March madness over tolls grips Legislature

Vexed by private tollway deals, affronted by TxDOT's attitudes, Legislature looks to rein in Perry's turnpike push

By Ben Wear <http://www.statesman.com/news/content/region/legislature/stories/03/19/mail to:bwear@statesman.com>

AUSTIN AMERICAN-STATESMAN STAFF

Monday, March 19, 2007

Mike Krusee looked tired.

The Republican state representative from Williamson County, interviewed at his Capitol office last week, for 10 days or so had been fighting what some people call the creeping crud, a debilitating mixture of cold, flu and allergy symptoms hitting many Central Texans this spring.

But Krusee, for much longer than 10 days, has also been fighting the creeping realization among legislators that over the past two sessions, they might have granted Gov. Rick Perry and the Texas Department of Transportation too much power to create toll roads. For the first time in his three sessions as chairman of the House Transportation Committee and the leading legislative architect of toll road policy, Krusee is having to play defense.

For a number of reasons - campaign trail grumbling last year, disputes with Dallas and Houston toll road agencies, lack of deference to legislators by Texas transportation commissioners, turf battles over huge pots of money suddenly coming Texas' way the Legislature has been gripped by a sort of March madness over tollways, particularly those that would be in private hands for a half-century.

What remains to be seen is what the madness will lead to by the end of the session May 28. As transportation chairman, Krusee can, in theory, block most legislation seeking to roll back tollway powers. And Perry could veto whatever makes it to his desk.

But more than two-thirds of the Legislature has signed on to legislation that would put a two-year moratorium on concessions, contracts with private companies to build and run toll roads. Dozens of other bills limiting tollway powers have been filed. And powerful legislators, including Senate Finance Committee Chairman Steve Ogden, R-Bryan, are talking about using the power of the purse to curb the Transportation Department.

Perry and Krusee may have no choice but to make concessions on concessions and on other prongs of their toll road agenda.

"Watch the budget," Ogden said. "At the end of the day, TxDOT can't spend a dime without our permission. So, watch the budget."

Ogden has a unique role in the situation.

In 2003, when he was chairman of the Senate Transportation and Homeland Security Committee, Ogden sponsored House Bill 3588, a humongous bill that, among other things, authorized Perry's Trans-Texas Corridor plan and allowed the state to enter into concession agreements with private companies. That bill, conceived and carried by Krusee in the House, basically made possible everything that Ogden and most of the Legislature are now stewing over.

Ogden has filed bills that would prohibit the granting of long-term road leases and require that toll roads become free roads when money borrowed by government for construction is paid off. He says tolls should be a mechanism to get a specific road built,

not a profit center. Those two short and simple measures would gut the Transportation Department's toll road policy.

Ogden was asked for his take on why he and so many other lawmakers have had second thoughts about their 2003 handiwork.

"What's going on? We had an election, that's what," Ogden said. "All we're doing is reflecting what we heard on the campaign trail."

Others paint a more complicated picture. Repercussions from HB 3588 were already being felt when the Legislature met in 2005. There was grass-roots toll opposition in Austin and San Antonio and widespread unhappiness among farmers and ranchers about the corridor plan to build 4,000 miles of tollways, railroads and utility easements. But although the Legislature made some tweaks in 2005, mostly to appease the rural concerns, nothing like this session's Category 5 blowback occurred.

It's one thing to upset residents of Austin or Fayetteville and quite another to get crosswise with toll road agencies in Dallas and Houston.

The Transportation Department, in its zeal to award long-term toll road leases to private companies and thus reap multibillion-dollar upfront payments from them, has managed to alienate the North Texas Tollway Authority and the Harris County Toll Road Authority.

The local authorities want first shot at operating toll roads in their areas and feel that the state agency has shouldered them out of the way.

On Feb. 27, the Transportation Department awarded a contract for Texas 121, a road in suburban Collin County north of Dallas, to a partnership headed by Cintra, a Spanish toll road company that earlier won a bid to build 41 miles of the Texas 130 tollway southeast of Austin with Texas partner Zachry Construction. Cintra said it could give the state $2.1 billion upfront and $750 million more over 50 years for Texas 121.

The North Texas Tollway Authority declined to bid on that contract, a choice that, depending on who is telling the tale, may or may not have been made under pressure from Texas Transportation Commission Chairman Ric Williamson and his department.

In Houston, the Transportation Department said in April that it wanted more than $1.2 billion to sell some right of way to the Harris County authority for three more toll roads. That huge price reflected not the real estate value, but what the state could

get from a private tollway operator.

Those kinds of huge upfront payments from private road operators excite Williamson and other tollanistas. But they come with a probable consequence to consumers - higher tolls - and stoke fear that the state is underselling the farm to tollway companies.

And legislators are made nervous by the Transportation Department's newfound ability to generate towering wads of cash independent of the state budget.

The Dallas and Houston episodes, along with Williamson's sometimes off-putting certitude about toll roads, have earned the Transportation Department some vigorous enemies in the statehouse, most prominently state Sen. John Carona, R-Dallas. Carona, chairman of the Senate transportation committee, has used that pulpit to bash Williamson and the agency. He also has a thick packet of tollway rollback legislation pending.

Then there is freshman Sen. Robert Nichols, R-Jacksonville, a former transportation commissioner and Williamson ally who is unhappy about language in the pending Texas 130 contract that he says would either tie the state's hands from building free roads near Cintra's section of Texas 130 or force the state to pay Cintra-Zachry tens of millions of dollars in the future. He has filed a Senate bill, with 24 co-sponsors, for a two-year moratorium on private toll road contracts.

State Rep. Lois Kolkhorst, R-Brenham, has a House twin that has 97 co-sponsors.

Those freeze bills, and most of the other toll road bills, may never move, however. This month, Carona has met in private at least three times with Krusee, Williamson and Perry transportation aide Kris Heckmann with the intention of creating an omnibus transportation bill to include elements from the pending bills as well as policy changes sought by the Transportation Department.

"It's important that we take these ideas now and wrap them into some piece of policy that is balanced and makes the most long-term sense," Carona said. "In all fairness, the Legislature has not left the commission with many options other than the pursuit of toll roads."

Which brings up the gas tax. At 20 cents a gallon and holding since 1991, the tax is falling far short of meeting the state's need for new pavement. Carona and Krusee have separate bills to make automatic annual increases to the tax, based on different measures of inflation. Initially, Carona's bill might increase the tax 3 cents a year and raise about $300 million more a year. Krusee's bill might generate a sixth of Carona's.

Neither will come close to eliminating the need for new toll roads.

Perry spokesman Robert Black said the governor, who has steadily opposed gas taxes, "is not going to close the door" on a gas tax indexing bill. Black suggested that if lawmakers take away some powers, "they need to replace them with something. . . . If the Legislature wants to make changes, additions, amendments, that's fine. But let's make sure it pushes forward."

bwear@statesman.com ; 445-3698