AUSTIN – The infusion of new road funding available to the Texas Department of Transportation may not resolve the traffic congestion on the state's urban freeways unless the revenue stream is made more robust.
"The congestion did not happen overnight, and it won't go away overnight," Texas Transportation Commissioner Jeff Austin III said at the opening session of The Bond Buyer's 20th Texas Public Finance Conference Monday. "The good news is that despite the restrictions, despite the economy, our glass is half full."
The Transportation Commission last week unveiled a $1.3 billion program that will fund 14 projects in the state's five largest cities. The projects were selected because they will unsnarl some of the most congested segments on the highway system and can get under way soon, Austin said.
"There's not enough money in Texas to throw dollars at the roads to play catch-up," he said. "Transportation is the heart and soul of economic development."
The congestion-busting effort is funded in part with $1 billion realized because the Legislature has ended the diversion of state gasoline tax revenues to the state highway patrol and other law enforcement agencies, Austin said.
"Even with that, we're not getting the full value from the state's gasoline tax of 20 cents per gallon," he said. "We still have 5 cents of that going to the public school fund. We need to have all the gasoline tax money coming back to transportation."
Texas voters approved a constitutional amendment in November 2014 that redirects a portion of annual oil and gas production tax revenues from the state's rainy day fund to the transportation fund that generated $1.7 billion in its first year.
Proposition 7, a state constitutional amendment approved in 2015, could direct as much as $3 billion in state sales tax revenue every two years to TxDOT. The state could use the revenue only to acquire highway rights-of-way, build and maintain non-tolled roads, and make payments on general fund-backed debt that TxDOT has accumulated in the past five years.
Those sources seem robust but are volatile, Austin said.
Proposition 1 funding began at $1.74 billion in fiscal 2014, but dropped to $1.1 billion in 2015 and is expected to be $1.1 billion in 2016. However, the drop in oil and gas drilling due to the fall in energy prices has reduced estimates for 2017 to $600 million, he said.
The Legislature directed TxDOT to determine how much it would cost the state to eliminate tolls on all Texas highways and the preliminary estimates are staggering, Austin said.
"It's a really, really big number right now," he said. "It would take all the Proposition 1 and 7 revenues over the next 20 years to do that. If we do, that means no new lanes miles would be added to Texas highways for two decades."
The technology companies that are developing intelligent cars could be useful partners in funding new highway projects, said Tripp Kaiser of Municipal Market Analytics.
"Driverless car developers have a business model that is very dependent on a modern, well-maintained highway system," Kaiser said during a panel discussion on transportation infrastructure. "The model could be the airports, which operate a public facility in cooperation with privately held airlines, which do not build the airplanes."
The advent of high-tech cars loaded with sophisticated electronics also could pave the way for a vehicle-miles-traveled system of funding highways, with a fee per mile that would replace the gasoline tax, Kaiser said.
