GOVERNOR RICK PERRY AND HIS CRONIES ARE DESPERATE TO ACCELERATE CONSTRUCTION OF THE NAFTA SUPERHIGHWAY TRADE CORRIDOR AND TOLL ROAD SYSTEM FROM MEXICO’S PACIFIC PORTS INTO TEXAS AND BEYOND.
By Terri Hall l April 30, 2012
We’ve seen it with AIG’s toxic debt, then the banks with their financial crisis spawned by subprime mortgages, now get ready for the next big bailout – the toxic debt from toll roads. The Texas Transportation Commissioners engaged in a day-long lovefest at their April 26 meeting idolizing themselves and the like-minded elite leaders from around the state for indulging in the act of ‘leveraging’ Texans to the hilt and demanded even more debt. The Texas Transportation Commission’s ‘leveraging’ is code to pay for building more toll roads (and now it can also include local revenue streams from property and sales taxes). Their spending message is clear: no toll roads, no local debt, no money; all this despite the fact that the State of Texas is more than $34 billion in the hole for roads already. Federal data shows Texas is second only to New; all this despite the fact that the State of Texas is more than $34 billion in the hole for roads already. Federal data shows Texas is second only to New Jersey in road debt in the entire country.
The bubble that shields Texas Governor Rick Perry’s five appointees to the Commission from direct accountability to the taxpayers allows them to display such an arrogant anti-taxpayer sentiment. Likewise, the rules are the same for the un-elected directors of the Metropolitan Planning Organizations (MPOs) of the four major cities in Texas: Austin, Dallas, Houston, and San Antonio that TxDOT trotted out at the meeting, and they, too, joined the anti-taxpayer bandwagon among the elite. Their motto: put the screws to the taxpayer openly and often in every conceivable ‘tax & debt scheme’ no matter the cost or long-term consequences. This attitude has dominated virtually every Commission meeting since Perry took office in December 2000 – that’s nearly 12 years of catering to the special interests of free trade, open borders and globalization.
Perry has largely been able to get away with such behavior by his appointees. Transportation Commissioner, Ted Houghton of El Paso, brazenly called himself “the most arrogant commissioner of the most arrogant state agency in the State of Texas” at a press conference announcing TxDOT had pulled the plug on a major Trans-Texas Corridor project, TTC-35, due to the threat of litigation back in October of 2009. Rather than punish him for such arrogance, Perry promoted him to become Chair of the Texas Transportation Commission, when long-time crony Deirdre Delisi bolted in 2010 to run Perry’s failed presidential campaign.
Commissioner Ned Holmes opened the meeting with high praise for leveraged debt, and he later received adulation for selling-off Texas’ sovereignty by handing some state highways in Houston to private corporations in sweetheart toll road deals called public-private partnerships (P3s), despite their higher cost, complexity, and lack of efficiency. Commissioner Bill Meadows then hailed Dallas officials for using leveraged debt to advance $15.3 billion in transportation projects, most all of them toll roads, including thanking the federal government for yet more leveraged debt by giving them a $450 million TIFIA loan to slap tolls on Interstate-35, Texas’ major NAFTA superhighway corridor through the state. Toll rates won’t be cheap either – 85 cents a mile – and this new tax rate will be in the hands of a private corporation, whom the taxpayers cannot hold accountable.
Traditionally, turnpikes didn’t involve taxpayer money, but rather toll revenue bonds. Private bond investors took all the risk, if the traffic didn’t show up to pay tolls and they were brand new roads offered as alternatives to freeways. Now, under Perry’s watch, with these so-called ‘innovative financing’ techniques introduced by the likes of Goldman Sachs (responsible for the debt crisis in Greece), the taxpayers are heavily subsidizing toll projects, most of them on existing freeways. The federal TIFIA loan program, unknown to most of the general driving public, is one such slush fund for leveraging toll projects, many of them propping up privatized toll roads in P3 deals, making TIFIA loans that much more egregious.
So, Meadows, doing a shout-out to the feds, whom Perry is so fond of slamming, demonstrates just how fiscally reckless Perry’s highway commission is, despite Perry’s claim to a fiscal conservative pedigree. Add to that, the TIFIA loan program is 100% BORROWED money and you begin to see how these toll roads use the identical financing schemes that brought us the subprime mortgage crisis fueled by borrowed money being used to secure even more borrowed money and then yet more borrowed money and so on; this is what is meant by leveraging – it’s a house of cards that can collapse at any time, leaving the taxpayer holding the bag.
TICKING DEBT BOMB AND BAILOUTS
This ticking debt bomb is what so-called fiscal conservatives that run Texas want to wreak upon unsuspecting Texans for generations to come. Indeed, a Commissioner said today that the Commission expects local leaders to ‘leverage every penny’ of the state gas taxe and other revenues it bestows upon each region – or else don’t ask us for any money. Translation: the Commission is MANDATING that local governments issue debt for STATE highways or they won’t get their due allocations.
Governor Rick Perry and his cronies are desperate to accelerate construction of the NAFTA Superhighway Trade Corridor and Toll Road System from Mexico’s Pacific ports into Texas and beyond.
The rumblings of a bailout for this irresponsible spending spree and the coming infrastructure bubble just careened into a full throttle earthquake. One local official from the Rio Grande Valley even quipped: “I’ve noticed there’s a tsunami of leveraging.” Taxpayers and commuters weary from gas price hikes had better wake-up and hold the Governor, lawmakers, and local elected officials accountable before this fiscal ‘tsunami’ comes crashing down on all of us, leaving fiscal death and destruction in its wake.
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