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TxDOT Director Discusses 2007 Highway Funding Issues

From the Texas Contractor Austin Bureau The Texas Department of Transportation (TxDOT) could let contracts for $5 billion in construction in 2007 to continue at the approximately the same level as 2006, but questions on the flow of federal funds are creating some uncertainty on what the actual total will be.

January 01, 2007

From the Texas Contractor Austin Bureau

The Texas Department of Transportation (TxDOT) could let contracts for $5 billion in construction in 2007 to continue at the approximately the same level as 2006, but questions on the flow of federal funds are creating some uncertainty on what the actual total will be. Federal budget rescissions could cut hundreds of millions of dollars from highway funding (as well as other federal aid), with Congress having delayed acting on many major budget measures for the new fiscal year.

The total appropriated budget for TxDOT in fiscal 2007 is set $7,731,976,310 compared to $7,732,365,130 for fiscal 2006. Maintenance and preservation work makes up a total of $2,642,801,191 for the year, with the largest portion of that going for contracted maintenance work, at $2,100,237,479. Another $523,011,833 (plus any unexpended balances) is slated for "routine maintenance."

Department officials are looking at how to meet an $86-billion gap in funds that are expected to be available and identified transportation infrastructure needed by 2030. Coby Chase, director of TxDOT's government, business and enterprises division — and legislative liaison for the department reports that's part of the message the agency will be taking to the 2007 legislative session.

"That $86-billion gap between predictable revenues and what needs to be built to reduce congests is a challenge," Chase notes.

In a recent report, TxDOT identified five "areas of pivotal importance" for the agency in its mission of providing "the highest quality transportation system for the state." Those areas including reducing congestion, enhancing safety, expanding economic opportunity, improving air quality, and increasing "asset value." Reducing congestion is a goal Texans are likely to understand easily and applaud. Population growth, increasing vehicle miles traveled and growing trade have put "a tremendous strain" on the state highway system, the report states.

Chase says the past three legislatures, as well as the U.S. Congress, have passed a series of measures allowing TxDOT to "completely change the dynamics" of how Texas highway projects are funded and constructed. Those initiatives have included the Trans-Texas Corridor project backed by Gov. Rick Perry (R), tollroads and pass-through financing which allows regions to keep more money in local areas for projects.

"TxDOT wants to preserve those programs," he notes, "but just how much money will flow to Texas highway projects during 2007 is difficult to predict.

"Unlike most state agencies, which plan their efforts around a two-year budget cycle, TxDOT looks to a '10-year horizon,' and is tuned a six-year federal spending cycle," he explains. "On the federal side, about 90 percent to 95 percent of the money comes through by formula, with state highway agencies receiving funds through the Federal Highway Administration."

But for the past several years, Congress has been slow in passing appropriations measures to cover programs for the new federal fiscal year, which began Oct. 1. As a result, many federal programs are being financed under "continuing resolutions," which allow agencies to continue spending at the same rate authorized for the previous fiscal year.

However, Chase reports, "Over the past year, the Feds have had to ask for money back from all the state transportation departments," with those rescissions based on a percentage of the funding provided by the federal government. In Texas' case, that amounted to $305 million, according to Chase.

That situation has resulted from the need by the federal government for programs such as hurricane relief, fighting terrorism and the war in Iraq, Chase explained — adding that he's not commenting on the need for those efforts but that it has caused federal funding to become "more unreliable. We're guessing that there could be another rescission with the final [2007] budget."

The possibility of continuing instability in federal funding likely will prompt the governor and Legislature to continue their efforts to make Texas' transportation program even more self-sufficient.

One top legislative issue for TxDOT 2007 will be seeking a mechanism to capitalize the Texas Rail Relocation and Improvement Fund. Voters approved creation of the fund in 2005, but it now needs to be capitalized.

The fund is intended to finance relocation of railroads particularly in urban areas — something TxDOT argues can speed up rail freight transportation as well as improving safety for Texans by reducing traffic congestion and freeing up right of way for highway or commuter rail corridors — and reducing chances of chemical spills in highly populated areas.

Another issue will be county corridor planning. "Cities have the authority to plan for transportation corridors when they know there will be a future road in the area," Chase explains.

That is not the case for counties, which are likely to need such authority with the Trans-Texas Corridor on the horizon, he says.

Legislation providing such authority cleared the House of Representatives but filed in the Senate late in the 2005 session, Chase notes.

An important issue for the department — and taxpayers — is a proposed change in procedures for procuring engineering services. TxDOT is required to select engineering services based on "best qualified" provider and cannot discuss price at the start of the bidding process, Chase explains. If an agreement can't be reached on the cost of services, the department has to move on to the next "best qualified" provider, but can't return to the previous one, he says.

"We're not trying to low-price engineering services — we want quality — but we want quality and price to intersect."

Other topics Chase puts high on the legislative list is clarification of the department's authority to designate exclusive truck lanes "where it makes sense to do that." Also on the list is sobriety checkpoints — something he notes likely will be the source of some controversy. The issue has failed in past legislative sessions, but Chase feels it's worthwhile to revisit the topic.

"Texas doesn't do well in comparison to other states" in dealing with the problem of drunk driving, he argues. And as part of TxDOT's duty to promote safety, Chase concludes, "we need to do everything we can to get drunk drivers off the road."

Specific spending categories for TxDOT for fiscal 2007 include:

  • Planning, design and management of highway projects, $342,712,703.
  • Contracted planning and design, $375,658,667.
  • Acquisition of highway right of way, $451,084,667.
  • Aviation services, $62,149,656 (plus any unexpended balances from 2006).
  • Public transportation, $56,939,537.
  • Maintenance support of the Gulf Intracoastal Waterway, $898,626.
  • Maintaining and operating ferry system, $18,653,255.
  • Registration and titling, $64,313,919.
  • Vehicle dealer registration, $5,756,614.
  • Traffic safety, $26,340,414.
  • Travel information, $19,738,315.
  • Automobile theft prevention, $12,525,967.
  • Rail safety, $1,158,750.

TxDOT also has a $145,499,818 capital budget, including transportation and information resource technology items and capital equipment. The total includes $1,027,400 for acquisition of land and other real property, and $59,280,000 for construction of buildings and facilities. Another $8,773,860 is included for repair and rehabilitation of building and facilities. Specific capital projects will be decided by the Texas Transportation Commission during the year.

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