By JIM ABRAMS Associated Press Writer
© 2007 The Associated Press
WASHINGTON — A cash crunch is fast approaching for the government trust fund that pays to build and repair highways and bridges.
The federal tax on a gallon of gas has not risen in 14 years and Congress is reluctant to increase it. People are demanding more fuel-efficient vehicles — less gasoline used, fewer dollars for the fund.
States already are looking for other places for road-building money — toll road and consumption-based sales taxes, for example. They worry that the fund's looming shortage could hurt their efforts to address traffic congestion as well as environmental and safety problems caused by inadequate roads.
The situation can only get worse in 2009, when revenues for the Federal Highway Trust Fund begin falling short of planned federal spending.
The fund provides the overwhelming bulk of federal dollars spent on highways. It gets its money mainly from the 18.4 cents-a-gallon excise tax that drivers pay at the pump.
Self-service regular now tops $3 a gallon. There is concern the price will reach a price at which people will get serious about cutting back on driving — sending less money into the fund. Fuel tax receipts did dip last summer when there was a spike in pump prices.
About 45 percent of all highway spending comes from the trust fund. With less money available from the fund, states must turn elsewhere for money to expand their highways and fill their potholes. That prospect is making lots of people unhappy.
With the population of Texas increasing by 1,000 people a day, "we as a state don't really feel like we have an option to shelve projects or sit on our hands as the problems with the highway trust fund loom larger and come closer on the horizon," said Christopher Lippincott, a Texas Transportation Department spokesman.
Revenues from tolls, bonds, federal loans and local contributions allowed most of a new turnpike around Austin to be completed more than 20 years sooner than if the state had relied solely on state and federal taxes.
The Texas Legislature is trying to satisfy concerns of Gov. Rick Perry over a bill that includes a two-year freeze on most new privately financed toll roads. The freeze reflects opposition to the Trans Texas Corridor, a combined toll road and rail system from Mexico to the Oklahoma line.
Of the 18.4 cents a gallon in federal excise taxes, about 15.44 cents goes to the highway trust fund, 2.86 cents to mass transit programs and one-tenth of a center to a leaking underground storage tank fund. The tax on diesel fuel is slightly higher.
Close to two-thirds of the trust fund's $40 billion in receipts last year came from the gasoline tax.
Gasoline was only 30 cents a gallon and the excise tax on it was just 3 cents in 1956 when Congress created the highway trust fund. As gasoline prices rose, so did the tax. But a tax-adverse Congress has kept it at 18.4 cents a gallon since 1993, when gasoline prices were about $1.10 a gallon.
Two years ago, lawmakers proposed a 4-cent-per gallon boost in the fuel tax to finance a $375 billion highway bill. They backed off when President Bush pledged to veto any road legislation with a tax increase. In the end, the spending plan came to $286 billion.
At the end of 2000, the highway trust fund had a balance of almost $23 billion. By the end of 2006, that balance had fallen to $9 billion.
The Congressional Budget Office predicts the fund will run a deficit of $1.7 billion at the end of 2009 and $8.1 billion by the end of 2010, when the current highway program expires and Congress will write a new one.
"This crisis will be thrown in their lap right as they are rewriting the program," said Jeff Shoaf, senior executive director of Associated General Contractors of America.
Because investment in new projects is spread over a number of years, every dollar of shortfall translates into a $4 drop in highway spending, he said.
Thus in 2010, the government will have only $20 billion to invest on highways, half the current spending level and less than one-third of the $70 billion that Shoaf said is needed for real road improvements.
"A drastic cut in federal highway and transit funding will result unless Congress steps in," John Horsley, executive director of the American Association of State Highway and Transportation Officials, said in a report.
Horsley's group said the fuel tax would have to be increased by 10 cents per gallon through 2015 to restore the purchasing power of the program.
The Senate Finance Committee is looking into temporary ways to refinance the trust fund, including redirecting some transportation-related taxes that now go into the government's general account and clamping down on gas tax fraud. A Transportation Department commission also plans to issue recommendations by the end of this year.
By the middle of the next decade, the highway trust fund will be providing $100 billion to $150 billion below real needs for building highways and bridges, predicted Rep. Peter DeFazio, chairman of the House Transportation and Infrastructure subcommittee on highways and transit.
"In the long run we've either got to admit we are going to underinvest and accept more gridlock and congestion" or find new revenue sources, said DeFazio, D-Ore.
What is clear to him is that raising taxes of any kind for the highway trust fund is possible only if people are convinced that more spending will mean less congestion, safer roads and a cleaner environment.
The public will not support new taxes "just to throw money in the maw of the federal government," DeFazio said.
On the Net:
Federal Highway Administration: http://www.fhwa.dot.gov/
American Association of State Highway and Transportation Officials: http://www.transportation.org/
American Road and Transportation Builders Association: http://www.artba.org/
Associated General Contractors of America: http://www.agc.org/
Jacksonville Freshman Senator Makes Big Waves
By ROY MAYNARD
Staff Writer
A freshman senator should be seen and not heard - that's the conventional wisdom, at least.
