By Terri Hall - T.U.R.F.
SB 792 ... unleashed an entirely new animal called "market valuation." This is Rick Perry's and the highway lobby's deceptive gimmick to make you think they can somehow apply free market competitive principles to government-run monopolies, aka - highways. Sounds great, right? Let's look inside. Our government tolling authority will now have URS, KPMG, and Citigroup determine how much profit the RMA can make by raiding YOUR wallet by charging you a toll tax to drive on what your taxes already built and paid for. Let's say the amount of profit over and above the cost of actually building the road is $4 billion. The RMA would then have to sell bonds to come up with that up front $4 billion fee that will then go into a TxDOT account to be used on roads elsewhere in the region. So the toll isn't a user tax (as we've contended all along). This translates into the HIGHEST POSSIBLE TOLL TAX, even Jaime Castillo of the Express-News agreed. So now your toll will cover the cost of construction AND the up front fee just as if Cintra were doing it!
It's the most elaborate Robin Hood scheme and unfair distribution of transportation taxation ever devised. ALL traditional turnpikes have been replaced by the "market-based" toll deception. How high is high, we're seeing rates as high a $1.50 a mile in Austin. The average is more like 40 cents a mile (compared with 1-3 cents a mile in gas taxes). Go to our toll tax calculator on the home page of our web site and calculate how many THOUSANDS in NEW TAXES you'll have to pay IN ADDITION to skyrocketing gas prices! Add to that, the Texas A&M Study last fall flat out stated WE DO NOT NEED TO TOLL A SINGLE ROAD. Yet, the Legislature failed to address the gas tax issue preferring instead to tap the vein (revenue stream) of commuters stuck in congestion. Folks, if you keep voting for the same recycled candidates and for politics as usual, we're going to keep getting fleeced. It doesn't matter how much tax money you give them, it'll NEVER BE ENOUGH! We need a revolution! VOTE THE BUMS OUT!
...
Here's the 19 who voted AGAINST this nonsense: Nathan Macias led the charge along with David Leibowitz, Lon Burnam, Joaquin Castro, Garnet Coleman, Joe Farias, Jessica Farrar, Stephen Frost, Ana Hernandez, Jodie Laubenberg, Trey Martinez Fischer, Ruth McClendon, Sid Miller, Ken Paxton, Robert Puente, Joe Straus, Senfronia Thompson, Marc Veasey, and Mike Villarreal.
Support them with your money not just your vote!
Showing posts with label Market Valuation. Show all posts
Showing posts with label Market Valuation. Show all posts
Friday, August 03, 2007
Wednesday, May 23, 2007
TX - Action Alert - Tic Tic Tic the Clock is tickin' - TTC bomb buried in legislation
by Faith Chatham - Daily Kos and Texas Kaos -Wed May 23, 2007
Gov. Perry insisted that MARKET VALUATION be inserted into Texas Senate Bill 792. This is a long bill. They did not open this bill to public testimony. They rushed it through the Senate, suspending the rules so that they could take all three reading in one day and vote it out of the Senate untouched. It became known as Perry's compromise transportation bill and was seen as the last chance to get the 2 year moratorium on toll roads passed and signed into law by the Governor.Read more
Fortunately on the floor of the Texas House there were a few people with more spine than the lap dogs in the Senate who red stamped Perry’s dictates. Some DFW area reps argued against application of Market Valuation on SH 161. They didn't touch the real problem but only complained that it might slow down the projects. The big problem in that adding market valuation turns all toll projects into CDAs requiring rates high enough to generate billions of dollars of surplus toll revenue to be paid as concession payments to the RTCs and TxDOT!
Tuesday, May 22, 2007
T.U.R.F. warns that Market Valuation in SB 792 allows backdoor CDAs
MARKET VALUATION(IE - CONCESSION FEES) WILL BE MANDATORY ON ALL TOLL PROJECTS IF SB 792 PASSES AS WRITTEN! TRADITIONAL TURNPIKES NO LONGER AN OPTION!
