Tuesday, December 19, 2006

Texas now paying millions to contractors who don't get the bid

The 2003 Texas transportation bill had an odd provision that has contractors grinning all the way to the bank. If they make a bid on a state transportation contract and they don't win the bid they will be paid just for bidding.

This is all part of the biggest boondoogle in Texas history - the billions of dollars going to mostly foreign firms to build massive toll road projects.

Why is this happening, who approved it?

The lobbyists who write the bills and fund the candidates found very willing partners in the GOP leadership. Voters approved many of these measures in the unclear language of consititutional amendments that Gov. Perry pushed. Who benefits - the corporate friends of the politicians and the politicians.
Some toll roads, as well as the super-corridors, will overlay portions of existing highways or rural farm-to-market roads. Since they’ve already been paid for through the taxes at the pump, critics maintain that Texans are paying twice for the roads, a concern that was echoed by legislative analysts. “Toll roads represent double taxation,” they wrote. “Motorists already pay for highways at the gasoline pump, vehicle registration counter, and at auto supply retailers. They should not have to pay for highways again when they exercise their right to travel on them.”

Far less attention has been paid to other ways the public is underwriting the privately operated toll roads: the large, multinational companies and global investment firms are often using taxpayer-supported bonds, loans, and grants from sources such as Texas’ State Infrastructure Bank, the Federal Highway Administration, and the Federal Department of Transportation. These private firms will be able to deduct millions from their income taxes for interest payments on the huge debts and won’t be paying property taxes because the state will still own the roads. (With large swaths of property removed from the tax rolls, property owners may find themselves making up the difference.) The state will also be helping to subsidize the profits these firms earn by performing a lot of the advance environmental work and providing emergency services and law enforcement personnel once the roads are up and running.

Among the greatest ironies is that the super-highways won’t really do much to reduce congestion, a fact that Chairman Williamson confirmed during a recent commission meeting while trying to allay the fears of businessmen and communities who worry they’ll become ghost towns once the new roads go through. In a question-and-answer session with Amadeo Saenz, TXDOT’s assistant director of engineering operations, he asked, “Is it also my understanding that we have a congestion relief study ongoing to determine what percentage of traffic moves off of Interstate 35 and onto the parallel?”

“Yes sir,” responded Saenz.

“Is it safe to say that no less than 2.5 percent and no more than 10 percent of the traffic is going to fall somewhere in that range?” asked Williamson

“Yes, sir.”

“So for those who live in, for example, Hillsboro who believe that Interstate 35 is their economic lifeblood and the parallel might have the same impact on their city as Route 66 had on some cities in Oklahoma, we can represent to them that it appears, least-case your traffic shrinks 2.5 percent, worst case it shrinks 10 percent, and in no circumstance should that be enough to markedly impact your local economy?”

“That’s correct,” Saenz responded.
Very good Texas Observor article, read it all.

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