Barney Bishop column: Dept. of Transportation Secretary Ananth Prassad on a legislative crusade

March 27, 2012  |  No Comments  |  by Barney Bishop  |  Columns

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Florida Department of Transportation Secretary Ananth Prassad has been on a legislative crusade for the past two years as he has repeatedly attempted to take over the Tampa-Hillsborough Expressway Authority (THEA), the Mid-Bay Bridge Authority, and the Orlando-Orange County Expressway Authority (OOCEA).  By hook or crook he is determined to “consolidate” these entities either within the FDOT or the Florida Turnpike Enterprise.

However, these three local toll road authorities have successfully beat back these attacks and will be forced to continue to do so until he gives up his stubborn quest.  So, what is this all about really?  Well, it’s about a number of things but most importantly it is about the desire to bring these local agencies with well-earned and very strong revenue potentials into the departments fold and use that money to fund projects around the state.  Except that is not what these authorities were created to do, rather they were created to allow local board members to craft smart solutions to their local road challenges – to meet their local needs.  FDOT by definition is about creating solutions on a state-wide basis and connecting urban areas together.  In fact, no other state in the country is pushing all decision-making to the state level except for this Secretary.  Meanwhile other states are actually following Florida’s model and creating moreregional toll authorities to insure that there is a local focus on urban traffic congestion, and this is especially true in Texas, a state that Governor Rick Scott sometimes looks to for idea’s.

Now, THEA saw this legislative train moving out of the station last year and so they developed a comprehensive strategy to accelerate their debt re-payments to the state, which lent money in the first place so that THEA (and other toll authorities) could begin construction.  Since toll authorities need toll revenue to pay back bond holders, and since new roads have little toll revenue, someone must loan them the money up–front and the state realizing this many years ago developed the state infrastructure bank and the lease-purchase concepts.  As toll revenues start coming in, then the local toll authority can begin to repay the bank the money plus interest.

But what happens when a local toll authority wants to repay their debt, yet the state refuses to accept the cash?  Who would look a gift horse in the mouth and refuse the money?  Secretary Prassad for one.  What?  Yep, you read it right.  FDOT refused last summer to accept a finance plan from THEA that would have THEA directly fund $100 million of their own work versus FDOT insisting on funding the THEA work.  THEA’s plan would have freed up $100 million of FDOT funds and the plan would have THEA making an early re-payment of $65 million to FDOT for prior loans.  In sum, THEA’s plan would have made FDOT the beneficiary of $165 million and FDOT’s excuse for not taking the money is so logically convoluted that it is indeed difficult, if not impossible, to rationalize.  By refusing to accept the plan however – and simultaneously refusing to allow THEA to pay back the money early – FDOT is able to continue to control the future of the authority.  When FDOT testifies before the legislature, if you listen carefully you will hear him say that THEA is not paying back the debt quick enough.  Well, do you want the money back or not?  Or is it just a “control” issue?

What THEA had devised was a brilliant stroke to refinance their bonds, pay off some of their debt to the state bank, and with the state dollars freed by the refi; they projected about $165 million in new road construction money for Florida that would have the ability to put about 5,000 people to work.  And this would have occurred without any increase in tolls!  And the new debt would not be state debt; it would be THEA’s debt.  Sounds unbelievable huh?  Well, sometimes friends the truth is stranger than fiction.

Last summer the THEA chair wrote a letter outlining the circumstances of the early debt rejection and it has still fallen on deaf ears.  This year’s transportation budget was better than last year’s, but it could have been even better had the dollars that THEA wanted to re-pay, instead been accepted and then used to help fund other transportation projects.

FDOT and the Secretary continue to argue, as recently as last week, that by consolidating the local toll authorities the state would accrue $24 million in savings, even though the Reason Foundation’s ( January 31, 2011 study, Should Florida Toll Agencies Be Consolidated analyzed the numbers carefully and found them to be off base by about 85%!  That is, at best, the state might realize about $3.5 million in savings and more likely only about $2 million.  Yet, the Secretary continues to assert that the $24 million is correct without offering even scant evidence that he is correct.  And moreover he hasn’t pointed out any fallacies in the study’s accounting that would make one believe that he is right.  So, why does he continue to make the argument?  Because everyone in the transportation business is afraid to tell the Emperor that he has no clothes on.

At a meeting of the Florida Transportation Commission and TEAMFL next week in Tampa, Robert Poole, one of the co-authors of the study, and probably the preeminent toll road expert in the country, is to be given an opportunity to present his study to the local toll authorities, engineers and road builders who do this for a living.  Not only does the study reveal that the figures are mostly smoke and mirrors, the report goes on to say that local toll authorities are where real innovation is taking place. For example, OOCEA was able to get rid of toll booths entirely and use transponders to access driver’s accounts.  Even the latest innovation:  reversible express lanes with all-electronic tolling was developed by the Tampa toll authorities, not the state.

The FDOT Secretary is a smart man whose job is serving the Governor and the people of Florida.  But when he refuses to acknowledge the facts, and continues to assert numbers that cannot be justified by independent analysis, then something is clearly wrong with this picture.  When he was quoted last week in the Tampa Bay Times calling local toll authorities a “shadow bureaucracy,” it became evident to me that it was time that we teach the Secretary a lesson in civics.  Mr. Secretary, we call that local government and it is generally believed by most Americans that government closest to the people is the most accountable.  Not in Tallahassee, but at the local level.

Barney Bishop III, who just founded his third company – Barney Bishop Consulting, LLC, is an outspoken, lifelong Democrat with a strong fiscally conservative streak. He believes that government is not the answer to all of our problems, that civil discourse is obligatory, that compromising on details will not undercut one’s core beliefs, and that a resilient, robust private sector is the elixir needed for a true democracy to grow and survive. You can contact him at