A third party appraiser would determine the market value of the road and that amount, once agreed upon by TxDOT and the tolling entity, would be deposited in subaccounts JUST LIKE A CONCESSION FEE with CDAs! Motorists taking that tollway will then be charged OPPRESSIVELY HIGH TOLLS beyond the cost of building that specific road since the toll rate now has to cover the upfront fee (which is just like a concession fee!).
“Market valuation” is TxDOT and the Governor’s GOTCHA in SB 792. In speaking with many legislators, most DO NOT KNOW THIS and thought market valuation only applied to the buy back provisions or were optional or applied only to certain projects. Senator Robert Nichols added an amendment stating if both the tolling entity and TxDOT CANNOT AGREE on the market value the project cannot move forward. However, most legislators don’t realize this means the PROJECT DIES and cannot go forward USING THE TRADITIONAL TURNPIKE model. So unless your tolling entity can agree with this rogue agency, YOUR PROJECT DIES ALTOGETHER!
Market valuation tolling is like a back door CDA! Do we really have a CDA moratorium when this is the case? Will your constituents back home think YOU VOTED FOR A WIN when they’re going to be charged OPPRESSIVELY HIGH tolls anyway?
We fear this opens another can of worms that will bring regrets similar to HB 3588. Many wanted to “correct the sins of the past” this session in regards to tolling and for having “created a monster” in TxDOT.
Here's what Senator Robert Nichols said about market valuation in the Lone Star Report, May 21, 2007: "For the first time you're having a county toll authority or a regional mobility authority that is going to have to come up with a front end concession, kind of like a private entity. They're going to have to commit to spend those funds. Either to TxDOT or to other projects in that area."
Is getting a compromise bill signed more important than enacting good transportation policy that’s been fully vetted and had the proper public debate? Unleashing yet another monster on the taxpaying public with provisions stuck in a bill at the last minute should cause us all to pause. It’s clear few knew what they were voting on last week. This Legislature needs to step back and focus on getting a good bill passed, not on special session threats or rushing to the finish line empty-handed. May it be said you finished well, and in a way that you won’t regret back home.
Signed,
Terri Hall
Founder/Director
Texans Uniting for Reform & Freedom (TURF) &
San Antonio Toll Party
www.TexasTURF.org
Monday, May 21, 2007
What is so bad about the “apply market valuation” clause in SB 792?
Q. Does this clause give landowners a better price for land confiscated by eminent domain?
A. No, in this bill, they are referring to market valuation for the ENTIRE INFRASTRUCTURE PROJECT rather than for getting an appraisal on the real estate before they pay the land owner. There are rules that apply to acquisition of land by eminent domain which will not be changed by this phrase in this bill.
Q. What is Market Valuation as used in HB 792?
A. What they are referring to is HOW THEY VALUE the land years after it is acquired, how they VALUE the entire infrastructure throughout the life of the contract.
Q. Is it a common practice?
A. Applying Market Valuation to state highway projects is a new concept. Market Valuation is a private sector practice where an owner of an asset values that asset over time as the value of the real estate escalates. As demand for adjacent property rises, rental and usage fees rise to reflect what the private company would have to pay for that house or business or real estate on the day they lease it to a user. For example, a friend of mine rents a house she purchased for $20,000.00 but which appraises on today’s market for $45,000.00. Years ago she charged $150.00 a month for rent but today she charges $750.00 a month for a tenant to rent the house.
This is a common practice in the public sector because she used her personal funds or credit to acquire the property. She is not a public housing authority which uses public funds.
Q. Why is it a such "big deal" in this particular bill?
A. Until a few years ago, only public toll authorities were legally allowed to build toll roads in Texas. With changes in the law, we now allow private companies to partner with the state to build toll roads. We also have public toll authorities which build toll roads in Texas. Public and private toll companies are in competition for bids on lucrative projects. Public toll companies (like NTTA) have an advantage in the bidding process because they operate on different rules than private companies like Cintra. A private company is supposed to invest private investor capital into the project and the private investors, wherever they live in the world, get a return on their investment and they can spend or invest that money anywhere in the world in any kind of project they choose. A public authority uses taxpayers money as an agent of the people and the return or user fees goes back into the public coffers, not to private investors. The return must remain in the region for use on public works projects for the public good.
