The conventional wisdom among conservatives about the benefits of privatizing government programs is being severely tested in a heretofore largely obscure controversy that is now blossoming in America’s heartland. When up to several thousand people gathered in vigorous protest March 2 at the majestic state capitol in Austin, there were echoes of the formative beginnings of similar grassroots protest movements of other eras, in which the organizers were not professional political activists, but rather genuinely fed-up ordinary citizens motivated by a combination of self-interest and patriotism to seek a legitimate redress of grievances. Almost 30 years ago, a similar citizen protest movement in California over high taxes (the Prop 13 movement) sparked a national political wave that helped elect a conservative president in 1980.
It remains to be seen if the current brewing controversy in Texas will have the same kind of political “legs,” but it is surely worth watching. At issue is the efficacy and wisdom of Texas’ grandiose public plan to phase in the construction of a statewide network of over 4,000 miles of new toll roads designed to improve the state’s transportation infrastructure to meet the demands of expected booming population growth in the 21st Century. The heavily-traveled Laredo-to-Dallas route, currently served by Interstate 35, is the initial focus of attention. The plan, which is strongly backed by Texas’ Republican Governor Rick Perry, was authorized in state law several years ago with relatively little fanfare by bipartisan majorities in the state legislature.
The plan’s central feature calls for the financing of the new highways through so-called “public-private partnerships” in which private companies will be permitted to invest billions of dollars in up-front capital to build the roads (or sections of roads) in return for the lion’s share of the revenue that tolls on those roads will generate over contract periods of 50 years and more. The tolls are supposed to not only pay the private companies back for the cost and maintenance of the roads, but also to provide these companies’ private investors with a healthy long-term profit.
Such an arrangement sharply breaks tradition with how major highway infrastructure has been financed and built in the United States since the highly successful Interstate highway program began in the mid-1950’s. The building of America’s Interstates, widely considered to be one of the largest and most positively consequential construction projects in human history, was the result of a wholly-owned multi-billion dollar government program financed on an essentially pay-a-you-go basis through Federal and state excise taxes levied on gasoline.
By contrast, the Texas toll road plan, commonly known as the Trans-Texas Corridor (TTC), is being promoted by its backers with the confident assertion that it will involve no new taxes and no government funds or public-account deficit spending, state or federal. Instead, it is claimed that the vaunted “private sector” will bear all the costs, debt, burdens and risks involved. And it will get new roads built, relieve traffic congestion and bring economic benefits to local communities at least 30 years faster than could be possible with the existing gas-tax funded programs. So who could possibly be against that?
Enter Hank Gilbert, businessman, rancher, and last year’s unsuccessful Democrat candidate for state agriculture commissioner, who played a central role in organizing the eclectic March 2 protest rally against the toll road plan at the state capitol. The sign-waving gathering of many farmers and ranchers included assorted “Reagan” Democrats, conservative Republicans, and independents of varying stripes. “There’s no doubt there’s a huge groundswell of opposition to the TTC,” Gilbert said, noting that after examining the emerging details of what they voted for, “politicians will realize that those of us who’ve been fighting this thing are not just lunatics.” He cited one of the bill’s original co-authors in the legislature who now has major qualms about how it is being implemented.
TTC opponents, who overwhelmed a recent open legislative committee hearing with requests to speak, cite a litany of concerns. While some on the other side suggest these concerns are wrong, overblown, or dip into “black helicopter” territory, it is clear that most of these issues are not going away anytime soon. For example, it is said by TTC opponents that:
- “Private sector” in this case largely means foreign-owned financial holding companies that will end up essentially owning vital U.S. transportation infrastructure in perpetuity along with preferential rights to concessions and economic development activities (including the building of hotels and shopping malls) within the roads’ rights-of-way.
- The necessary abrupt taking of private property through “eminent domain” and the lack of adequate interchanges and on-off ramps on the proposed new toll roads will wreak havoc on property owners, countryside landscapes and local communities, unnecessarily disrupting traditional in-state travel patterns and forms of commerce.
- The real hidden purpose of the project has little to do with benefiting the citizens of Texas, but is rather designed to facilitate burgeoning NAFTA freight traffic–shipping imports arriving at Mexican ports directly to points north–to Kansas City and beyond. The idea is to help create an eventual “North American union” of essentially borderless commerce whose unintended consequences will involve more illegal immigration, smuggling, and foreign terrorism.
- The tolls will be configured in a way to benefit foreign investors, meaning they will be higher and much longer-lasting (if not permanent) than commonly used tolls merely designed to pay off costs of construction and maintenance. Indeed, the necessarily higher interest costs will make the actual overall costs of the roads themselves considerably higher than if funded through normal government mechanisms.
- The difference between “taxes” and “tolls” will be lost on road users, who will end up paying twice for transportation projects as the plan envisions no elimination or reduction of existing gas taxes.
- In sum, the project threatens the safety, security, and sovereignty of America in the name of globalization and unfettered free trade.
On the other side, TTC supporters, who include officials of the Texas Department of Transportation and many Republicans led by Governor Perry, reject all of these arguments. They point to the huge potential economic benefits of improved transportation and the innovative leveraging of private financing that can be a model for the rest of country, saving taxpayers billions of dollars over the long term.
In the process, they suggest that conservatives should be pleased to endorse the implementation of their own long-standing rhetoric about the positive idea of “privatization” as a better and more efficient way to do jobs that government bureaucrats need no longer do. Judging by the “conservatives” standing for hours in the Austin sun the other day, it appears that many are not yet so pleased.