Infrastructure Policy Forum
Texas CEC Commentary
September 10, 2009
It’s time to stop patching the roof and get serious about addressing Texas’ mobility problems in something other than a piecemeal fashion.
Investments in transportation infrastructure historically have been funded by user fees. Highway users pay a fee on each gallon of gasoline and diesel purchased, air travelers pay a boarding fee on airline tickets, and so on. A highway user driving a car that gets 20 miles per gallon and paying a combined 40 cent per gallon state and federal user fee pays two cents per mile. With some variations for the fuel efficiency of vehicles, the more a citizen uses the system, the more he or she pays in user fees. For the most part, with the exception of toll roads, that’s the way our existing transportation network was built – through consistent, sustained capital investment programs planned over years.
Contrast that with the approaches to increasing transportation spending taken during the last decade. At the national level, the Congress in 2003 made a decision to spend down surpluses in the Highway Trust Fund rather than increase user fees. As a result, the Trust Fund went broke. An $8 billion infusion of general revenues was required in August 2008 and another $7 billion was required in August 2009.
Congress is currently considering a renewal of the legislation authorizing the federal transportation program. Congressional leaders believe $500 billion is needed over the life of the next six-year bill – a significant increase from the $284 billion authorized over the previous six years. But existing federal user fees are only adequate to support a $236 billion program. And the Obama administration is proposed to postpone the reauthorization for 18 months, kicking the can further down the road.
At the state level, the issuance of Texas Mobility Fund bonds backed by drivers responsibility fees increased state transportation funding for five years, but that program is now for all practical purposes complete, with future fee revenue going to pay off bonds. In 2005, the Legislature authorized borrowing against the future gas tax revenues, essentially charging on the state’s credit card. In two years that program will be maxed out, leaving a legacy of $500 million in annual debt service payments. In 2009, the Legislature allocated $2 billion in general obligation bond proceeds to transportation, but made no commitments for funding after the current biennium
What does this mean for transportation planning? It means start, stop, one foot on the brake, one foot on the gas, race up to the edge of the cliff, back up – hardly an efficient way to proceed. With annual construction spending fluctuating from $2 billion to $5.5 billion, then back down, then back up, and no guarantee for the future, long-term planning programs look like a marathon running sprinting for a mile, then walking.
It’s time to stop asking what are we doing for the next year and start asking what are we doing for the next decade. It’s time to stop focusing on one-time fixes and put in place a longer-term solution.
Long-term capital programs are best financed by consistent, predictable revenue streams that are (ideally) protected from inflation. Major mobility projects can take a decade or more to plan, design, and construct. It’s difficult, if not impossible, to plan a long-term statewide mobility program with annual or biannual clumps of money, even if those clumps are in the billions. Currently, TxDOT and its local transportation partners are canceling contracts for projects scheduled to be constructed in 2012 and after, on the theory that they should not plan and design projects in 2010 that there is no money to build in 2012. That approach to long-term mobility is not good policy.
The long-term goal is best achieved by a ten-cents per gallon highway user fee, 100 percent dedicated to multi-modal mobility (even if that requires a constitutional amendment), and indexed to inflation.
It’s time for Texas to have that discussion.
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