State Sen. Robert Nichols, R-Jacksonville, isn't conventional. In his first legislative session, he's vice-chaired a committee, brokered deals and won passage of significant legislation.
And, he's led a fight against his own party's governor over private toll road projects.
"My intention for this session was to listen and learn, and to try to take care of my district," Nichols said. "It wasn't to charge off on any big things right away. But when I see something wrong, I have to act."
A former two-term Texas Transportation commissioner, Nichols knows the issues surrounding the privatization of toll roads. And it was that experience his fellow senators looked to when faced with Gov. Rick Perry's drive to advance projects such as the Trans-Texas Corridor.
"I have been in this body for 14 years, and I have never seen the senators coalesce as unanimously around one issue as they have around Robert Nichols' bill," said Sen. Jane Nelson, R-Lewisville. "He has wonderful credibility because of the years he served on the Transportation Commission."
And he went about it the right way, she added.
"Before he drew attention to the concerns he had, he sought to solve the problems that he saw in the bill (with the bill's author)," she said. "When that didn't work, he showed us (in the Senate) where there could be some missteps, and he convinced us of the need to slow this train down. And he did that senator by senator."
It was a bold move, she said.
"It was so important to him to do what was right that he was willing to risk the wrath of the governor of his own party - as a freshman," Sen. Nelson said. "He has great respect in this body."
A DAY IN THE LIFE
Nichols begins his day promptly at 5:30 a.m.; his work at the Capitol can start as early as 7:30 a.m. with committee meetings, though the Senate usually doesn't convene until 10 or 11 a.m. On one recent Wednesday, he attended one committee meeting for about an hour, then he had to leave to lay out two bills before another committee.
Between committee meetings and the convening of the Senate at 11 a.m., he had about 15 minutes free. That was spent in a meeting at his office with about five people who objected to another bill.
When the Senate adjourns at about 3:30 p.m., it's more committee meetings and public hearings. All the while, his staff is preparing his "football," the pile of bills and analyses he'll take home for study.
"I don't go to dinner with lobbyists, though I get half a dozen invitations a day," Nichols said. "I don't know how people can, and still do their homework. If you let yourself get behind on the bills, you don't know what you're voting on, or you're just going by what your staff tells you."
He works his way through the "football" until as late as midnight.
"I make myself stop around 11:30 p.m. or 12 a.m.," he said. "I just have to quit. I have to realize this isn't a sprint, this is a marathon."
MAKING CONNECTIONS
"Before I got here, I didn't realize how important working relationships between members are," Nichols said. "Just 11 members can block any piece of legislation, so you have to be careful. On any day, you may be helping someone on one bill, and then vote against them on the next bill. You've got to be civil, and you can't take it personally - because you're going to need their help on your next bill."
Nichols arrived with some connections already formed.
"I've been working in Austin since 1997, so I've worked through five sessions," he said. "I've worked with members of the House, the Senate, with Republicans and Democrats, with urbans and rurals. I worked as a (Transportation) commissioner to help them to solve problems, and now here I am, working with them again. It's like I got a running start."
No one senator can be fully knowledgeable about all the issues that come before the body.
"We all have different areas of expertise," Nichols said. "We have lawyers, a doctor, some former mayors. When we get to difficult issues, we can share our pools of resources and experiences."
Sen. Nelson said Nichols' expertise goes beyond transportation - he's also an engineer.
"I'm married to an engineer, so I know how they think. It's not like the rest of us," she said. "Robert Nichols doesn't grab the microphone and just start talking. He listens, he takes copious notes, and when he finally raises his hand, his questions and comments get straight to the essence of the issues. It's that engineer's brain."
Nichols' credibility goes across the party lines, adds Sen. Royce West, D-Dallas.
"He's brought a wealth of knowledge to this body," said West, who chairs the Intergovernmental Relations Committee Nichols serves on. "Credibility is something you develop over time. And I would say Robert Nichols is putting a solid foundation in place for that."
GOING AGAINST THE GOVERNOR
It wasn't an easy decision to make, Nichols said. But parts of the governor's transportation plans - 50 contracts with private firms, for example, and non-compete clauses that could prevent the state from improving its own roads - were untenable. He wanted a two-year moratorium on private toll projects.
"It makes me sick to have to do this," Nichols said. "Gov. Perry has done an incredibly positive job on transportation. I have a problem with one area of one tool that he's given us. He's been a pioneer. But they say pioneers are the ones who get the arrows shot at them, and he's getting some arrows now."
A compromise reached late last week could prevent a showdown or a special session on the toll roads issue. Nichols said he can live with the compromise - it includes the two-year moratorium on most new toll road projects and establishes broad protections for the private toll roads that are built.
"This provides the protection the state needs," he said.
Late in the day on Friday, however, that compromise appeared to be falling apart. But Nichols said he'll watch the bill as it comes back through the Senate.
Keeping legislation on track is different now that he's a senator, Nichols said. As a transportation commissioner, he explains, he could help some people with some problems. But now, he adds, he can file bills, he can vote, and he can broker compromises.
"I enjoy the work," Nichols said. "I can be effective here."
Trans-Texas Corridor PING!
SB792 Has Fatal Flaw.
No Amendment, No Moratorium.
