BIKE: Lt. Gov. Dewhurst spanks TxDOT

[Roger Baker]

[This is important because *TxDOT/Perry/the road lobby* have up to now 
been politically unchallenged, and essentially out of control. As such 
they are part of some of the most environmentally and financially 
destructive forces on the loose in Texas. Dewhurst is no tree hugger so 
I think this indicates that even the Texas Legislature has some 
standards of proper conduct and decorum.

Does this affect bikes in Texas? Hell yes! Only when the road lobby 
finally understands the meaning of humility will alternative voices be 
heard and have a chance to get a fair hearing. Full text, formatting 
removed. -- Roger]




March 29, 2005

  Mr. Ric Williamson
Chairman
Texas Department of Transportation
125 East 11th Street
Austin, TX  78701-2483

Dear Ric:

I received a copy of your Executive Director Michael Behren's letter 
dated March 18, which he sent to all district engineers and many 
interested transportation groups, announcing a postponement of work due 
to a short delay in the consideration of $1 billion of Texas Mobility 
Fund bonds by the Texas Bond Review Board, as well as Behrens' letter 
to Representative Joe Pickett dated March 29. The letters are factually 
incorrect, and obviously intended to influence the Texas Bond Review 
Board to act before several concerns are resolved by creating an 
impression of urgency.  In fact, when your own agency testified to the 
Bond Review Board on March 17th that they were interested in drawing 
down $1 billion in Texas Mobility Funds to pay for $710 million in 
future total project costs, they said that in essence, there was no 
hurry, since TxDOT has enough cash to continue until "late June or 
early July." The Bond Review Board will approve bonds for TxDOT on a 
timely basis, an action I support, once several legitimate concerns are 
resolved.  Your postponement of almost $1 billion in highway 
construction projects is not supported by the clear intent of the Texas 
Review Board.

I agree with Comptroller Carole Keeton Strayhorn's concern regarding 
the "interest-only" structure of your bond proposal, which will cost 
taxpayers an additional $189 million over the life of the issuance.  
This concern obviously needs to be resolved before we approve new 
bonding authority.
	
Another concern, is that according to the Legislative Budget Board, 
TxDOT has made no formal indication since the submittal of the 
Legislative Appropriations Request in October 2004, that there would be 
any Texas Mobility Fund issuances in FY 2005.  TxDOT estimated 
expenditures of $375 million from the Texas Mobility Fund in its 
Legislative Appropriations Request in 2005, but no bond issuances or 
debt service.  We have heard in public testimony that possible bond 
issuances from Fund 6 monies is probable, but nonetheless, the 
Legislative Budget Board has not been provided with any specific 
information regarding any bond issuance efforts related to the Texas 
Mobility Fund.  A request for that additional information was made by 
the Legislative Budget Board, and by legislative committee members 
months ago, but as is characteristic of TxDOT, no information has been 
forthcoming.  You are instructed to provide the Legislative Budget 
Board with a schedule of your proposed bond issuances and debt service 
schedules for FY 2005, FY 2006, and FY 2007 at the strategy level 
included in the 79th General Appropriations Act for Fiscal Years 
2006-2007, as introduced no later than April 8th.

I am further at a loss as to why you are not following the 
Legislature's mandates, and the wishes of the voters of Texas.  The 
78th Legislature passed, and the voters ratified, Proposition 14, a 
constitutional amendment which provides TxDOT with access to $3 billion 
today in bonding authority and the ability to complete projects at a 
more rapid pace while not impacting the General Revenue Fund.  There 
has still been no indication in a formal amendment to your Legislative 
Appropriations Request of any intention on TxDOT's part to use this new 
voter approved funding source.   This $3 billion in bonding authority 
is available today and TxDOT can as easily move on it as it can on the 
Texas Mobility Fund.  Governor Rick Perry has been recommending for 
years the building today of needed highways with anticipated federal 
highway funds.  He has argued that it saves Texans money over time and 
reduces traffic congestion, and I agree with Governor Perry that we 
should begin building today.

In addition to the Comptroller's concern, I am concerned about the 
source of bond debt service funding for the Texas Mobility Fund, and I 
believe the situation must be rectified before the Bond Review Board 
considers $1 billion in Proposition 14 or Texas Mobility Fund bonds.  
During the 77th Legislative Session the Legislature passed SB 4, which 
created the Texas Mobility Fund authorizing over $4 billion in bonds 
with which to construct new roads.  HB 3588, passed during the 78th 
Legislative Session, created the new Driver Responsibility Program, and 
through a $30 traffic fine envisioned raising enough revenue to service 
the bond debt which would be issued through the Texas Mobility Fund.  
However, in order to secure favorable bond ratings the proposed Texas 
Mobility Fund needed to be funded by a long-term revenue source with a 
good track record.   The proposal that was agreed upon gave the 
Department of Public Safety two years to get the new Driver 
Responsibility Program up and running and at the beginning of FY 2006, 
the Texas Mobility Fund would take over the stable revenue stream 
generated by Motor Vehicle Inspections, Drivers License Fees, and 
Driver Record Information Fees.  In exchange for these fee revenues, 
the General Revenue Fund would get the new Driver Responsibility 
Program and traffic fine revenues at what was thought at the time to be 
an even swap.  As noted in the Comptroller's Biennial Revenue Estimate, 
there is a large gap between the values of the revenue sources to be 
swapped,  i.e., an amount exceeding $300 million for the FY 2006-2007 
biennium.  This direct  impact to General Revenue and the school 
finance reform plan must be rectified before we can move forward with 
the issuance of the Texas Mobility Fund bonds.  We believe an agreement 
was made to have an equal swap of these revenue sources and the Senate 
wants to honor our agreement.

As a possible solution, please send me a proposal which issues 
Proposition 14 bonds or Texas Mobility Fund bonds for the FY 2006-2007 
biennium, and if you choose the latter, backed by the Motor Vehicle 
Inspection Fee revenues (estimated to be $83 million in FY 2006 and $87 
million in FY 2007), while maintaining the Driver License Fees and 
Driver Record Information fees in General revenue for two more years to 
eliminate the $300 million negative impact to the  current revenue 
estimate.  As the debt service requirements are in the $52-$60 million 
range, this would still allow for the required 110% coverage ratio for 
the initial $1 billion bond package to be issued along with an 
additional $1 billion during the FY 2006-2007 biennium, while returning 
over $300 million to General Revenue during FY 2006-2007 to be used for 
the school reform package.  The difference in short-term revenues for 
new highway construction can be made up by the issuance of a portion of 
the $3 billion in Proposition 14 bonds or by increasing the Texas 
Mobility Fund proposal by an equal amount.

As I discussed with Governor Perry on the Thursday morning before the 
Bond Review Board meeting, the Board can be called into an emergency 
session to address the issuance of the $1 billion in bond authority 
once these issues have been satisfactorily addressed.  I think it would 
be positive if both you and Behrens would come to visit me immediately 
to resolve these concerns, so that we can get a bond package promptly 
approved.

Sincerely,

David Dewhurst
Lieutenant Governor


cc: 		Governor Rick Perry
		Comptroller Carole Keeton Strayhorn
		Speaker Tom Craddick
		Senator Todd Staples
		Senator Steve Ogden
		Senator Florence Shapiro
		Representative Joe Pickett


Chairman Ric Williamson
March 29, 2005
Page  PAGE 3
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