Port bonds

There really are a lot of bonds on the ballot this November, aren't there?

The Port of Houston Authority will ask voters next month to approve $250 million in tax-supported bonds to build new docks and enhance security.

But, first, port officials may have to explain why the authority, which frequently touts its success in bringing container traffic and jobs through the Houston Ship Channel, should not pay for the improvements itself.

The proposed bond package could face another hurdle: The Nov. 6 ballot includes more than $11 billion in state and local bonds, a scenario that has some voters nervous about future tax bills.

"The port is such a success," Harris County Tax Assessor-Collector Paul Bettencourt said last week. "I don't think they need a property tax subsidy. It would be great if they could get off this dole."

Authority officials say the bonds are needed to ensure Houston can continue to compete as a major national port.

Chairman Jim Edmonds said two more docks are needed at the agency's new Bayport facility because container traffic is growing rapidly.

"We have to have good facilities and good tariffs," he said. "We compete with Savannah (Ga.), Charleston (S.C.) and Long Beach (Calif.)."

The port authority initially asked Commissioners Court to put a $550 million bond package before voters. The court balked at the amount, worried it could contribute to an increase in the property tax rate and, perhaps, endanger the county's plan to issue $630 million in bonds for its own projects.

The port authority decided to seek the $550 million in two elections. It will ask for $250 million in November and seek $300 million more in three years, Edmonds said.

The $250 million would go toward two more docks, 160 acres of container yards and security enhancements, Edmonds said. Four more docks would be added if voters approve a $300 million package in 2010, he said.

The $250 million bond package will not require a property tax rate increase, said Dick Raycraft, head of the county budget office and management services.

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During the summer, Commissioner Steve Radack asked port authority officials why they do not rely on docking fees to pay for expansion and improvements. Then, he said, the authority could take out revenue bonds -- notes that are paid off with port fees rather than property taxes.

Last week, Radack said his questions were legitimate, but that he supports the port authority's November bond package.

"The port is vital to the Houston economy," he said. "It's vital to the entire region."

I don't as yet have a firm opinion one way or the other about this. I don't have any philosophical objections to the port asking for tax-supported bonds. Just because they could finance this stuff out of cash doesn't mean they should. I think Commissioner Radack's question is a good one, and I'd like to hear an answer to it before I make up my mind. Feel free to try to persuade me one way or the other in the comments.

Posted by Charles Kuffner on October 15, 2007 to Election 2007