We have the beginnings of a real discussion about how to begin closing the gap in transportation funding in the State of Texas.  This is a start.  A very good start.  Let’s keep up the momentum. 

TxDOT Tells Lawmakers Funding Crisis Around the Corner

Texas Tribune February 4, 2013

After funding billions of dollars in roadwork through debt over the last decade, the Texas Department of Transportation is two years away from a severe drop in funding unless lawmakers find more cash, agency officials said at a budget hearing Monday.

TxDOT Chairman Phil Wilson told the Senate Finance Committee that the agency is at a crucial turning point as large state bond programs are set to hit their limit by 2015.

“The fact is, we’re running out of capacity to issue the debt — we’re maxed out — and that’s where most of our money comes from,” Texas Transportation Commission Chairman Ted Houghton told the committee.

More than a decade ago, lawmakers paved the way for an era of “innovative financing” at TxDOT in which the agency ramped up highway projects largely by issuing billions of dollars in bonds and approving more toll roads. The spending peaked in 2009, with TxDOT moving forward with more than $9 billion in highway contracts that year, according to written testimony submitted by the agency to the committee Monday. If new revenue isn’t found, TxDOT expects funding to drop to less than $3 billion in highway projects in 2016 — a level far short of meeting the needs of a state growing as fast as Texas, agency officials said.

Wilson told senators the agency needed at least $4 billion a year in additional funding: $3 billion for expanding the state’s transportation network and $1 billion to keep up with maintenance. Exacerbating the situation is truck traffic related to the natural gas drilling boom that has caused billions of dollars in unexpected damage to roads and bridges around the state in recent years.

Finance Committee chairman Tommy Williams, R-The Woodlands, described the situation as “a fiscal cliff of highway funding.”

“This is one of those areas where really the future of our state is hanging in the balance,” Williams said.

TxDOT officials said the agency has accrued about $13 billion in debt. Its proposed budget for the next two years proposes devoting $2.5 billion of its $20.8 billion budget to servicing that debt.

State Sen. Kevin Eltife, R-Tyler, said the amount of money TxDOT is having to put toward its debt shows that lawmakers have made poor decisions about transportation funding. He said raising taxes years ago would have been far cheaper than the situation the state currently faces.

“Sometimes the conservative thing is to pay cash,” Eltife said.

While Sen. John Whitmire, D-Houston, agreed with Eltife that lawmakers needed to find more revenue for TxDOT, he expressed annoyance that agency officials hadn’t spoken more urgently at the hearing and beforehand about how serious the problem is.

“Y’all don’t seem nearly as excited and anxious as I would expect. …Y’all got to get excited if you expect the Legislature and its constituents to respond,” Whitmire said.

He accused Wilson, who was appointed to head the agency in 2011, of passively taking his salary and not aggressively tackling the problems.

Wilson apologized if Whitmire didn’t feel a sense of urgency from the presentation but took issue with the notion that he wasn’t committed to finding a solution.

“I came back to try and fix this,” Wilson said. “I didn’t come here to draw a check.”

At the hearing, lawmakers discussed several options for raising more money for transportation, including increasing car registration fees and withdrawing $2 billion from the Rainy Day Fund to finance $4 billion to $6 billion in transportation projects. Williams spoke about restoring $400 million of the $600 million in gas tax revenue that is currently diverted from the state's highway fund each year to support the Department of Public Safety.

Wilson declined to tell lawmakers which options he preferred but stressed the importance of having a reliable stream of revenue for TxDOT. Any short-term fixes will make it tougher to plan for projects in the future which will drive up costs, he said.

“That ability to plan for five to 10 years is just mission critical,” Wilson said.

Fee Hike a Leading Contender to Raise Money for Roads

Texas Tribune Aman Batheja October 16, 2012

Texas lawmakers are mulling ways to raise more money for roads during next year’s legislative session and two proposals are drawing the strongest interest.

The Texas Association of Business has thrown its support behind a $50 hike in the annual fee Texas drivers pay to register vehicles, with the money earmarked for new transportation projects. Meanwhile, some key lawmakers favor dedicating to roads the sales tax from vehicle purchases that Texans already pay.

