While the usual pictures do look pretty, consider the following:
(1) The factors that are really critical in determining whether Texans are about to get shafted with this plan are missing. In particular, look for any links regarding contract details, state law, or anything else that may protect Texans. Other than some fluffy words, it is those details and the state law that will determine whether Texas build the greatest highway system, or becomes the laughing stock of the nation (right now, my vote is on the second). Remember this “project” is costing close to 200 Billion dollars, which is about $30,000 for a family of 4. This is the biggest government-orchestrated debt, ever, on the public (per capita), other than the national deficit. While private investors may be putting up the money for the system, from whom do you think they will DEMAND their money back? (hint: there are not enough NAFTA trucks to come close to covering these costs)
[[Update: there are some proposed law changes that will protect Texans, but who knows if they’ll ever see the light of day.]]
(2) The government will be TAKING huge amounts of land from private landowners, and virtually giving it over to a private company, Cintra (based in Spain), so that the company can build a toll road and probably be able to charge whatever the market will bear – as they do today in Canada. (technically speaking, we are being told that the concession is for 50 years, but we will not know for sure until we see the contract – and 50 years of being robbed is a long time)
http://best.enigmati.ca/trans-action/200501/4601.html#start
[[Possible Update: Robert Black, a spokesman for Texas Governor Rick Perry, has said that the “tolls cannot be set without state approval” (Feb., 2005). Since the contract has not been finalized and released to the public, it’s difficult to see how this can be verified – but in fairness to others, I promised to include this in the my posting.]]
(3) Speaking of Canada. Cintra now charges cars 19.5 US cents per mile if they have a transponder, and 23 US cents per mile (or more) if the do not have a transponder (these are peak rates, non-peak rates are about 1 cent less). Large Trucks are now charged 58 US cents per mile (peak) and 52 US cents per mile (non-peak). For the length of the highway, this is the highest toll rate in North America, and possibly the world. Cintra has won court rulings assuring them the right to continue raising tolls at will, and there NOTHING Canada can do to stop them for the next 95 years or so. Will trucks in Texas use Cintra’s new toll road? It’s hard to see how, considering that the toll will be higher than many of the drivers make in the first place. These are the rates (in Canadian cents per kilometer) that Cintra charges in Canada, bottom half of this web page:
http://www.407etr.com/tolls/tolls.asp
(4) If you think that is high, another experiment with a private monopoly being allowed to charge whatever it wanted was done in California. In that case, 2 toll lanes (each way, 10 miles long) were added to the totally packed SH-91 freeway, east of Los Angeles. The toll lane operator actually prevented the state from doing a badly-needed upgrade of a nearby state-owned highway section (using its monopoly clause). It got so ugly, that Orange County had to buy the toll lanes, just to be able to do the upgrade. By the way, those lanes now charge 70 cents per mile, for cars, at peak drive times.
http://www.91expresslanes.com/tollschedules.asphttp://bicycleaustin.info/rogerbaker/tollroad-failure.html (read the LA Times article, just over halfway down – ignore the rest of the page, it’s a left-wing site)
(5) The contract between Texas and Cintra is being negotiated and signed in SECRET. Here in Texas, Governor Perry is signing away the future of Texans (see next item), without anyone even getting to see the deal. Most governors don’t have this level of power, and the ones that do would NEVER use it this recklessly.
(6) It has been virtually promised to Cintra that they will be able to prevent ANY upgrades to STATE-OWNED highways, anywhere near their toll road. This is classic MONOPOLISTC protection, which means that the free market has been jettisoned – and replaced by a very scary collaboration of big business and big government. Market forces are not simply not possible with surface transportation, due to right-of-away issues – the question really becomes whether private companies should be able to prevent the state from doing what it needs to do on state-owned highways. Most people in this country can easily see the disaster up ahead, except supporters of Governor Perry. Note this quote from Ric Williamson, head of the Texas Transportation Commission: “…we fully expect that there will be limitations on our ability, at some point in the future, to compete with the road…” The road being Cintra’s. There certainly will be monopolistic provisions. You can find the quote buried in this transcript.
http://www.dot.state.tx.us/transcom/transcripts/1204.htm [[Possible Update: Part of the proposed law changes would prevent any Cintra-type contract from containing any anti-compete (or monopoly) clause. Again, this is only a proposal, and has not yet been passed by the Texas legislature, much less signed into law by the governor. Also, it’s very possible that this Cintra contract will be finalized and signed before the prohibition against anti-compete clauses becomes law. For this reason, the above information (Cintra gets their anti-compete clause) must remain the working assumption. For the people of Texas, let’s hope this prohibition becomes law before the contract is signed.]]
