Transportation: Texas faces serious financial challenges
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In May 2008, the Texas Transportation Commission appointed a committee of a dozen business and civic leaders from throughout the state. This 2030 Committee determined that Texas needs to invest $315 billion for between now and 2030 to address road and bridge maintenance, increasing traffic congestion, rural roadways and highway safety. Projections show that the state's population will grow 27 percent over the next 25 years, while road usage will increase by 67 percent.
That does not bode well for a state facing decreasing revenues for addressing transportation needs. In her testimony, Delisi noted that the State Motor Fuels tax has not increased since 1991 and the federal fuel tax has not increased since 1993. And during the recession, state gas tax revenues have decreased because Texans stayed home more trying to save on gas costs. Couple that with motor vehicles with increasing fuel efficiency and revenues go even lower, since the tax is a flat rate on each gallon of gas sold. It does not go up or down as the price of a gallon of gas increases or decreases. As fuel efficiency increases, less gas is purchased. Therefore, less revenue is created.
Delisi said the median forecast for fuel efficiency in motor vehicles by 2030 is 34 miles per gallon, up from 17 miles per gallon in 2008. She said that means "twice the efficiency, half the revenue and all the congestion."
Another anomaly pointed out in Delisi's testimony is the fact that some State Highway Funds have in the past been diverted to other agencies and functions that often have little or nothing to do with the state's transportation needs. Purchasing power of these funds is declining as costs for products increase. Although there has been a drop in those costs during the recession, Delisi said she expects them to climb again as the nation digs its way slowly out of the recession.
History has shown that Texas cannot depend on the federal government as a stable funding source for its transportation needs. Some of the current financing options available to the state are short-term borrowing, toll revenue bonds, State Highway Fund revenue bonds that were previously approved by Texas voters and Texas Mobility Funds approved by voters. Also there are a number of innovative financing "tools" available, such as public-private partnerships (often used for toll roads) and pass-through financing (where a local government entity pays costs for projects up front and is reimbursed by the state after the project is completed).
Regarding public-private partnerships, Pickett questioned Delisi why the state cannot do what the private sector does in relation to Comprehensive Development Agreements (CDAs) in which a private entity finances a project. Texas Department of Transportation Executive Director Amadeo Saenz said the reason the state cannot do the same thing is because the private sector uses its own money as equity. "They have money we don't have," he said.
Carona noted that the reason the state does not have money is because that equity money would come from a fund fed by the Motor Fuels Tax, which has not increased since 1991 and thus is not supporting the fund enough to provide the necessary equity.
Even with the tools and methods of financing available for construction and maintenance of Texas roads, highways and bridges, finding alternative funding sources that are more stable should be at the top of the legislature's "to do" list, said Delisi. "We need to examine new ways to add capacity to our transportation network and maintain the very valuable assets we currently have."
Expect more discussion of this issue as one of the joint interim charges for the Senate Transportation and Homeland Security and Senate Finance committees is to examine transportation funding concepts in legislation proposed during the last legislative session and to make recommendations for alternative state and local transportation funding concepts.