As the 2013 legislative session approaches, transportation advocates have been trying to draw more attention to severe shortages in road funding, stressing that delaying road work around the state will lead to more congested roads and more expensive fixes later on.

"The cost of doing nothing is very expensive," said state Sen. Robert Nichols, R-Jacksonville, who was appointed chairman of the Senate Transportation Committee earlier this month.

Federal and state gas taxes remain the primary revenue source for road construction and maintenance, but they are widely viewed as inadequate for the state’s needs. Texans pay 38.4 cents in federal and state taxes per gallon, a figure that hasn’t changed in nearly 20 years despite inflation, rising construction costs and the improving fuel efficiency of cars. And the state’s 20 cents-per-gallon gas tax is lower than the national average of 29.7 cents per gallon, according to the Legislative Budget Board.

The Texas Legislature, though, is unlikely to approve raising the gas tax for the foreseeable future, lawmakers and political observers say. Past efforts to raise fees or taxes have failed, in part, due to criticism that a large portion of the gas tax is currently diverted to spending on things other than roads, such as funding the Department of Public Safety and public education. But ending the diversions also faces an uphill battle, because those areas of government that rely on some of the gas tax would have to find new funding to replace it. House Speaker Joe Straus, R-San Antonio, has called for ending budget diversions in the next session.  Last year, state Sen. Tommy Williams, R-The Woodlands, proposed raising the state’s vehicle registration fee by about $50. Unlike the gas tax, registration fees are entirely dedicated to transportation and do not fall as cars become more fuel efficient.

Such a fee hike would generate $1.2 billion a year, which could then be leveraged to raise several more billion by selling bonds, according to the Texas Transportation Institute. Texans currently pay an annual state registration fee of $50.75 for cars and light pick-up trucks. The cost typically increases to about $65 with the addition of local county fees and other fees. Texas has the 18th-highest vehicle registration fees among states.

The Texas Association of Business recently endorsed doubling the state portion of the vehicle registration fee to bankroll new transportation projects. TAB President Bill Hammond said his group’s board voted nearly unanimously in support of the plan.

“Clearly this is a difficult task, but the business community in Texas feels like it’s spending an awful lot of time waiting in traffic,” Hammond said. “This would be new money coming in for maybe $15-16 billion of bonds for road construction.”

Rather than raising a current fee, Nichols wants to take a tax that many Texans already pay and dedicate the revenue to roads. He is calling for a constitutional amendment to dedicate the sales tax on new and used vehicle purchases to expanding and maintaining the state highway system and to paying off transportation-related debt. The money currently goes into the state’s catch-all general revenue fund.

The change could be phased in slowly over 10 years so as not to “wreck the budget,” Nichols said. Though the amount of revenue raised for roads would be small at first, knowing that the revenue stream would grow would allow the Texas Department of Transportation to move quickly on perhaps $10 billion worth of new projects, he said.

Nichols predicted that the public would back such a measure because it makes intuitive sense.  “To take the tax on a vehicle and dedicate it to infrastructure is a very logical thing,” Nichols said.

At last month’s Texas Tribune Festival, state Rep. Larry Phillips, R-Sherman, who is chairman of the House Transportation Committee, said Nichol’s proposal has potential, because it would not be viewed as a tax increase.

“That’s something we could get on, and I think get some strong support in the House,” Phillips said.  Nichols said raising the vehicle registration fee is also worth considering but that it might be a tougher sell.

“I think the big question is whether raising the vehicle registration fee is going to be considered a new tax or raising a tax,” Nichols said.

Phillips and Nichols are among a handful of transportation-focused state lawmakers who have been speaking around the state about the need to address funding concerns soon.

“It’s almost like we’re enacting Paul Revere’s ride but we’re not saying ‘The British Are Coming,’” said state Rep. Drew Darby, R-San Angelo, at the Tribune Festival. “We’re saying ‘The potholes are coming.’”

Throwing money away is what we do when we drive on dangerous, poorly maintained and congested roadways.  Texas Good Roads and the Road Information Program (TRIP) have studied the amount we throw away and found that Houstonians PAY nearly $2,000 annually.

Let’s fix these roads up!