Newspapers throughout Texas ran a recent opinion editorial written by Tim Keith, CEO of Texas Central Partners (TCP), who is proposing to construct a high-speed rail system between Houston and Dallas that impacts all Texans. I’d like to respond to a few statements made by Mr. Keith with more information for Texans to consider. As Grimes County Judge, Chairman of the Brazos Valley Council of Governments, Chairman of Texans Against High-Speed Rail and, most importantly, as a native Texan, I believe TCP and the Japanese investors miss the mark on Texas values. I have learned if it sounds too good to be true, you should dig a little deeper.

Tim Keith

Tim Keith

Chief Executive Officer

Let me emphasize one point – the project will never need, ask for or receive any type of taxpayer funded bailout.

TCP often claims they will not seek taxpayer bailouts for their project, but also states they will likely seek some form of government backed loans or bonds. It is important to clarify that in all types of government backed loan or bond programs the taxpayers (including, yes, all Texas taxpayers) would absolutely be on the hook when the project fails financially. I don’t know what they call that in California where Mr. Keith received his college education, or in New York where he spent much of his career, but I can tell you what we call it here in Texas – taxpayer subsidy and taxpayer bailout. Government subsidies and bailouts are a primary reason why businesses and individuals are fleeing from states like New York and California to come to Texas. Let’s make sure we do not follow those states off the cliff by implementing these ideas in Texas.

Judge Ben Leman

Judge Ben Leman

Grimes County Judge, Chairman of Texans Against High-Speed Rail

Tim Keith

Tim Keith

Chief Executive Officer

Here are three reasons why a taxpayer funded bailout will not happen:

It’s not legal.

First, a default on taxpayer backed loans or bonds, which are legal, will have the same effect as a bailout when this project fails. This clearly proves this statement false. Additionally, the federal government has already spent billions of taxpayer dollars (and again, yes, this includes Texas taxpayers) for high-speed rail projects like the one in California. There are countless examples where state and federal governments have subsidized or bailed out private companies… think GM and auto industry, big banks, Solyndra, Amtrak, ethanol industry, etc. Without a doubt, Texas and/or federal lawmakers will be unwillingly forced into bailing out this project later if we let it get started.

Judge Ben Leman

Judge Ben Leman

Grimes County Judge, Chairman of Texans Against High-Speed Rail

Tim Keith

Tim Keith

Chief Executive Officer

It’s not how the market works. There is no precedent or appetite for the state to rescue a private company.

I am sure TCP has heard of Amtrak and knows Amtrak is a private, for-profit rail company heavily subsidized by the federal government (which, again, includes all Texas taxpayers). As I stated earlier, our federal government is also spending billions of dollars subsidizing (and, therefore, bailing out) high speed-rail projects like the one in California and has subsidized many other companies across the country. Apparently, neither TCP nor their Japanese investors understand that everyone here in Texas realizes it is all still taxpayer money whether the subsidy comes from the local, state or federal level. It is also a fact that governments subsidize high-speed rail systems all over the world. There has never been a successful privately-funded, constructed and operated high-speed rail system in the world. This includes the HSR in Japan that TCP is always heralding as a success story, which was actually constructed with public funds and then subsequently privatized. Clearly, the market accepts subsidies to save the existence of HSR systems and his quote is not accurate.

Judge Ben Leman

Judge Ben Leman

Grimes County Judge, Chairman of Texans Against High-Speed Rail

Tim Keith

Tim Keith

Chief Executive Officer

The system will be backed by investors’ capital and operate at a profit, based on ridership, revenue and service that meets consumer demand.

As I described earlier with TCP utilizing government backed loans or bonds, the majority of this project will ultimately be backed by the full faith and credit of the United States Government. This means you and me, thus this statement is false. It should also be noted that TCP refuses to release any details of their Economic Impact and Ridership Studies. Repeatedly, TCP chants that their studies show this rail will be profitable. We all know that to cite a study as factual but not release the study for review, results in the taxpayers not giving any credibility to the claims. At a minimum, if TCP desires to use eminent domain, they should be required to provide the data and assumptions utilized for the studies to the State of Texas, elected officials and the citizens.

Judge Ben Leman

Judge Ben Leman

Grimes County Judge, Chairman of Texans Against High-Speed Rail

Tim Keith

Tim Keith

Chief Executive Officer

I’ll say it again, the privately developed investor-funded, high speed rail system will not need or receive a taxpayer funded bailout.”
TCP clearly believes in the old adage, “If you repeat an inaccuracy often enough it becomes the truth.” Texans, both rural and urban, have a saying we believe in that applies in this circumstance: “We’d better put our boots on because the manure is getting pretty deep.

In closing, I ask the reader to determine what is accurate and on what principles you will base your decision to support or oppose this project. In Texas, we do not like taxpayer subsidies or bailouts for private entities or foreign governments. In Texas, we also do not like any entity, much less those pushing on behalf of foreign investors, utilizing the power of eminent domain to take our private property for their private business purpose. These are two long-established core values that have made Texas one of the most successful states in the country and why so many people move here. We must all work together to ensure these principles and our great state of Texas are protected for future generations to come. If you agree with me, then I invite you to join the fight and learn more about this ill-conceived project at www.TexansAgainstHSR.com and follow us on Facebook to stay up to date on what you can do to help stop this affront to Texas values.

Judge Ben Leman

Judge Ben Leman

Grimes County Judge, Chairman of Texans Against High-Speed Rail

 

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