roads. The diversion sunsets in 2024.
He acknowledged the plan of Speaker Joe Straus to end some of the gas tax diversions, estimated to be $600 million a year, as part of the solution. He also touted his bill to dedicate about half of the existing tax on vehicles sales to highways. But here’s the kicker. He also plans on $14 billion in private equity to be part of the solution. That’s code for private toll roads or P3s. Considering Nichols authored the moratorium on P3s in 2007, he clearly jumped on board voting for them every session since.
Keeping tolls in the mix
When the existing gas tax diversions are closer to $1 billion/year, not $600 million, and the existing vehicles sales tax is $3.3 billion/year, and since TxDOT claims to need $4 billion more per year, there is no need to build another one of these loser toll projects that can’t pay for themselves without taxpayers footing part or all of the bill. It’s never been pro-taxpayer or pro-property rights to hand our public roads to private corporations, so this notion of Nichols and other transportation leaders that $14 billion in private equity is going to ‘help’ Texas pay for our highways is a total disconnect with the people of this state. Private corporations aren’t charities, all the money they put into a deal they want back in profit and interest. What may be a good deal for state government is not a good deal for taxpayers who have to pay at the pump and again to use the road.
Texans have spoken loud and clear opposing this privatization scheme since the Trans Texas Corridor came on the scene in 2003. The first P3 in Texas is on the verge of bankruptcy. The second just began its ‘congestion pricing’ (where the toll varies based on time of day and level of congestion) on Interstate-635 in Dallas and drivers are flocking to the side roads as they are confronted with the toll rates changing from 35 cents a mile up to 75 cents a mile or more by the end of their morning commute. Once the full project is open to traffic, it will exceed $24/day in peak hours to take the toll lanes operated by Spain-Based Cintra.
The people are mad and they’re going to be seeking vengeance against anyone associated with bringing this nightmare on Texas. Republicans can no longer claim to be about lower taxes or limited government as long as they support toll roads and P3s. Toll roads are runaway taxation, anti-liberty, and big government’s attempt at trying to ‘manage’ our commute.
Lawmakers are going to have a tough go of getting Prop 1 passed if they continue down this road of pilfering our scarce road dollars for non-road purposes, especially for rail and mass transit. They’ve been punting the tough decisions regarding prioritizing existing road taxes to get TxDOT $4 billion without raising taxes, including tolls. It’s always ending ‘some’ of the diversions or dedicating only ‘half’ of the existing vehicles sales tax, and still relying on tolls and P3s - it’s never ending the raid completely so tolls and P3s come off the table.
Politicians are also going to reap their own undoing at the ballot box if they continue this toll push that will lead to economic destruction and elimination of the middle class. Smart candidates know better, and those currently seeking higher office, most notably gubernatorial candidate and Texas Attorney General Greg Abbott and State Senator and candidate for Lt. Governor Dan Patrick, are campaigning on the promise to fix the road funding shortfall without raising taxes and without tolls.