(7) The combined state and federal gas tax in Texas is about 2 cents per mile (or 40 cents per gallon, for a car getting 20 miles per gallon). For ONE extra cent per mile (or 20 cents per gallon), Texas could easily build the FREEWAYS that it needs.
(8) State-built toll roads can work, providing that politicians are honest about how they spend the money. The State of Kentucky built a large network of toll roads, but put all of the excess toll revenue back into paying off the roads. The result: the roads got paid off much earlier than expected, and now 80% of them are freeways, and the rest charge about 2 CENTS PER MILE. However, this is the exception. In Houston, once they had a surplus, they diverted it. First to buying a toll bridge that was nearly in default (and bailing it out), then by using the money to plan new toll roads, and finally by simply diverting the money completely out of the toll road system (when they were sure no one was looking). For a state with as much corruption as Texas (just look at this SECRET deal with Cintra), toll roads are simply another way for politicians and the well-connected (like Cintra) to rob the people.
http://www.kytc.state.ky.us/toll/Natcher.htmhttp://www.chron.com/cs/CDA/ssistory.mpl/front/2994429
(9) Do toll roads increase property values and encourage development. NO, if you look at how people in the real world reacted when told that their freeway would now be a toll road. It’s real easy for the Libertarians at think tanks like Cato, Heritage, and Reason to publish white papers that essentially state that toll roads are equivalent to the second coming of Ronald Reagan. But the real world is outside of Think Tanks. The following article describes how a group of property owners (developers in this case) rescinded their offer to DONATE land to the state of Texas when they were told that their planned freeway (the Grand Parkway, a large loop around Houston) would instead be a toll road. While the Think Tanks may be have been telling them that they would become rich, their own decision to now force the state to condemn and BUY their land shows the real price of toll roads. (the article that follows is a bit tough to follow, but it confirms what did happen)
http://mypeoplepc.com/members/chrisodonnell/unitedtosaveourspring/id11.html
(10) Toll Roads are inherently inefficient. They require their own complicated system for identifying and tracking vehicles, and sometimes drivers. This adds greatly to the cost of tolls. Whereas the gas tax is already in place, thus there is no extra charge to collect more money. For example, if $10 needs to be collected using a new tolling system, then $15 in tolls must be collected, with the other $5 paying for the toll collection system. With the gas tax, if $10 is needed, simply increase the gas tax so that it collects another $10. Real easy. The first link is some nice reading about all the money that they grab in New Jersey, and they only charge 3.2 cents per mile, while the second link deals more with the horrendous situation in Texas:
http://www.users.nac.net/jmp/tollfree/costs.htmlhttp://www.firericwilliamson.com/default.htm
(11) Toll Roads are unfair. You force people to pay HUGE amounts of money to drive on certain roads, while giving a free pass on other roads (and when you do the math, you realize that 20 cents per mile, for an average car, is like paying an EXTRA $4.00 per gallon for gas). Considering that the goal should be get people ON to limited access highways, rather than PUNISHING them for doing so, one can only conclude that toll roads, as they exist today, are totally counterproductive. In fact, to be really fair, the limited access roads should be free, and the surface streets should be tolled – that way you encourage people to stop clogging up local streets and traffic lights. But we are tolled where it is convenient, not where it makes sense.