Q. What about use of right of way?
A. If a private company use right of way owned by the state, frequently they must pay a today’s value for that right of way when they acquire the right to use it because they are a company of private investors making a profit off of the taxpayer’s assets. A public authority should not have to pay today's value for acquisition of the right of way because they are agents of the people, whose money was used to acquire the asset and who will be the customers who use the finished transportation project. Profit (or return on stockholders investment) should not apply to public works (public toll authorities) projects.
A. Are there any exceptions?Q. In some versions of legislation that have been passed by various houses of the Texas Legislature (but which have not to date been signed by the Governor), there was language to allow private or public toll authorities to utilize the right of way at the same cost or no cost and not include the difference between what it actually cost the state to acquire the right of way and what the right of way costs today (market valuation) into the project cost. The idea is to try to keep project cost down so lower costs would allow lower usage fees to the public. But that language was an EXCEPTION to normal practices in the private market place.
Q. When Market Valuation is applied to a project, does it apply to anything other than the real estate cost?
A, Yes. By applying market valuation to a project means each year value would would be base on what it would have cost to build that project that year, instead of what it actually cost to build it when it was built. That means calculating what supplies would have cost at current rates of inflation, what real estate would cost if acquired during the year when they are computing the current year's market valuation, what labor would cost now vs. during the year it was actually built. Applying market valuation means that building supplies, labor, land cost, engineering fees, studies, actually every project cost is calculated based on the current rate of inflation and cost for those design/build/acquire elements for the project based on the cost in each year of the contract. It is suspected that projects will cost much more 50 years from now than they do today. Applying market valuation to a project means that what it would cost to build that project 50 years from now is the cost that will be used to calcuate the rates in the formula used to calculate user fees and potential buy-back costs.
Michael Morris of the NCTCOG RTC says that every project they have escalates in cost about a billion dollars a year. Applying Market Valuation to a public toll project would mean that instead of the project costs remaining what was ACTUALLY SPENT by the government on behalf of the people to build that project, they will be artificially applying a bookkeeping model to the project cost each year which will include what it would cost should they build that project at different years in the contract.
Q. Why did Gov. Perry insist that this language be inserted in SB 792?
A. That is a good question and the only way to answer it is to speculate. Pushing application of Market Valuation to public toll projects levels the playing field between Cintra and the NTTA. It removes the advantage of using a public toll authority to build the project. Rick Perry received substantial campaign contributions from Zachry and Zachry family members and associates during each election cycle he has been in office. Zachry is Cintra's partner and TxDOT favors Zachry-Cintra as contractor for the lucrative TTC project and for SH121. TxDOT was not pleased when legislation was passed which required allowing public toll authorities have the "right of first refusal" in bidding on projects in their region.
I think that requiring application of Market Valuation to public toll authorities bids is a tool that Perry’s administration is trying to use so that Cintra and private investors will have a better chance to win state highway toll contracts. (Private investors charge the taxpayer twice what most public toll authorities charge the public to use the infrastructure).
Q. Why shouldn't they apply Market Valuation to a public project?
A.MARKET VALUATION OF A PROJECT IN THE PUBLIC SECTOR SHOULD NOT APPLY BECAUSE THE PUBLIC IS BOTH THE INVESTOR AND THE USER.
A public toll authority is supposed to build the project at as low a cost as possible and any return on investment is actually taxpayer’s money and must be invested in other public infrastructure in the region for the benefit of the people or returned to the taxpayer through payments to the government.
The funding for a public toll project is taxpayer funding – either gas money, public bonds, etc.
Market valuation is not something they push so that land owners get more when their land is claimed by eminent domain. It is a technique they are trying to misapply to public toll authorities to make them act like private companies like Cintra. A public company's assets belong to the state/taxpayer and they are supposed to operate at the lowest cost to the taxpayer to use those assets. That is why states and public toll authorities buy right of way years in advance at lower costs than what the market would value that real estate in the year they actually break ground or later in the contract, in the year in which the driver is actually driving on that real estate. After all, it is taxpayer money that pays for the real estate and for the bonds that build the infrastructure.
