Consistent. Principled. Action.

The following is my written testimony on March 18, 2009.

Chairman Carona, members of the committee, thank you for holding this hearing on SB 855.

I am Keith Self, the County Judge for Collin County. Almost 800,000 strong, our county has both DART and large non-DART cities - an important point in my testimony.
I will address two major themes in my testimony - tax increases and a view of transit funding in the DART region.

Tax Increases. Collin County Commissioners Court members have stated our support for transit in Collin County. However, this is not the time to levy a tax increase on our citizens. Over the past 20 years, state spending has grown at nearly twice the combined rate of population growth and inflation. This cannot continue. It has nothing to do with whether or not I want it to continue - it is a fact that this rate of government growth is unsustainable. This is the most dangerous aspect of this bill - tax increases in an era of massive government spending amidst a declining economy.

Raising taxes during a recession is absolutely the worst thing to do. Our citizens are tightening their belts and reducing their spending, and government should do the same. We need to leave as many hard-earned dollars in the private sector as possible in order to get through this recession as quickly as possible. We cannot ignore the massive spending in Washington, spending that will impact our taxpayers either through direct tax increases or through inflation as the printing presses run.

Heretofore, Texas remained competitive because we are business friendly; proof positive that capital (both financial and human) goes and stays where it is welcome. In fact, Collin County's best recruiting tools are the high tax and unfriendly business/family policies of other states and counties. Our low taxes, high population growth, jobs, safe streets, good schools, and almost double the national average of bachelor's degrees are among the results. This new tax increase would make us less competitive to attract and retain financial and human capital. Our entrepreneurial citizens will find ways to react the best they can, but eventually the growing weight of government will crush any entrepreneurial spirit.

You will hear the same arguments for this tax that we hear justifying government action in every crisis, real, perceived or manufactured - arguments all based on the children's nursery rhyme, Chicken Little. "The sky is falling. It will only get worse if we don't do something. Only the government is big enough to fix this. We must do something." All these arguments we heard for the multiple federal stimulus packages in the trillions of dollars. We hear the doomsayers justifying massively huge spending just because we no longer trust free markets and free people. I suggest that in "doing something", we not try to repeal the laws of physics, the laws of economics, or federal law. I will address these later.

Winston Churchill once famously said, "A nation that thinks it can tax its way into prosperity is like a man standing in a pail, trying to lift himself by the handle." His wisdom is even truer during a recession.

Turning to the mechanisms detailed in SB 855, I believe that the bill is unworkable at several levels. I will address only transit, which was the genesis of the bill. If these taxes are not dedicated for transit funding, then they become just another general, fungible tax increase supposedly for transportation, much like the lottery was supposed to fund education.

SB 855 prohibits new transit authorities, meaning that DART, the T, or the Denton County Transit Authority will have to provide new capacity in our region. Realistically, in Collin County that means DART.

DART member cities have been contributing to the system for several decades. Plano (one of our three DART cities) has over 800 Million dollars invested in DART, today contributing 60 Million dollars every year - these new tax increases would be on top of that 60 Million per year. I'm not sure what this bill offers as the incentive for Plano voters because it amounts to double taxation on Plano citizens.

DART has a plan through the year 2030 for expansion of the system into their member cities that do not yet have a DART station, like Addison or Rowlett, but I do not believe that DART has conducted planning to incorporate cities that are not DART members.

SB 855 mandates timings for project construction in non-DART cities, planning that DART has not yet conducted. Therefore, I'm not sure how passing a law that mandates new transit construction in Collin County by DART on a fixed schedule could be practically accomplished. DART is working hard to provide new capacity for their member cities who do not yet have service, but the new local tax increases are restricted to projects in the county in which they are raised and limited to a strict timetable actually codified in legislation for the ballot language.

But let's assume that this bill passes, that the required resolutions are obtained (resolutions that realistically include double taxation of Plano) and that the citizens of Collin County approve this tax increase. DART would have two issues that I see:

1) They would want some reimbursement for the system impacts of capital construction to accommodate the added ridership from non-DART cities. However, the funds raised by these new taxes would remain in the county in which they were raised. Collin County taxes would not be available to address the impacts of Collin County riders on the Dallas County sections of DART. In fact, if this issue is not addressed, more Collin County riders would actually limit available seats for Dallas County riders. In effect, you would add more flow without increasing the size of the pipe or increasing the speed of the flow. You cannot repeal the laws of physics.

2) They would want some form of higher fares for our non-DART citizens in order to compensate for the equity that the member cities built up over the past decades. DART ticket fares are heavily subsidized now. A two-tiered, non-subsidized ticket fare structure would be necessary. Higher taxes for DART cities; higher taxes AND higher fares for non-DART cities. This scenario reminds me that Art Laffer of "Laffer curve" fame loves to say, "You cannot repeal the laws of economics." People behave in certain ways under certain incentives, regardless of government efforts to change human nature.

And at the end of the day, transit estimates are that, compared to the number of cars on US 75 daily, only an infinitesimal number of people will ride transit between Plano and McKinney. (Update comment: Estimated 5440 daily transit riders versus approximately 200,000 cars.)

In addition, the Metropolitan Planning Organization (MPO) has the final federal authority on the regional transportation system. SB 855 purports to give local control over projects under this law, but the MPO controls projects, priorities, and pace under federal law. We also cannot repeal the federal laws that govern the MPO's role.

So if the SB 855 tax increases cannot repeal the laws of physics, or the laws of economics or federal law, we may need other solutions to our transportation needs. SB 855 can certainly collect taxes, but whether or not it can lead to a coherent transit system is a question.

