America for Sale

By Terri Hall l June 6, 2011

A steady stream of bills to sell-off Texas infrastructure to private corporations flooded the pipeline during the recent 82nd Regular Session of the Texas Legislature. A key bill, SB 1048, to authorize state and local governments to privatize virtually every kind of public infrastructure (except roads) and charge user fees or lease payments for the public to access its own buildings: schools, hospitals, nursing homes, water supply facilities, ports, mass transit, libraries, even telecommunications and pipelines, became law despite an outpouring of opposition from tea parties and the grassroots.

Chair of the House Transportation Committee Larry Phillips authored the most sweeping public private partnership (PPP) bill, or government-corporate scheme, pertaining to roads, with Rep. Bill Callegari, Rep. John Davis, and Sen. Mike Jackson carrying bills for other types of civil works projects. HB 3789 that would have most directly revived the Trans-Texas Corridor (TTC) under another name never even got a hearing in committee, when the grassroots got wind of it. In total, more than 30 bills to privatize Texas infrastructure were filed this session.

Apparently Texas is for sale and the passage of SB 1048 means Katie-Bar-the-Door on selling off virtually everything not nailed down. The priorities of this governor and legislature are crystal clear. It’s not what the grassroots have been demanding like ending diversions of road taxes to non-road uses. It’s not cleaning up the highway department. It’s not getting all of Texans’ gas tax revenues back to Texas. It’s not reining-in the $31 billion in road debt (the House caved in conference committee adding $3 billion more in Prop 12 debt to the budget). It’s selling off Texas to the highest bidder, which is the MOST expensive, anti-taxpayer method of funding infrastructure.

TURF along with over 100 grassroots groups delivered an open letter with 2,000 signatures collected in just one week to Governor Rick Perry and every single legislator putting them on notice about these PPPs and transportation issues, yet the Legislature ignored the public opposition.

SB 1048 was written by British infrastructure firm, Balfour Beatty, which doesn’t sit well with a plurality of Texans who don’t like the idea of foreign ownership of our public infrastructure. Unlike the 52 year cap on PPP roads, SB 1048 gives no limit on the length of time a PPP can last (one example given in Austin was for 100 YEARS) or whether such broad authority expires.

Two anti-taxpayer provisions in SB 1048 are the fact taxpayers secure the private entity’s debt and it authorizes public subsidies for private profits by raiding taxpayers’ money through loans from the State Infrastructure Bank, which is currently NOT authorized in law. The House voted for Rep. Lois Kolkhorst’s amendment to the TxDOT Sunset Bill, SB 1420, to ensure the Phillips’ Amendment regarding the State Infrastructure Bank could not lend taxpayer money to private entities (both amendments were later stripped). Yet, no one insisted upon the same protection in SB 1048.

Eminent domain for private gain

PPPs represent eminent domain for private gain, which is what caused much of the backlash to the Trans-Texas Corridor, where PPPs were the financing mechanism that grants these private entities the control of not just the facility, but the right of way/surrounding property where private companies make a killing on concessions. SB 1048 grants the private entity rights to appurtenance, which the legal definition given by Merriam-Webster’s Dictionary of Law is “property (such as an outbuilding or fixture) or a property right (as a right of way) that is incidental to a principal property and that passes with the principal property upon sale or transfer.”

SB 1048 also uses the term ‘public purpose’ (which could mean a shopping mall) as opposed to the stricter ‘public use’ language to ensure the taking through eminent domain is for a legitimate public necessity). Texans hold private property rights sacred, and these bills will throw gasoline on the Trans-Texas Corridor fire that lawmakers are attempting to convince constituents has been extinguished. Kolkhorst’s TTC repeal bill, HB 1201, finally became law, but the victory has lost some of its luster due the PPPs bills’ passage.

So Texas lawmakers are basically granting government a blank check to trample on property rights and pick winners and losers — who will lose their land to benefit another, not for matters of public necessity but for private gain. If the government can steal your land, it’s tantamount to stealing your wealth. Who said Republicans can’t be socialists? PPPs are just the sort of wealth redistribution they like — giveaways to their cronies and special interest friends. Democrats also like PPPs because it gives government more power. PPPs are a BIG step in enacting the UN’s Agenda 21 policies, whose stated goal is to abolish private property and restrict mobility.

Sweetheart deals, government-sanctioned monopolies

Michelle Malkin called PPPs corporate welfare. Fannie Mae and Freddie Mac were PPPs, which required massive taxpayer bailouts.

PPPs socialize the losses and privatize the profits that amount to horrible public policy. Such contracts are sweetheart deals that eliminate competitive bidding and grant government-sanctioned monopolies (with guaranteed profits) to the politically well-connected.

Public interest not protected, kept secret

These PPP contracts can be negotiated in SECRET, without financial disclosures (like financing, the structure of the ‘user fees’ or lease payments, viability studies, public subsidies, or whether or not it contains non-compete clauses or other gotcha provisions). There is no meaningful public access to these back-room-deals before they’re signed, and the few guidelines created simply exist to advise governmental entities outside the public purview.

Corporations granted power to tax

SB 1048 allows a private entity “to collect lease payments,” and “impose user fees.” This means the Texas legislature, both Democrats and Republicans, have granted a private non-governmental entity the power to levy a tax. Ditto for PPPs for highways.

Yet, the public cannot pressure or hold accountable a private corporation if the ‘fee’ or ‘tax’ is too high. PPPs are the marriage of the corporation with the state and grants monopolies to private entities for a private rather than a public benefit. Such deals also violate the public trust and the fiduciary duty of lawmakers to protect Texas taxpayers. But don’t think it’s going on just in Texas; it’s happening all across the country and the taxpayers are picking up the tab. Pure and simple, it’s piracy of the public’s assets, and state lawmakers of BOTH parties passed these bills by huge margins, effectively selling off what doesn’t even belong to them — our roads and infrastructure belong to the PEOPLE of Texas.

SB 1048 and HB 2729 include the sale of schools and public hospitals, and since PPP agreements grant private, even foreign, corporations a right to operate and maintain the “asset,” it grants authority to privatize the public sector workforce currently in place. Now, decisions will be made based on private profits, not the public interest. Where are the unions now?

Texans won’t take this lying down; they’ll seek political retribution, as they did with the Trans- Texas Corridor.



Terri Hall is the founder of Texans Uniting for Reform and Freedom (TURF), which defends against eminent domain abuse and promotes non-toll transportation solutions. She’s a home school mother of eight turned citizen activist. Ms. Hall is also a contributor to

SFPPR News & Analysis.