Q. What is the difference between a private and a public toll authority?
A. In a private company, private investor money is investedto acquire the asset. Their stockowners want as great a return as possible on their investment. They apply market valuation to the project each year they own the asset, modeling what the land and construction costs would be if acquired and built each year instead of what it actually cost them to acquire and build the asset when the land was actually bought and the project was actually built. Each year, market valuation is used to set rental rates and prices charged to "customers" or tenants. This allows the investors, private people, to get the greatest return on their initial investment. The investors are different from the customers.
A governmental (public) entity building an infrastructure project is acting as an agent of the people. Their customer or renter is the taxpayer, and the government as an agent of the taxpayer, invests the taxpayers money as capital to build the project. Market Valuation is not applied to public projects because the taxpayer, (who is also the investor who puts up the capital), is not seeking PROFIT like a private shareholder. The public, or taxpayer, is seeking to have access to the infrastructure at the lowest possible cost.
It is of no benefit to the investor (taxpayer) in a public project to apply MARKET VALUATION BOOKKEEPING MODELING TECHNIQUES to the project each year the road is used. The investor is the user and the user wants the cost to remain as low as possible for him (the taxpayer) to use their public infrastructure asset.
Q. What harm does it do if they track what it would cost to build the project each year if it were built in that year?
A. Knowing what it would cost to build it each year is somewhat different from "Applying Market Valuation" to a project as used in SB 792. Applying market valuation to SH 161 could allow use of inflated building costs and land values to influence the rate of the tolls. It could mean that more public money would be required should the state decided to terminate the contract before the 50th year. Applying Market Valuation means using each year's market valuation in the modeling for toll rates rather than "just knowing" the value of the infrastructure.
A. Why is it so important that we call all the North Texas Delegation and object to their voting to allow Market Valuation to remain in this bill?
B. The cost to the taxpayer to use a public assess constructed by a public toll authority using taxpayers resources should not escalate over time as adjacent real estate escalates n price. Appling MARKET VALUATION to public toll authorities projects as used in SB 792 will force public toll authorities to pretend like they are private entities and they will be raising the cost to the user over time as the real estate costs rises in the market place for adjacent land. Even though the state acquired the land years ago with taxpayer money so that the cost to the taxpayer to use the infrastructure would be low, the rules will be turned upside down and the taxpayer will see their user fees rise as adjacent real estate costs rise.
Q. What is so bad about the “apply market valuation” clause in SB 792?
A. Gov. Perry and TxDOT wants MARKET VALUATION APPLIED because this will generate “more revenue out of the ground” for right of way already owned by the state and paid for by taxpayer dollars without giving any additional benefit to the taxpayer.
TxDOT and Perry and probably the NCTCOG RTC favors applying MARKET VALUATION to public toll projects because it will “justify” higher tolls and enable greater amounts of surplus toll revenue to travel from the project into the TxDOT/RTC coffers for use on other projects. (We’ll see how much of it trickles down and actually gets spent on infrastructure and how much evaporates in transit). TxDOT favors it because it insures lots of transportation engineers will continue getting paychecks should federal funds dry up because we miss air quality attainment standards.
Q. Who loses if SB 762 is passed with language requring application of Market Valuation to public toll projects in it?
A. The taxpayer. Taxpayers pay for the right of way then it is acquired with gas tax money. Applying market valuation to the project gives private investment companies like Cintra an advantage in bidding. It costs the taxpayer about twice more to use a project constructed by a private toll authority than it should cost if constructed by a public toll authority. Then by applying market valuation to the project, the project cost escalates on paper each year with inflation removing the advantage of having used tax money years ago to acquire right of way. The people get charged on paper artificially high prices for the right of way that was already paid for with the people's money when it is incorporated into a toll project. Then each year, as inflation increases and what it would have cost to build that project in each successive year of the contract rises, they get to apply this MARKET VALUATION TOOL to the project, and can use it to possibly charge greater cost to the public when citizen-taxpayers drive on the highway.
