Houston area will get $1.3 billion of road work out of $9 billion added to state’s 10-year highway plan.

DALLAS -- Texas highway commissioners have added $8.9 billion and 230 new projects to the state's 10-year transportation plan, with some $2.5 billion of the new funding dedicated to congestion-easing projects in the state's four major population centers.

"This is a major step forward," commissioner Bruce Bugg said of the revised long-range plan approved on Tuesday by the Texas Transportation Commission.

While most other states are scrambling to find money for highways, Texas is able to increase funding of its transportation infrastructure, thanks mostly to additional road revenues provided by voters since 2014, said commissioner Victor Vandergriff.

"The funding glass is three-quarters to half full," Vandergriff said. "What's not to like about that? That's terrific news for urban areas."

Texas voters in 2014 approved using a share of the Rainy Day Fund for highway projects and in 2015 agreed to divert a portion of state sales tax revenue to roads.

A revenue estimate from state Comptroller Glenn Hegar's office in February said collections dedicated to the transportation system are expected to exceed $25 billion in fiscal years 2018 and 2019. That would be a doubling of dedicated state transportation revenues over the past decade, Hegar said.

The state taxes on motor fuels of 20 cents per gallon of gasoline and diesel bring in about $3.4 billion per year, making them the fourth-largest source of Texas revenues.

The funding boost still isn't enough to fix all the transportation problems in Texas, Vandergriff said.

"The facts are there are never enough dollars out there for every project and we are going to be limited at the state level with what we can do," Vandergriff said. "We know we are going to have to address that. Not us [the transportation commission], the state of Texas."

The new projects are necessary because traffic in the urban areas will get more congested if the Texas population doubles as expected by 2050, Bugg said.

Estimates call for an population of 54 million residents by then, up from 27 million Texans in 2015, he said.

"We know we have congestion problems today, but we are mindful of those new Texans joining us in the future," Bugg said.

The $2.5 billion of additional spending through the state's Clear Lanes Initiative, aimed at reducing gridlock in urban areas, includes $415.6 million to reduce bottlenecks on I-35 in Austin, $807.7 million for upgrades to the I-635 loop in Dallas-Fort Worth, $1 billion for highway projects in Houston including a $500 million rebuild of the I-45/I-69 interchange, and $318 million of highway work in San Antonio.

All the work is scheduled to get underway by 2021.

Funding for the Clear Lanes program comes from Proposition 7, a constitutional amendment approved in 2015 that will transfer up to $5 billion of sales tax revenues to the State Highway Fund over the next two years.

Proposition 1, which voters approved by an 80% margin in 2014, transfers a portion of the state's oil and gas severance taxes from the Rainy Day Fund to the highway fund. The amendment is expected to bring in up to $1.7 billion per year for highways, though collections will vary as energy prices fluctuate.

The Texas Senate passed a $217.7 billion state budget for fiscal 2018 and 2019 on Tuesday with the help of $2.5 billion made available by delaying the move of the sales tax revenues to the highway fund from the last month of fiscal 2019 to the first month of fiscal 2020.

State House Speaker Joe Straus, a Republican from San Antonio, said the Senate was "cooking the books" with the delay.

"Counting money twice in order to balance a budget is not a good idea," Straus said. "This is the Texas Legislature. We are not Enron."

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.