DALLAS - The Texas Transportation Commission approved a $1 billion issue yesterday after learning that the state may need as much as $313 billion to build and maintain highways through 2030.
The new general obligation bonds, the eighth series authorized by the commission, are expected to be issued in March or April. The bonds carry Texas' double-A rating and are also backed by revenues from the state Mobility Fund, derived from driver's license, inspection and other fees.
The five-member commission approved the bonds and other funding amid uncertainty over its own future. Two days earlier the state Sunset Advisory Commission voted 7 to 5 to abolish the five-member board and replace it with a single commissioner appointed by the governor and answerable to a special legislative panel.
With the 2009 legislative session less than a month away, political tension has heightened over how to finance future highway projects.
On Wednesday, a blue-ribbon panel issued its "2030 Committee's Texas Transportation Needs Report," showing that the state would need to spend $313 billion to keep up with transportation needs over the next 22 years. Such a huge sum would mean more than tripling current annual spending.
The 12-member committee of industry and government leaders based its estimates on several factors, including increased population growth and freight traffic between 2009 and 2030.
Traffic delay in urban areas has increased more than 500% in the last two decades, according to the Texas Transportation Institute. Texas is also handling a rapidly growing number of trucks, with almost 30% of North American Free Trade Agreement trade and almost 70% of trade from Mexico entering through Texas, according to the U.S. Department of Transportation.
"These increases in usage of the Texas transportation system will further deteriorate roadways and increase congestion in urban areas," the report found.
Deirdre Delisi, chairwoman of the TTC, named the 12 members of the committee and said she hoped the report would guide state and local leaders. In the past, the Texas Department of Transportation has been accused of inflating its funding needs. But the report is seen as an independent assessment.
"We clearly face a tough challenge in providing the transportation system Texans deserve and expect over the coming decades," Delisi said. "By fostering open, communicative, and collaborative relationships with leaders across the state, TxDOT can work with local and state governments to identify, finance and implement the innovative solutions required to meet such challenges head-on."
In its meeting yesterday, the TTC also named Banc of America Securities as the remarketing agent and provider of a standby bond purchase agreement for its Series 2005-B variable-rate bonds, replacing Depfa. A standby bond purchase agreement with Depfa on the bonds was scheduled to expire on June 1, 2012. The agreement provided coverage for the purchase price of tendered bonds, including up to 35 days of interest at a rate of 12%.
