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Politics, economy challenge Texas highway funding

By   /   February 22, 2016  /   News  /   No Comments

The Texas Department of Transportation announced a few weeks ago it would be doling out $1.3 billion for the state’s biggest cities to do battle with terminally unrelieved highway congestion.

Houston would get $443.3 million; Dallas, $364 million; San Antonio, $170.3 million; Fort Worth, $163.8 million; and Austin, $158.6 million. The windfall would come from tax and license revenues wrested by state voters from another agency and wouldn’t cost taxpayers an extra dollar.

Everyone seemed pretty happy about it, in particular the big city politicians with their figurative hands out. The governor, the executive director of TxDOT, and the Texas Transportation Commission’s congestion czar, J. Bruce Bugg Jr., said the expected nice things.

But was this the “jump start” to solving an intractable problem, as TxDOT Director James Bass called it, or a flicker to be snuffed out by political and economic reality?

The future of large-scale highway projects of any kind in Texas will be dictated by an agency wearing a legislative choke collar and short leash working with roughly $500 million less in 2017 because of a precipitous drop in oil and gas tax collections.

Borrowing or building toll roads are now “absolute last resorts,” to ease congestion, Rep. Ron Simmons, R-Carrollton, chairman of the House Subcommittee on Long-term Infrastructure Planning, told Watchdog.

Rep. Ron Simmons, R-Carrollton, says state highway project funding is OK for now.

Rep. Ron Simmons, R-Carrollton, says state highway project funding is OK for now.

For this year and next severely reduced collections of oil and gas severance taxes shouldn’t affect TxDOT planning, Simmons said. Beyond that, he said, the legislature would have to get creative to keep TxDOT on a pay-as-you-go basis.

Millions of Texas drivers idling in urban highway bottlenecks will have plenty of time to consider whether the Legislature can make fiscal conservatism work and ease some of the worst highway congestion in the country.

“If those greater issues are not addressed people are going to wonder why they voted for Proposition 1 and Proposition 7 in the first place,” Jack Ladd, president of the non-profit, Move Texas Forward, the group that spearheaded passed of Proposition 7 last year.

To put the highway congestion funding into some context you have to go back 15 years, long before Props 1 and 7, to first term Gov. Rick Perry’s proposal to build the Trans-Texas Corridor.

A $175 billion, 50-year, 4,000-mile, public/private hybrid project coming from a heretofore small government conservative caused political convulsions still being felt today.

At the center of Perry’s vision was a network of toll roads, a free market answer to taxing for new lanes. In particular, an answer to raising the 38.4 cents-a-gallon tax on gas that no Legislature since 1993 had the gumption to increase.

Rather than excite the conservative base, the Trans-Texas Corridor set off a different kind of grass roots revolt against what would have been the state’s need to forcibly take at least some of the nearly 600,000 acres of right of way the project needed.

“There were a lot of people with a lot of anger over toll roads,” Ladd said. “But that raises the question, if you aren’t going to do it with toll roads how are you going to do it?”

The president of Move Texas Forward says voters for Propositions 1 and 7 will be upset if their efforts haven't been enough

The president of Move Texas Forward says voters for Propositions 1 and 7 will be upset if their efforts haven’t been enough

It took 10 years to bury the Corridor, during which time TxDOT gained a reputation for thinking big, borrowing big and not listening very well.

In 2009 the state’s Sunset Advisory Commission reported to the Legislature its opinion that TxDOT had no long term vision and a planning process opaque to elected official and citizen alike.

In short, nobody trusted the state’s road builder, Watchdog reported.

So dysfunctional was the agency thought to be that the Advisory Commission took the unusual step of reviewing TxDOT for the 2011 Legislature. Among those things that had not changed the Commission said:

“TxDOT’s internal controls are not adequate to ensure the transparency and accountability necessary to maintain public trust and confidence.”

And:

“Until trust in the Texas Department of Transportation is restored, the state cannot move forward to effectively meet its growing transportation needs.”

A $2 million taxpayer financed effort at soul searching produced a critique parsed into 628 pages.

At the same time the agency was being dressed down and dissected, something called the 2030 Committee convened by the state declared TxDOT would need to spend $14.3 billion a year or more than twice what it was spending in 2008 just to keep up with the state’s ever growing traffic needs.

“The Legislature has sent  a clear message that they have the authority and oversight,

Ladd said. “The Legislature doesn’t want TxDOT to leverage to pay for big projects any more.”

In 2014 by legislative directive, state voters approved redirecting $1.74 billion a year in gas and oil taxes to TxDOT. For reasons that are as political as anything else, the tax money had in previous years been put in something the state quaintly calls the Rainy Day Fund.

Voters this past November gave TxDOT a second shot with Proposition 7, approving redirecting as much as $2.5 billion in sales tax money a year to fund highway projects.

While it was widely reported the amount would be $2.5 billion a year, voters actually approved giving the state the authority to divert any amount over $28 billion and up to $30.5 billion.

The Legislature forced TxDOT to go cold turkey on borrowing well before the price of oil dropped to $30 a gallon. Little was said by the state’s ballyhoo-makers that just a week before the inaugural round of highway congestion money the pool might be halved the following year.

Officially, state Comptroller Glenn Hegar told legislators not to worry just yet. Yes, gas and oil taxes are down now, he said, but his sales tax projections have TxDOT getting the full $2.5 billion in sales taxes in in 2017 and 2018.

Simmons has asked TxDOT and the Texas A&M Transportation Institute to look to other states for creative ways to fund highway construction.

Before the 2017 session starts, Simmons said he has asked to TxDOT to submit costs for everything on its short and long term planning lists to give the Legislature a reference point for what is needed.

TxDOT must also rank in importance all of its projects with a scoring system the Legislature required of the state and local planners in House Bill 20, passed in the last session, he said.

None of which addresses what the state will do if the congestion flood overwhelms the revenue streams.

“It’s both a money problem and a political problem,” Ladd said. “We’ll have to see what happens.”

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Mark Lisheron is the Austin-based reporter for Watchdog.org. He first served as a national Watchdog reporter before joining Texas Watchdog. He spent almost 30 years in newspapers, 14 of those years for the Milwaukee Journal Sentinel and a decade with the Austin American-Statesman. Mark can be reached on Twitter at @marktxwatchdog or by email at [email protected]