Spending on highway construction and maintenance projects in Texas could reach $4 billion in 2009, if the Texas Department of Transportation (TxDOT) completes its planned bond sales, and if revenues from the state's motor fuel taxes do not slump.
TxDOT Executive Director Amadeo Saenz Jr., P.E., reports that earlier the agency had projected it would be able to fund $2.5 billion in work for 2009, based on expected funding from the gasoline and diesel taxes. That expectation was based on taxes coming in as of July, but as fuel prices continued to soar to record levels, drivers cut back on trips and the amount of taxes collected started to fall.
“Revenues were coming in lower than was projected,” Saenz said. “We're still watching that and may have to adjust for that.”
As 2008 moved to its close, the Texas Transportation Commission had approved the sale of so-called Proposition 14 bonds, which allow TxDOT to sell the bonds, which are to be repaid from future tax revenues, “to allow us to bring some projects forward,” Saenz reported. “The commission has used its authority to issue $1.5 billion in bonds last September and is planning to issue $1.4 billion next September. The funding from those bonds will be allocated with priority given to safety projects.” Approximately $600 million in safety projects will be selected around the start of the year.
In 2009, TxDOT will undergo “sunset” review by the Legislature, which will determine what changes should be made in the agency's operations – as well as allocating funding for the department for the coming biennium.
Meanwhile, the department is awaiting recommendations from its 2030 Committee, a panel of business, transportation experts and academic representatives that will give its report regarding what should be done to help meet Texas' transportation infrastructure needs through the year 2030. The committee has been examining topics such as bridge rehabilitation and replacement, maintaining the state's 180,000 lane-miles of roads and highways, and mobility challenges in metropolitan areas and statewide. The panel's recommendations are expected to become the basis for future work.
“They're looking at the economic benefits of investing in transportation,” Saenz said, noting that issue is likely to become even more important with the current economic downturn. “If the state of Texas wants to continue to be competitive, investment in transportation infrastructure is going to have to be kept up.”
Uncertainties in funding on the state side aren't the only question in the highway funding picture for 2009. “Federal highway funding has been kind of a rollercoaster,” Saenz said. The federal highway trust fund was expected to go into a deficit, but Congress has provided $8.5 billion to keep the fund solvent – at least for the time being.
“Congress has some big challenges ahead,” Saenz observed, including working on the next transportation funding bill in 2010.
Two commissions have been looking at possible funding changes on the federal side, resulting in a recommendation that the federal motor fuel tax be increased by 8 cents per year for five years, resulting in a 40-cent increase, Saenz reported. “If that occurs, the proposal calls for the states also to be required to raise their motor fuel taxes. Since the funding ratio between the states and federal governments has been 60-40, that would result in a $1 increase for the states,” Saenz commented.
Saenz said Texas and other states also are waiting to see if the federal government launches a stimulus package to promote spending on transportation infrastructure.
The American Association of State Highway and Transportation Officials (AASHTO) has submitted a proposal for a $50-billion program nationwide. TxDOT, through AASHTO, has submitted $6 billion in requests.
The Transportation Commission has written the Texas congressional delegation in support of the idea. However, the commission also requested such funds be made available as a block grant, rather than being earmarked for specific projects.
“The reason for that,” Saenz explained, “is that if a particular project should be delayed for some reason – such as difficulty in acquiring right-of-way or completing environmental impact studies – funding could be transferred from that project to another project that is ready to proceed. That would be useful, given the amount of transportation infrastructure that is needed in Texas.”
Trying to calculate that total is difficult, Saenz said, but in 2004, the amount was estimated at $86 billion. That later was put at $66 billion, “but only for mobility lanes.” Those estimates “might be dwarfed” if maintenance requirements are included, he added.
Regardless of what the amount may be, Saenz argues that the state needs to tackle as much of the need as possible, and as quickly as resources can be made available.