The bottom line is that you may end up with an unenforceable law requiring impossible results on an untenable timeline.

My central message is the same as my testimony in front of this committee two years ago. I recommend that the legislature reprioritize the taxes that our citizens already send to Austin in order to fund transportation. Make transportation a higher priority because since the beginning of commerce a good transportation network has been essential to growth and strength of economy. Fund transportation adequately from the biennial budget as the important priority that it is.

Stop the diversion of our motor fuels tax - stop all diversions. The diversions are another example of taxes being marketed to the public one way and used a different way - again, the example of the lottery supposedly funding education.

Allow private funding for major infrastructure projects. When did we start trusting government more than private enterprise? Let companies invest, accept the risk, and reap the reward for that risk. The way out of the Chicken Little syndrome is to once again trust free markets and free enterprise. Companies will invest when it becomes economically feasible. Our citizens will have a choice of where they invest their transportation dollars. Freedom and mobility will both be increased.

I close with an encounter between Mikhail Gorbachev and Margaret Thatcher, known as The Iron Lady, Prime Minister of Great Britain who rescued Great Britain from socialism in the 1980's. Gorbachev asked Thatcher how she ensured that the people of her nation got enough food. "She didn't", she tartly told him. (There Is No Alternative by Claire Berlinski) Thatcher understood that free markets and free people ensure that goods and services are delivered. The reason the Soviet Union could not resolve the basic necessities of life is because they had a command economy in which the government decided everything, price, quantity, allocation, everything - and they failed. In our nation, the hundreds of millions of individual decisions every day should decide our economy, not some bureaucrat in Arlington or Austin or Washington.

In the command economy of SB 855, all Collin County citizens would pay these tax increases and non-DART cities would also pay higher non-subsidized ticket prices. And that still leaves unresolved some unintended consequences such as paying for added capacity to accommodate additional Collin riders along the Dallas sections of DART and the issue of Plano double taxation. And THAT still leaves the issue of MPO responsibilities to meld together our regional transportation system, regardless of county votes.

Command economies don't work; they only bring more complexity, uncertainty and misery. We should heed the lessons of history - as recently as the 1980s in Great Britain, or we will start experiencing our own lessons of an overbearing command economy here in America.

I encourage you to keep Texas competitive during this world-wide recession. Do not raise taxes.

Citizens and supporters,

1) Our unemployment numbers in January went up significantly, in fact one whole percentage point from 5.5% to 6.5%. While we continue to look dramatically better than the state average of 6.8% actual unemployment and the national 8.1%, we are starting to feel the pinch of the national economic drop. Just as you are tightening your belts in order to ride out the recession, your governments ought to tighten our belts as well. Tightening the government belt is not an option during this recession, it is absolutely imperative. If governments even maintain a status quo in spending, the percentage of government spending will increase compared to private spending. We will, of course, continue to watch county government spending closely.

2) This is not the time to raise taxes on our citizens. The entire Commissioners Court has so far stood firm against bills HB 9 and SB 855 in the legislature that would add a whole new set of taxes to fund every sort of transportation and transit project, as well as give authorities over those tax funds to an entity outside the county. We are getting some help in this effort from several organizations in Austin. See http://empowertexans.com/node/848#action and http://www.texaspolicy.com/pdf/2009-03-06-sb855letter.pdf

3) Although the legislature has filed a bill to raise your transportation taxes, oddly enough, it has at the same time filed bills HB 2334 and SB 882 to eliminate the authorities that our county toll road authority has over managing the pace and oversight of the Outer Loop through Collin County. On one hand the legislature is asking you to pay more, but on the other hand, the legislature is gutting our authority over transportation projects. If you care to see the next Commissioners Court discussions on these two sets of bills, watch the court session in real time on Thursday, March 12 at 9:30 AM at http://collin.granicus.com/ViewPublisher.php?view_id=2

4) Www.KeithSelf.com is changing! I want to share with you our exciting web site redesign project. There are a few more changes to be made, but I think we have already added some features that will help spread the word about fiscal responsibility in Collin County.

There is a new Facebook link on the right side of the home page. If you use Facebook, click on that link, become a supporter, and you can share our mutual conservative philosophy with your Facebook friends. Facebook is an excellent networking tool, and I encourage you to use it to share your political interests with your friends.

There is also a new RSS link on the right side. Click on that link to get an automatic feed when I post a blog. This is an excellent feature for new supporters who want to receive blog postings in an effortless way. If you already get the blog email, this will be a duplicate, so choose the automatic feed that you want.

There will be a new Donate tab on March 9th. Under that tab you will find a new Paypal secure on-line method of contributing to our re-election campaign. Many of you are familiar with Paypal and already have accounts. No amount of contribution is too small, and I appreciate every contribution that you send. It is no secret that grassroots voters - you - were instrumental in my election in 2006, and it will be no different in 2010. You are the voters who want fiscal responsibility in your county government. You may not be as vocally shrill as those who demand that government take care of every desire, but you vote, and you work, and you contribute your time, talent, and treasure. And I appreciate every contribution for good government.
Another change over the next week will be an updated photo gallery. Check back later to see the changes.

Of course, you will continue to see the words, "Consistent. Principled. Action." You will also continue to see my writings about county government on the home page.

5) I am preparing for a tough fight next spring during the primary election cycle. I firmly expect a counterattack from those who ascribe to the tax-and-spend view of government. I will need you during the re-election campaign, and I appreciate your support.

Sincerely,
Keith