(12) Big Brother. Look for yourself, not a word about protection of privacy when you travel the Harris County toll roads or use their transponders. On the other hand, they don’t mind collecting your phone number, driver’s license number, social security number, and either bank account or credit card number (so they can pull the money out automatically). What can they do with the information. Well if you use a transponder, it’s likely that some little guy at headquarters can pull-up the information real-time and figure out when you and your wife are both 20 miles away from home (i.e., your house is empty), and call up one of their “friends”. Just an example. It used to be that privacy protection mattered to Republicans and Libertarians, I guess not with toll roads. Go through this site and their transponder application - see if there’s anything about protecting your privacy.
http://www.hctra.com/
(13) CONCLUSION - Tolls are NOT needed. They are a very inefficient way to collect huge amounts of money from the WRONG people. The gas tax has worked fine, it simply has no way to index itself for inflation. In Texas at least (and probably other growing states), an increase in the gas tax is necessary to build the roads necessary to keep traffic moving. Unfortunately, this governor will not do that, instead he is mortgaging away the future of Texas to a private company with no interest other than making us all look like idiots (as they did in Canada).
(14) HISTORY OF PRIVATELT FINANCED TOLL ROADS IN NORTH AMERICA - North America has a checkered experience with private toll roads. The Dullas Greenway, in Northern Virginia, was built privately. The Orange County Toll Road system was built publicly, but used private-sector financing, with no assurance to investors that the government would back up their investments. Both quickly failed, with the promised explosion of development not happening soon enough, if at all. Why is this important? Because future investors see these results and DEMAND lower risks and higher profits. Cintra has learned from this and is able to make a killing in North America. The problem is that its being done on the backs of drivers – it is virtually a zero-sum game.
(15) CINTRA IS VERY SHREWED – Canada learned this lesson the hard way in January. They thought that they had some control over toll rates, but the courts read the contract, and it was clear that Cintra could charge whatever they wanted, and that will hold for the next 95 years!. Are the skills of Governor Perry and his staff up to this level? Probably not. Consider that they announced the agreement with Cintra before it was finalized. This has to be about the dumbest thing you can do. Now Perry has to accept whatever Cintra offers, or otherwise walk away and look like a total fool. On this particular corridor, Texans are about to get screwed big-time, it’s unavoidable.
(16) INCENTIVES – Monopolies operate according to a different set of incentives than regular private business. Since they already have an assured market share, their goal is to maximize profits (which is fine until you read the next sentence). Consider this hypothetical situation with Cintra: Their toll road is wildly successful and starting to get crowded, so they hold a board meeting and Mr. Cintra is given two options: Option 1 - add an extra lane, Option 2 – increase tolls dramatically. This is a real easy decision – just increase tolls. That way you don’t have to pay a dime for new construction, and you get rid of the congestion. The fact that you’re choking off commerce in the state doesn’t matter – after all you’re Cintra, and all that matters is the bottom line. On the other hand, state owned highways have to answer to the taxpayers – which is about the best check you can have on this unrestrained power.
(17) THE HIDDEN MONEY – This is using approximate numbers, but the Canadians learned the hard way (something that Texans are about to do also), that the value of highway, in many cases, can be much more than the sum of its parts. In the Canadian example, the Province of Ontario built a toll road for about $1.5 Billion (highway 407, near Toronto). They then sold this road to Cintra for $3.0 Billion, and were bragging about the $1.5 Billion profit that they made. And it is true, they were able to sell that highway for much more than it cost to build. But then Cintra sold off a 25% interest of the highway, for $1.5 Billion (sorry about the repetitive numbers, but I’m trying to get as close as possible), meaning the TRUE VALUE of the highway was closer to $6.0 Billion. Where did all of this extra value come from? It came from the government, using its powers of EMINENT DOMAIN, to create a much more valuable use of the land. In essence the land value increased many times over, once a uninterrupted path was created between Point A and Point B. The question then becomes: Who should benefit from this much more valuable land. In the case of a freeway, the drivers benefit. In the case of a government-run toll road, the government benefits (and just MAY give some of that back by reducing other taxes – but in any case, the money stays in Texas). In the case of a private toll road, like Cintra plans, the money is simply taken from the state to never be seen again. (and people wonder why I oppose this so strongly)