DALLAS - Texas Gov. Rick Perry and top legislative leaders yesterday urged lawmakers to allow use of state retirement and other investment funds for transportation projects and demanded immediate issuance of $1.5 billion of bonds authorized last year.
In a letter to Texas Transportation Commission chairman Deirdre Delisi, a recent Perry appointee, Lieut. Gov. David Dewhurst and House Speaker Tom Craddick, R-Midland, joined the governor in outlining plans to solve the state's transportation funding problems, including new bond provisions.
"Due to a variety of factors, including the steady population growth of our state, inflation in the construction industry, rescissions in the federal highway funding program, and the Texas Mobility Fund reaching its bond capacity, our ability to fund needed transportation projects in the future is limited," the letter read. "We believe these measures to be a good start to addressing the long-term challenges of financing a world-class transportation system."
The letter recommends creating a transportation finance corporation "or similar entity" that would manage investments from state investment funds. Although the letter does not specify which funds might invest, Mike Wintemute, a spokesman for Dewhurst, said investments might come from the Teachers Retirement System of Texas, the Employees Retirement System of Texas, or the General Land Office.
Officials at the Texas Department of Transportation, the agency supervised by the Texas Transportation Commission, said they welcomed proposals on how to solve the funding crisis.
"This could do for transportation what the Permanent University Fund did for higher education in Texas," the agency said in a statement, referring to the PUF that backs bonds for Texas schools, conferring its triple-A rating.
The idea for the investment plan came from Sen. Steve Ogden, R-Bryan, chairman of the Senate Finance Committee, Wintemute said.
"Sen. Ogden was one of the people who brought this idea to the lieutenant governor because banks have been interested in investing in infrastructure in Texas," Wintemute said. "And, if the banks are interested, then we should give the state investment funds the option, as well."
A spokeswoman for the Senate Transportation and Homeland Security Committee said that its chairman, Sen. John Carona, R-Dallas, supports the legislation outlined in Perry's letter.
Wintemute said he had no figures for how much state investment funds might contribute to transportation funding. The letter suggests "projects that offer a potential solid long-term return," which Wintemute said likely means toll projects.
The issue ties into a simmering dispute over the use of private toll funding in Texas. In the 2007 session, lawmakers under SB 792 imposed a two-year moratorium on privately funded toll projects except for those already underway.
The three Republican leaders said they would push to end use of fuel-tax revenues for the Department of Public Safety.
The letter urges legislative appropriations for $5 billion of general obligation bonds approved by voters last year for transportation projects.
The letter also urges Delisi to issue the Proposition 14 highway fund bonds, whose capacity was increased last year from the $1 billion per year approved in 2003 to $1.5 billion.
"The immediate sale of up to $1.5 billion in voter and statutorily authorized Proposition 14 bonds will ensure that greater road funding levels are maintained through the fall and spring until we can work with other elected officials to provide additional solutions," the letter advises. "Please prepare your staff for an Aug. 29 Bond Review Board meeting and September sale of Proposition 14 bonds."
Proposition 14 also allows TxDOT to borrow on a short-term basis about $600 million and issue tax anticipation notes to cover temporary cash flow shortfalls.
As lieutenant governor, Dewhurst is the presiding officer over the Senate and makes appointments to committees.
Perry is not likely to face resistance from Delisi, his former chief of staff and a staffer in the presidential campaign of President Bush, who preceded Perry as governor. In April, Perry appointed Delisi to the position left vacant by the death of controversial chairman Ric Williamson in December and temporarily filled by Hope Andrade.
"There are many ways a transportation corporation could be crafted, but the bottom line is the opportunity for Texans to invest in their infrastructure for the long haul and enjoy not only the congestion relief but the economic return," TxDOT's statement said.