Texas lawmakers vote to sell-off state roads to private corporations

Proponents either managed to dupe enough lawmakers, or more likely, think they can dupe the public into believing that voting for SB 1730 wasn’t a vote for toll roads or private toll roads. So, a ‘YES’ vote means Texas roads could be handed to a private, even foreign, entity for a half century with no further oversight from the legislature or the people of Texas.


By Terri Hall | May 8, 2013

Texas is open for business

The Texas House joined the Senate in voting for SB 1730 to hand 20 Texas highways to private corporations in controversial contracts called public-private partnerships (P3s) or comprehensive development agreements (CDAs), despite public opposition. These sweetheart deals are designed to extract exorbitantly high toll rates, as high as 75 cents per mile, and guarantee profits, using taxpayers to socialize losses and privatize profits.

This crucial vote will affect the next three generations of Texans since P3s grant private, even foreign, entities government-sanctioned monopolies for 50 years. By limiting the expansion of free roads and, in effect, guaranteeing congestion on free routes through non-compete agreements, P3s hamper future transportation needs of the public – for up to 30 years in Texas. P3s also erode property rights taking land in the name of ‘public use,’ but turning it into a private purpose for private gain.

Projects included in the bill:

  • I-35 (many segments), I-820, Hwy 183, US 67, Hwy 114, Loop 12, Loop 9 (DFW)
  • Hwy 290, SH 99/Grand Pkwy, Hwy 288 (Houston)
  • Hwy 183, MoPac (Austin)
  • Loop 1604 (San Antonio)
  • Loop 375 & NE Pkwy (El Paso)
  • Loop 49 (Tyler)
  • Hidalgo County Loop, Outer Pkwy Project, Int’l Bridge Project, & COMMUTER RAIL
    PROJECTS (Hidalgo & Cameron counties)
  • South Padre Island Second Access Causeway Project (South Padre)
  • Hwy 181 Harbor Bridge Project (Corpus Christi)

Conservative columnist Michelle Malkin calls P3s corporate welfare and blogger Rachel Alexander calls them ‘double taxation.’ On the first three contracts signed in Texas, all use public subsidies – two combined to total $1 billion in gas taxes. So they’re building the road with tax money but charging Texans again to drive on it. Public subsidies are not only corporate welfare, but also a way to socialize losses and privatize profits. Some deals use public money (gas taxes, tax-exempt private activity bonds), others public debt (federal TIFIA loans, and State Infrastructure Banks). Either way, the companies also get to depreciate the ‘asset’ on their taxes.

Lawmakers fooled by the difference between a Design-Build and a concession CDA?

Proponents either managed to dupe enough lawmakers, or more likely, think they can dupe the public into believing that voting for SB 1730 wasn’t a vote for toll roads or private toll roads. Yeah, right. They argued a project may not be a concession P3 (that hands our highways to private toll operators), but could be a design-build P3 done by a public entity (and even non-toll). So, therefore, they issued the famous ‘trust us’ and ‘it’s just a tool in the toolbox’ line, and TxDOT gets to decide later who gains control of our public roads and whether they’re tolled or not.

A design-build contract is a truncated concession. A full blown concession includes design-build-finance-operate-maintain (and a 50-yr leasehold/ownership stake), whereas, design-build stops short of handing operations over to a private entity. Design-build contracts are fraught with potential abuses as well – not competitively bid, can be handed to the well-connected, no apples-to-apples bid comparison or final design to compare against, and payments can be made to losing bidders, etc.

Regardless of the type of P3, the bill does not separate design-build authority from concession authority – now that lawmakers have pulled the trigger, it could be either. So, a ‘YES’ vote means Texas roads could be handed to a private, even foreign, entity for a half century with no further oversight from the legislature or the people of Texas.

Trans-Texas Corridor by a different name

Loop 9 near southern Dallas through Rockwall County has long been called part of Trans-Texas Corridor TTC-35 project. The planned P3s on I-35 itself are also part of the TTC concept.

Former TxDOT Executive Director Amadeo Saenz admitted Loop 9 is part of TTC-35, and after Texas Governor Rick Perry announced he was pulling the plug on TTC-35 for political reasons, Saenz revealed the plan – still build it by switching each road segment back to its original name and build it piece by piece. P3s are the financing mechanism of the TTC. So as long as P3s are alive, the TTC is alive.

What Texans think

While it’s clever to say the toll element is ‘optional,’ whether or not Hwy 290, Hwy 183, I-35, Loop 9, Loop 1604 and a host of others get handed to a private toll operator will be decided later by un-elected boards and TxDOT, not Texans or their elected officials whom they can hold accountable.

As far as Texans are concerned, they haven’t changed their minds about P3s since the Trans- Texas Corridor or the P3 moratorium in 2007 – they do NOT want Texas sovereignty over our public infrastructure handed to private corporations who can gouge taxpayers for 50 years.

P3s are the financing method behind the Trans-Texas Corridor and the primary mechanism keeping aspects of it alive today. Texans went radioactive at the notion of having private land handed to private, foreign corporations for private gain, rather than a public use, and the idea that a private company could dictate what roads get built (non-compete agreements) and how high the tolls would be.

P3s differ from a completely private road/project and differ from the government simply contracting work out to the private sector since a P3 involves an ownership stake or long-term leasehold. While claiming to be built with private money and transferring the risk from the public sector to the private sector, this financing mechanism virtually always involves public money and hence public risk through profit guarantees and taxpayers being on the hook for potential losses.

So, disaster has befallen Texans despite the grassroots’ best efforts to stop the special interest freight train. Punitive toll taxes in the hands of private corporations will undoubtedly restrict freedom to travel and drive up the cost of goods for all Texans whether they ever take one of these toll roads or not. Increasing the cost of transportation hurts the economy, period. Texas’ economic boom is about to go bust.



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.