Headlines

1. TxDOT $1 billion error caused cash crunch: lawmakers suspicious
2. Capitol Hill P3 critics charge ‘subterfuge,’ ‘balkanization’ of transportation system
3. CA: State panel set to hold crucial vote on project
4. GOP to rally against N.J. toll plan
5. CO: Private prisons demand 5 percent rate increase
6. IN: Costs lead agency to scrap plan to privatize mental hospitals

News Summaries

1. TxDOT $1 billion error caused cash crunch: lawmakers suspicioius
The Texas Department of Transportation made a billion-dollar error, officials of the agency admitted Tuesday under stern questioning from legislators, a mistake they said contributed significantly to TxDOT’s sudden cash crunch, according to the Austin American-Statesman. TxDOT officials say agency planners inadvertently counted $1.1 billion of revenue twice, a mistake that caused them to commit to more road projects than the agency could handle. But lawmakers, always skeptical, were often openly hostile during a lengthy Senate committee hearing that amounted to a thorough wood-shedding of TxDOT. They let department officials know that they remain suspicious about the legitimacy of the fiscal crisis. Texas Transportation Commission members, said state Sen. Kirk Watson, D-Austin, "have an agenda. And that’s to privatize the second-largest (highway) system in the world. And you are hell-bent-for-leather to do that."

2. Capitol Hill P3 critics charge ‘subterfuge,’ ‘balkanization’ of transportation system
Unbridled state and local government use of private financing to improve the nation’s highway network will result in a national transportation system of varying quality from region to region and will not solve mobility problems, a House Transportation and Infrastructure Committee aide warned yesterday, reports The Bond Buyer (subscription). Unchecked use of public-private partnerships "fails to heed the lessons of the past and will lead to future balkanization of our transportation system," Art Chan, the aide, told those attending a P3 summit here sponsored by City & Financial, a British-based conference and publishing company. Chan’s comments were presented on behalf of committee chairman Rep. James L. Oberstar, D-Minn., who was originally scheduled to deliver the speech, but withdrew after coming down with a case of laryngitis. The committee will play a key role in a reauthorizing transportation policy and funding law that expires next year on Sept. 30, the end of fiscal 2009. "Advocating privatization, tolling and rationing as the only solutions to our nation’s transportation crisis … fails to recognize the magnitude of the crisis we are facing and does not acknowledge the difficult choices required to remedy the situation," Chan said. "The effort of the [Bush] administration and its supporters to sell off or toll existing infrastructure undermine the policies that have led to the world’s premier intermodal surface transportation system." Chan argued that the federal government must make sure that the transportation network functions as a unified system and allows movement efficiently around the nation.

3. CA: State panel set to hold crucial vote on project
It’s decision time for one of the most heated environmental battles in Southern California history. The San Diego Union-Tribune reports that on Tuesday, the state Coastal Commission will vote on a decade-long proposal to build an $875 million toll road between between Orange and San Diego counties. The freeway would cross the Donna O’Neill habitat reserve and San Onofre State Beach, which were both set aside to offset the environmental damage of previous development. These sites are home to numerous endangered species – including birds and amphibians – and the San Onofre park contains a beloved campground and world-famous surfing spots. Business leaders, chamber of commerce officials and some motorists fed up with gridlock can hardly wait for the concrete to start pouring.

4. GOP to rally against N.J. toll plan
New Jersey Republicans on Monday vowed to try to lobby businesses against Democratic Gov. Jon S. Corzine’s plan to increase highway tolls to pay state debt and fund transportation, according to the AP. Republicans Anne Estabrook, a former Chamber chairwoman, and former Bogota mayor Steve Lonegan plan to launch a joint effort to build a new coalition of businesses opposed to the plan. "It will hurt working families and drive businesses out of state," said Estabrook, who is running for the state’s Republican U.S. Senate nomination this year. Corzine wants to pay off at least half of the state’s $32 billion in debt and fund transportation projects.

5. CO: Private prisons demand 5 percent rate increase
A private prison company is threatening to move all Colorado inmates out of one of its facilities if it doesn’t get an increase in what the state pays to house them, says The Pueblo Chieftain. Corrections Corporation of America, which operates four of the state’s five private prisons, including three in Southern Colorado, is demanding that the Colorado Legislature give it a 5 percent hike in the per diem it receives to house about 4,000 state inmates, Rep. Bernie Buescher, D-Grand Junction, said Tuesday. Rep. Buffie McFadyen, D-Pueblo West and a longtime critic of private prisons, said the state should call CCA’s bluff and give them no increase.

6. IN: Costs lead agency to scrap plan to privatize mental hospitals
The Indiana Family and Social Services Administration has dropped a plan to privatize three state hospitals, throwing new uncertainty into its future care for chronically mentally ill patients, reports The Indianapolis Star. Less than five months after FSSA Secretary Mitch Roob told a state panel that a federal audit showed Indiana needed a new way of delivering care to chronically mentally ill patients, he has ended negotiations with a group vying to take over Richmond State Hospital. The change in strategy was driven by a variety of reasons including cost concerns. Roob, in a telephone interview, said he decided to end the Richmond talks because Gov. Mitch Daniels asked state agencies in December to cut spending after a lower tax revenue forecast. Turning over the 300-patient Richmond State Hospital to a local group would cost the state $3 million to $5 million. "We were not comfortable spending that money when times might get tough," Roob said

__________
Essential Information is a non-profit, tax exempt organization. We are involved in a variety of projects to encourage citizens to become active and engaged in their communities. We provide provocative information to the public on important topics neglected by the mass media and policy makers. To contact the Privatization Bulletin, email [email protected].