There is a fatal flaw in the language of SB792 that would allow TxDOT to proceed with construction of TTC-35, even if the bill becomes law. On May 17, Rep. Lois Kolkhorst fixed that loop hole with House Amendment #13.
The Governor has demanded that amendment 13 be removed from SB792.
In a document circulated to Senators the Governor's Office complains that, "No segment of TTC-35 can be built during the moratorium, except Loop 9, which is exempted from the moratorium." Of course that is exactly the whole intent of introducing the moratorium bill.
Governor Perry has said he would sign a moratorium bill, but that was when it wouldn't stop his TTC. Now he has changed is tune and is pressuring Senators to strip the amendment off SB792 effectively eliminating any moratorium on the TTC.
There will be very little if any benefit to most Texans from the passage of SB972 if is fails to contain the provisions of amendment 13 that put an enforceable 2-year hold private CDA projects.
Amendment 13 will not effect North Tx projects.
None of the projects exempt from the moratorium under SH792 will be effected by the inclusion of amendment 13. SH121, SH161, Loop 9, I635, I820, SH130, and SH45SE can all continue without delay.
For a full explanation of the issue with SB792 and why need amendment 13 CLICK HERE.
Have We Been Sold Out? Afraid So!
By the time you read this the Governor's office may have already out maneuvered us all by effectively removing Trans Texas Corridor TTC-35 from any moratorium limitations in the pending bill, SB792.
The Governor's office has targeted seven House amendments for removal.
Things are moving so fast there may be no time for anyone outside a small circle of key legislators to impact the outcome. By Monday it is likely that Governor Perry will have his way and the citizens of Texas will have been sold out at the highest levels of it's State Government.
The Governor's representatives Kris Heckmann and former Senator Kenneth Armbrister arrived to visit Texas senators shortly after 11:00am Friday morning. About that same time a three page analysis/summary of SB792 amendments, reportedly prepared by Kris Heckman, was circulating among Senators.
CorridorWatch has been told that seven amendments have been targeted by the Governor's office for removal. Among those are one by Pickett [6] effecting the El Paso RMA; one by Callegari [12] they believe was misdrafted; three by Kolkhorst [13, 15, & 16] effecting TTC35, CDA penalty payment funds, and a prohibition of investment firms being on both sides of a CDA; one by Quintanilla [22] a county contract provision; and, one by Y. Davis [27] requiring land taken by condemnation be offered back to the owner if unused.
Lieutenant Governor David Dewhurst met on the floor of the Senate Friday morning with Senators Williams, Carona, and Nichols in an apparent attempt to convince Nichols to agree with removal of the offending amendments (Nichols has since been named to the Conference Committee). It is widely believed that Nichols is unlikely to agree with efforts to weaken the bill.
It was Dewhurst who forced SB792 in to play in the first place thereby making his intent to yield to the Governor's wishes very clear. As expected the Senate members named to the conference committee are stacked in favor of producing the Governor's desired outcome. With only three votes out of five required it is unlikely that Nichols will find enough support among the other conferees to preserve the moratorium or other amendments.
You may recall Austin political insiders predicted that the legislature would fold under the Governors' pressure. We had given them more credit, but that may prove to be sorely undeserved.
Conference Committee Members.
House Conference Committee members will not be formally named until Monday. But that doesn't mean that Rep. Smith hasn't got them picked and begun the process of looking at the bill language the Governor expects them to agree on.
CorridorWatch has been told that Senate conferees will start meeting today, Saturday. And word has it that Senator Carona will start 'visiting with likely House conferees' this weekend as well.
Anything can happen in conference, but this time the sheet music has been supplied by the Lt. Governor and the Governor is calling the tune.
CorridorWatch was wrong!
Have you heard that HB1892 won't effect TTC-35? We had, and we thought that it was a load of baloney. Unfortunately, we were wrong. Now we know it and they know we know it.
There is no question that it was always the clear legislative intent of HB1892 and SB792 to stop TxDOT from proceeding with any TTC facility construction during the two-year moratorium. Everyone knew that including the Governor and TxDOT and yet they let the legislature believe that these bills would do that. In fact the Governor went on record saying that he would sign the moratorium.
Amendment 13 to SB792 offered by Kolkhorst closes a moratorium loophole in HB1892 by including TTC-35 CDA facility agreements. The only exception would be Loop 9. Representatives Anderson, Bohac, Darby, Miles, Miller and Zerwas joined Kolkhorst as coauthors of this amendment.
If only one amendment survives the Conference Committee it needs to be Amendment 13.
Amendment 13 is "Do or Die" for TTC-35.
It is no surprise that Kolkhorst amendment 13 is on the Governor's hit list. If we are to have an enforceable moratorium on the TTC, we must have amendment 13 remain on SB792.
Amendment 16 is just good business practice.
Rep. Kolkhorst also doesn't think that the financial advisor who develops the market valuation for a project (for the toll authority or TxDOT) should also advise the company that will finance, build, develop or operated a TxDOT toll project. This is another amendment that is targeted for removal.
This and other amendments also have merit, but we can't save the world, and were not too sure we can save ourselves from the Trans Texas Corridor.