Thanks to the vision and creativity of our elected and business leaders, Texas has blazed a bright economic trail for the United States and the world. Our economic dynamism and resiliency springs not from good luck but from a committed approach to governing that fosters an entrepreneurial spirit.
The bedrock of this successful partnership is a predictable political climate that promotes business and includes cautious budgeting, limits on spending, fair and relatively low taxes and common-sense regulations. All have allowed entrepreneurs to respond quickly to the free-market by investing in products and services consumers want.
That’s what is happening now with the privately developed high-speed rail project, offering safe, affordable and productive passenger service between North Texas and Houston. The quick, 90-minute trip—including a Brazos Valley stop between College Station and Huntsville—is the latest and greatest example of what the “Texas Model” can achieve.
This is being led by the private sector – it is not a government project. There is no taxpayer funding, contrary to misinformation spread by some individuals. The project does not need, does not want and will not ask for government grants for construction or public money to subsidize operations. The system will be backed by investors’ capital and operate at a profit, based on ridership, revenue and service that meets consumer demand for a superior travel experience.
Let me emphasize one point – the project will never need, ask for or receive any type of taxpayer-funded bailout.
In the last year, we have announced that more than $245 million has been raised or committed to the project. Investors and partners, including many notable Texans, have gotten involved after a rigorous, and independent examination of the business plan.
Beyond the robust and continuing financial interest in our project, here are three reasons why a taxpayer-funded bailout will not happen:
- It’s not legal.
For such a bailout to occur, state lawmakers would have to vote on making significant revisions to a number of different areas of state law to rescue a private company. That’s highly unlikely in a state that believes it’s up to private businesses and the capital markets to determine their destiny. I don’t know of a single elected official who would lead those efforts.
- It’s not good for Texas.
Our state has many critical needs—from schools to health care to property tax relief—but Texas has a limited budget, especially at a time when the price of oil and natural gas are depressed. Any notion to financially support a private company would unleash massive opposition from supporters of these vital programs. Texas is blessed with leaders who show fiscal discipline and would not fund this hypothetical bailout.
- It’s not how the market works.
There is no precedent or appetite for the state to rescue a private company. And our elected officials—quite rightly—have stood firm against taxpayer bailouts, even during significant private-sector business failures in the past.
The recent bankruptcy of the state’s largest electrical transmission operator is a perfect example of the state not intruding in the private market. Multiple private-sector groups immediately expressed interest in purchasing the assets without taking taxpayer money or impacting the operation of critical infrastructure. With millions of consumers relying on the operator for electricity, a state bailout was still not an option.
I’ll say it again: the privately developed, investor-funded, high-speed rail system will not need or receive a taxpayer-funded bailout.
With this innovative project, Texas investors are putting their money on the line because Texans want a safe, affordable and productive transportation choice. More than a significant transportation solution, a recent economic analysis shows this project will pump $36 billion into the Texas economy over the next 25 years, generate tens of thousands of jobs in Texas during construction and create a permanent new high-tech industry in Texas.
It is exciting to visualize the impact this big idea will have in Texas and for the nation. With your support, our state will lead once again. Please text RAIL to 52886 to stay informed.