On every front, the taxpayer gets gouged. Double taxation. Escalated values instead of real cost. Inflated user fees “justified” by market valuation in different years of the project.
What they are attempting to do is to jack up the COST of the project on paper so that they can "justify" higher toll rates and higher project costs so that they'll be able to justify artificially jacking up the project pay off cost should the state decide to reacquire the project at some time in the future. The higher the project cost, the easier it is to justify billions more of surplus toll revenue.
We purchase right of way years in advance so that it will require less of the taxpayers money when it is time for us to build new highway infrastructure and it will cost less to the taxpayers to use that infrastructure. Because public taxpayer money was used, the public should be able to use that infrastructure at as low a cost as is absolutely possible during every year of the contract or life of that infrastructure. The entire CDA to generate surplus toll revenue to give to the RTC concept turns the entire concept on its head. Instead of doing it so the citizens can use it as inexpensively as possible, it is build it and now APPLY MARKET VALUATION TO IT in such a way that the citizen will be fleeced as much as possible every time they put their tires on the highway.
A. No, in this bill, they are referring to market valuation for the ENTIRE INFRASTRUCTURE PROJECT rather than for getting an appraisal on the real estate before they pay the land owner. There are rules that apply to acquisition of land by eminent domain which will not be changed by this phrase in this bill.
Q. What is Market Valuation as used in HB 792?
A. What they are referring to is HOW THEY VALUE the land years after it is acquired, how they VALUE the entire infrastructure throughout the life of the contract.
Q. Is it a common practice?
A. Applying Market Valuation to state highway projects is a new concept. Market Valuation is a private sector practice where an owner of an asset values that asset over time as the value of the real estate escalates. As demand for adjacent property rises, rental and usage fees rise to reflect what the private company would have to pay for that house or business or real estate on the day they lease it to a user. For example, a friend of mine rents a house she purchased for $20,000.00 but which appraises on today’s market for $45,000.00. Years ago she charged $150.00 a month for rent but today she charges $750.00 a month for a tenant to rent the house.
This is a common practice in the public sector because she used her personal funds or credit to acquire the property. She is not a public housing authority which uses public funds.
Q. Why is it a such "big deal" in this particular bill?
A. Until a few years ago, only public toll authorities were legally allowed to build toll roads in Texas. With changes in the law, we now allow private companies to partner with the state to build toll roads. We also have public toll authorities which build toll roads in Texas. Public and private toll companies are in competition for bids on lucrative projects. Public toll companies (like NTTA) have an advantage in the bidding process because they operate on different rules than private companies like Cintra. A private company is supposed to invest private investor capital into the project and the private investors, wherever they live in the world, get a return on their investment and they can spend or invest that money anywhere in the world in any kind of project they choose. A public authority uses taxpayers money as an agent of the people and the return or user fees goes back into the public coffers, not to private investors. The return must remain in the region for use on public works projects for the public good.
Q. What about use of right of way?
A. If a private company use right of way owned by the state, frequently they must pay a today’s value for that right of way when they acquire the right to use it because they are a company of private investors making a profit off of the taxpayer’s assets. A public authority should not have to pay today's value for acquisition of the right of way because they are agents of the people, whose money was used to acquire the asset and who will be the customers who use the finished transportation project. Profit (or return on stockholders investment) should not apply to public works (public toll authorities) projects.
A. Are there any exceptions?Q. In some versions of legislation that have been passed by various houses of the Texas Legislature (but which have not to date been signed by the Governor), there was language to allow private or public toll authorities to utilize the right of way at the same cost or no cost and not include the difference between what it actually cost the state to acquire the right of way and what the right of way costs today (market valuation) into the project cost. The idea is to try to keep project cost down so lower costs would allow lower usage fees to the public. But that language was an EXCEPTION to normal practices in the private market place.
