Current Update

TxDOT's Houston District headed by Gary Trietsch, is having a very successful 3 year period beginning with 2003's record $1 billion in

contract lettings; following that in fiscal year 2004 with a $900 million plus letting and over $1 billion in lettings scheduled for the current fiscal year, 2005.

These record lettings are driven by several key projects like Interstate 10 and the new I-45 Galveston Causeway. They mask, for now, a very real threat in Texas--a transportation funding gap. In the 79th Legislative Session, several initiatives will be in play to try, at a minimum, to hold the line on diversions of funds and added unfunded responsibilities for TxDOT and at best add some more flexibility in funding highways. The following outlines the overall needs and what happened to highway funding as a result of the 78th Legislature.

Governor's Business Council Reports Large Funding Need for Metropolitan Areas

The Governor's Business Council (link) reports that to just maintain present congestion levels in Houston, Dallas-Fort Worth, Austin and San Antonio for the next 25 years we need $179 billion or $38 billion more than currently programmed. If we wish to reduce urban congestion to 1.15 on the Travel Time Index (see Texas Transportation Institute's 2004 Urban Mobility Study (Link) for a description of the Travel Time Index) we will need to spend $218 billion or $78 billion more than programmed.

State Funding for Transportation & Diversions to Other Activities

In fiscal year 2003, state levied fees and taxes on transportation related activities generated $6.4 billion. Of that amount only 46% or $2.9 billion found its way to the State Highway Fund for use by TxDOT.

User Fee or Tax	FY 2003 Receipts	Amount Going to Highway Fund	Percentage
State Motor Fuel Tax	$2.838 billion	$2.087 billion	74%
Motor Vehicle Sales & Use Tax	2.531 billion	0	0%
Motor Vehicle Registration Fee	803 million	789 million	98%
Motor Vehicle Rental Tax	149 million	0	0%
Motor Vehicle Certificates	50.3 million	18.1 million	36%
Special Vehicle Registration Fee	31.59 million	13.4 million	42%
Motor Fuel Lubricant Sales Tax	30.9 million	30.9 million	100%
Commercial Transportation Fees	17.7 million	8.8 million	50%
Total	$6.453 billion	$2.947 billion	46%

Many consider the difference in total receipts and net to the Highway Fund revenue diversions, charges for the use of the transportation system which do not benefit that system. In addition to revenue diversions, there are "expense diversions", obligations of the Highway Fund for other than highway transportation purposes. Examples of expense diversions are the maintenance of roads and parking lots at state prisons, parks and university grounds. The largest expense diversion is the funding of the Department of Public Safety. DPS diversions from the Highway Fund have grown from $109.6 million in 1987 to $445.6 million in FY 2004. This growth is despite years of effort by numerous organizations promoting better transportation in the state.

The 78th Legislature did make significant changes to the state transportation funding structure, allowing greater flexibility to TxDOT allowing them to address growing demand in the state within a tight budget. Specifically:

However, the 78th Legislature also added obligations that siphon off $427 million. These include:

The net positive for Highway Fund from the 78th Legislature on an annualized basis: +$46 million.

Whether or not we buy fully into the Business Council's estimate to maintain congestion levels for an additional $38 billion over 25 years, we should all agree that business as usual--a net annual increase of $46 million--will not get Texas or Texas cities where we all would like them to be.

EPA Report on Clean Air

New EPA Report Says U.S. Air is Cleanest in 30 Years

Total emissions of the six principal pollutants identified in the Clean Air Act dropped again in 2003, signaling that America's air is the cleanest ever in three decades, the U.S. Environmental Protection Agency (EPA). Annual emissions statistics for the six pollutants are considered major indicators of the quality of the nation's air because of their importance for human health and the existence of their long-standing national standards.

Emissions have continued to decrease even as the U.S. economy has increased more than 150 percent. Since 1970 (change numbers to reflect 1970 baseline), the aggregate total emissions for the six pollutants [Carbon Monoxide (CO), Nitrogen Oxides (NOx), Sulfur Dioxide (SO2), Particulate Matter (PM), Volatile Organic Compounds (VOCs) and Lead (Pb)] have been cut from 301.5 million tons per year to 147.8 million tons per year, a decrease of 51 percent. Total 2003 emissions were down 12 million tons since 2000, a 7.8 percent reduction.

The Agency recently issued regulations that will cut diesel pollution by 90 percent, and later this year will finalize regulations cutting power plant pollution by approximately 70 percent.

The EPA says a major reason for the nation's progress is the innovative, market-based acid rain cap-and-trade program enacted in 1990. The Acid Rain Progress Report shows annual SO2 and NOx emissions have declined 5.1 million tons (32 percent) and 2.5 million tons (37 percent), respectively, since 1990. The program generated double-digit cuts at its inception and is now maturing, with small fluctuations up and down as emissions gradually near their respective end goal caps.

The Bush Administration's Clean Air Interstate Rule (CAIR) stands to be the acid rain program of the this decade, enabling the country to once again enjoy sharp cuts in harmful pollutant levels. It will use the same proven cap-and-trade approach as the Acid Rain program, creating financial incentives for electricity generators to look for new and low-cost ways to reduce emissions early.

CAIR will use cap-and-trade to address power plant emissions in 29 eastern states plus the District of Columbia. The program would cut SO2 by more than 40 percent from today's levels by 2010, and 70 percent when fully implemented. NOx emissions would be cut by 50 percent from today's levels by 2010, and 60 percent when fully implemented. The Administration plans to finalize CAIR this fall.

"The Acid Rain Program is a national success story because we achieved early reductions, cost-effectively and with near-perfect compliance," said Leavitt. "CAIR will provide similar benefits, ensuring that our nation's air continues to get cleaner well into the next decade."

For more information: CAIR: see http://www.epa.gov/interstateairquality/ (link)

2003 Emissions Report: see http://www.epa.gov/airtrends/econ-emissions.html (link)

Acid Rain Report: see http://www.epa.gov/acidrainreport (link)

Source for this information is the Environmental Protection Agency.

West Houston Association Issues Brief

TEXAS FUNDING FOR TRANSPORTATION

EPA Reports Air in U.S. Cleaner

Can Texas Urban Transportation Needs Be Met?

Are Recent Houston District Letting "Home Runs" the Norm?

Governor's Business Council Reports Large Funding Need for Metropolitan Areas

State Funding for Transportation & Diversions to Other Activities

EPA Report on Clean Air

New EPA Report Says U.S. Air is Cleanest in 30 Years