DALLAS — The Texas Department of Transportation plans on leveraging up to $2 billion more than expected over the next two years after reassessing federal revenues and construction costs, officials said.
After reviewing project budgets, analyzing federal funding, and adjusting money management, the department estimates it can afford as much as $2 billion in additional projects, officials said.
“This additional one-time funding provides great opportunity to accelerate some of the state’s most critical projects,” Phil Wilson, executive director of TxDOT, said in prepared remarks on the finding. “We must ensure these dollars are put to the best use throughout Texas.”
TxDOT’s staff is working with the state’s metropolitan planning organizations that allocate state and federal transportation funding for regional projects and also to decide what kind of financing should be used.
“There will be a clear and understandable process for using this funding where it is most needed to accelerate projects throughout the state,” TxDOT said. “Funds to be spent will be measured against ways to address congestion, safety, maintenance, and connectivity.”
TxDOT, which develops projects funded with debt issued by the Texas Transportation Commission, generates some of the largest revenue and general obligation bond issues in Texas. The agency maintains more than 80,000 miles of road and also funds aviation, rail, and public transportation across the state, with more than 12,000 employees.
Funding mechanisms include tolling, public-private partnerships, and tax financing.
TxDOT chief financial officer James Bass said Texas must identify specific projects by September to qualify for an estimated $750 million in federal spending.
States that do not list projects in the official long-range transportation plans by the end of the fiscal year lose that money to other states.
However, spending on the projects does not have to begin before the current fiscal year.
Over the past three years, Congress has added about $34 billion in spending for transportation. Texas’s anticipated $2.1 billion in highway revenue is expected to rise to $2.8 billion.
The Texas Mobility Fund created by the Legislature in 2001 is expected to provide an additional $600 million from vehicle-related fees.
Over the past six years, TxDOT has issued $6.3 billion under the mobility fund program while retiring about 3% of the debt per year.
The department has not replaced the paid-off debt with new bonds because of coverage requirements that the fees exceed debt service by at least 10%.
TxDOT estimates that it can issue about $600 million more of bonds by taking advantage of current low rates to refinance outstanding debt.
The agency can also take advantage of construction costs that have fallen sharply since the recession. Bids for projects have come in about 20% below projections, officials indicated.