Q. When Market Valuation is applied to a project, does it apply to anything other than the real estate cost?
A, Yes. By applying market valuation to a project means each year value would would be base on what it would have cost to build that project that year, instead of what it actually cost to build it when it was built. That means calculating what supplies would have cost at current rates of inflation, what real estate would cost if acquired during the year when they are computing the current year's market valuation, what labor would cost now vs. during the year it was actually built. Applying market valuation means that building supplies, labor, land cost, engineering fees, studies, actually every project cost is calculated based on the current rate of inflation and cost for those design/build/acquire elements for the project based on the cost in each year of the contract. It is suspected that projects will cost much more 50 years from now than they do today. Applying market valuation to a project means that what it would cost to build that project 50 years from now is the cost that will be used to calcuate the rates in the formula used to calculate user fees and potential buy-back costs.
Michael Morris of the NCTCOG RTC says that every project they have escalates in cost about a billion dollars a year. Applying Market Valuation to a public toll project would mean that instead of the project costs remaining what was ACTUALLY SPENT by the government on behalf of the people to build that project, they will be artificially applying a bookkeeping model to the project cost each year which will include what it would cost should they build that project at different years in the contract.
Q. Why did Gov. Perry insist that this language be inserted in SB 792?
A. That is a good question and the only way to answer it is to speculate. Pushing application of Market Valuation to public toll projects levels the playing field between Cintra and the NTTA. It removes the advantage of using a public toll authority to build the project. Rick Perry received substantial campaign contributions from Zachry and Zachry family members and associates during each election cycle he has been in office. Zachry is Cintra's partner and TxDOT favors Zachry-Cintra as contractor for the lucrative TTC project and for SH121. TxDOT was not pleased when legislation was passed which required allowing public toll authorities have the "right of first refusal" in bidding on projects in their region.
I think that requiring application of Market Valuation to public toll authorities bids is a tool that Perry’s administration is trying to use so that Cintra and private investors will have a better chance to win state highway toll contracts. (Private investors charge the taxpayer twice what most public toll authorities charge the public to use the infrastructure).
Q. Why shouldn't they apply Market Valuation to a public project?
A.MARKET VALUATION OF A PROJECT IN THE PUBLIC SECTOR SHOULD NOT APPLY BECAUSE THE PUBLIC IS BOTH THE INVESTOR AND THE USER.
A public toll authority is supposed to build the project at as low a cost as possible and any return on investment is actually taxpayer’s money and must be invested in other public infrastructure in the region for the benefit of the people or returned to the taxpayer through payments to the government.
The funding for a public toll project is taxpayer funding – either gas money, public bonds, etc.
Market valuation is not something they push so that land owners get more when their land is claimed by eminent domain. It is a technique they are trying to misapply to public toll authorities to make them act like private companies like Cintra. A public company's assets belong to the state/taxpayer and they are supposed to operate at the lowest cost to the taxpayer to use those assets. That is why states and public toll authorities buy right of way years in advance at lower costs than what the market would value that real estate in the year they actually break ground or later in the contract, in the year in which the driver is actually driving on that real estate. After all, it is taxpayer money that pays for the real estate and for the bonds that build the infrastructure.
Q. What is the difference between a private and a public toll authority?
A. In a private company, private investor money is investedto acquire the asset. Their stockowners want as great a return as possible on their investment. They apply market valuation to the project each year they own the asset, modeling what the land and construction costs would be if acquired and built each year instead of what it actually cost them to acquire and build the asset when the land was actually bought and the project was actually built. Each year, market valuation is used to set rental rates and prices charged to "customers" or tenants. This allows the investors, private people, to get the greatest return on their initial investment. The investors are different from the customers.
A governmental (public) entity building an infrastructure project is acting as an agent of the people. Their customer or renter is the taxpayer, and the government as an agent of the taxpayer, invests the taxpayers money as capital to build the project. Market Valuation is not applied to public projects because the taxpayer, (who is also the investor who puts up the capital), is not seeking PROFIT like a private shareholder. The public, or taxpayer, is seeking to have access to the infrastructure at the lowest possible cost.
It is of no benefit to the investor (taxpayer) in a public project to apply MARKET VALUATION BOOKKEEPING MODELING TECHNIQUES to the project each year the road is used. The investor is the user and the user wants the cost to remain as low as possible for him (the taxpayer) to use their public infrastructure asset.
Q. What harm does it do if they track what it would cost to build the project each year if it were built in that year?
A. Knowing what it would cost to build it each year is somewhat different from "Applying Market Valuation" to a project as used in SB 792. Applying market valuation to SH 161 could allow use of inflated building costs and land values to influence the rate of the tolls. It could mean that more public money would be required should the state decided to terminate the contract before the 50th year. Applying Market Valuation means using each year's market valuation in the modeling for toll rates rather than "just knowing" the value of the infrastructure.
A. Why is it so important that we call all the North Texas Delegation and object to their voting to allow Market Valuation to remain in this bill?
B. The cost to the taxpayer to use a public assess constructed by a public toll authority using taxpayers resources should not escalate over time as adjacent real estate escalates n price. Appling MARKET VALUATION to public toll authorities projects as used in SB 792 will force public toll authorities to pretend like they are private entities and they will be raising the cost to the user over time as the real estate costs rises in the market place for adjacent land. Even though the state acquired the land years ago with taxpayer money so that the cost to the taxpayer to use the infrastructure would be low, the rules will be turned upside down and the taxpayer will see their user fees rise as adjacent real estate costs rise.
Q. What is so bad about the “apply market valuation” clause in SB 792?
A. Gov. Perry and TxDOT wants MARKET VALUATION APPLIED because this will generate “more revenue out of the ground” for right of way already owned by the state and paid for by taxpayer dollars without giving any additional benefit to the taxpayer.
TxDOT and Perry and probably the NCTCOG RTC favors applying MARKET VALUATION to public toll projects because it will “justify” higher tolls and enable greater amounts of surplus toll revenue to travel from the project into the TxDOT/RTC coffers for use on other projects. (We’ll see how much of it trickles down and actually gets spent on infrastructure and how much evaporates in transit). TxDOT favors it because it insures lots of transportation engineers will continue getting paychecks should federal funds dry up because we miss air quality attainment standards.
Q. Who loses if SB 762 is passed with language requring application of Market Valuation to public toll projects in it?
A. The taxpayer. Taxpayers pay for the right of way then it is acquired with gas tax money. Applying market valuation to the project gives private investment companies like Cintra an advantage in bidding. It costs the taxpayer about twice more to use a project constructed by a private toll authority than it should cost if constructed by a public toll authority. Then by applying market valuation to the project, the project cost escalates on paper each year with inflation removing the advantage of having used tax money years ago to acquire right of way. The people get charged on paper artificially high prices for the right of way that was already paid for with the people's money when it is incorporated into a toll project. Then each year, as inflation increases and what it would have cost to build that project in each successive year of the contract rises, they get to apply this MARKET VALUATION TOOL to the project, and can use it to possibly charge greater cost to the public when citizen-taxpayers drive on the highway.
On every front, the taxpayer gets gouged. Double taxation. Escalated values instead of real cost. Inflated user fees “justified” by market valuation in different years of the project.
What they are attempting to do is to jack up the COST of the project on paper so that they can "justify" higher toll rates and higher project costs so that they'll be able to justify artificially jacking up the project pay off cost should the state decide to reacquire the project at some time in the future. The higher the project cost, the easier it is to justify billions more of surplus toll revenue.
We purchase right of way years in advance so that it will require less of the taxpayers money when it is time for us to build new highway infrastructure and it will cost less to the taxpayers to use that infrastructure. Because public taxpayer money was used, the public should be able to use that infrastructure at as low a cost as is absolutely possible during every year of the contract or life of that infrastructure. The entire CDA to generate surplus toll revenue to give to the RTC concept turns the entire concept on its head. Instead of doing it so the citizens can use it as inexpensively as possible, it is build it and now APPLY MARKET VALUATION TO IT in such a way that the citizen will be fleeced as much as possible every time they put their tires on the highway.
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