June 15, 2007
For the last several years, we all have been involved in the debate over how Texas finances roads. You might think that, as a result, the 80th Legislature would have seen fit to provide new transportation financing tools. After all, the session began with lots of yelling about the use and proliferation of toll roads. Through that, there seemed to be three points of agreement:1. We must – simply must – decrease traffic congestion, and we need to start today.2. Current funding sources (that don’t involve tolls) simply aren’t sufficient.3. Let’s avoid tolls.In other words, if the environment was ever ripe for the creation of innovative tools other than toll roads, it was the past six months.Well, folks, that didn’t happen. This is an update about all that was done, and left undone, by the 80th Legislature. I apologize for the length of this email, but there’s much to report. And as you’ll see, if you want less traffic, dislike toll roads, or think property taxes are too high, you will be – and should be – very disappointed.Paltry Transportation Budget Increase: Let’s start with the appropriations bill. The state budget basically increased funding for the Department of Transportation by about 2 percent – $16.3 billion in 06-07, versus $16.6 billion in 08-09. That, of course, is really a decrease, because it doesn’t begin to keep up with the double-digit inflation that TXDOT has been seeing in recent years.No New Gas Taxes:The gas tax remains the state’s main method of financing transportation projects, though the legislature is making it easier to raise property taxes to pay for roads (which I’ll get to in a minute). The gas tax brings in about $2 billion a year.While there was much talk about raising the gas tax or at least indexing it to inflation, thus reducing the need for toll roads, an increase didn’t make it to the floor in either chamber. Tax bills have to start in the House of Representatives, so I didn’t even have the opportunity to really show my support for this financing mechanism.What did pass the House – overwhelmingly – was a so-called Gas Tax Holiday, which would have removed the tax for three summer months. This moratorium on traffic relief would have cost the state $700 million this year alone. Thankfully, it did not pass the Senate.Keep Diverting Fund 006 (“Fund 6”):Fund 006 is the state’s primary transportation fund. It collects money both from gas taxes and motor vehicle registrations (adding about $1 billion a year). Much of that money is diverted to non-transportation uses, including education and the Department of Public Safety.There had been talk of ending at least some of these diversions, thus freeing up more money for transportation. However, the legislature refused efforts to use other money to fund the Department of Public Safety, while actually diverting 15 percent more money out of the fund and away from transportation projects.Run Up the Credit Card:The Legislature did find some new money for transportation, and you can thank your children for it.The Legislature approved another $6 billion in bonds to pay for transportation projects. However, those bonds would need to be repaid with future gas tax revenues. TXDOT has noted that this is not new transportation money, but is more like a payday loan.And in November, voters will have the chance to allow Texas to issue up to $5 billion in bonds for highway improvements that would be repaid through general revenue. General revenue, of course, pays for everything from children’s health insurance to property tax cuts, priorities the state is having a tough time paying for now. When the state moves money out of children’s health care, education, or other priorities, two things happen: That priority gets starved, or the cost gets passed around until it ends up on your local property tax bill. This might be a very reasonable ballot proposition. But as far as I’m concerned, it also means more uninsured kids, more trips to the emergency room, worse schools, and – most of all, probably – higher property taxes.At the same time, and just so you know, I voted in favor of both of these initiatives. I will continue to fight for things like children’s health coverage and preventative healthcare. But our transportation options are pathetic right now, and we need access to every tool we can get, whether or not we use it.Even Higher Property Taxes:The Legislature did approve a new tool for funding transportation projects: the Transportation Reinvestment Zone. This is a genuinely innovative tool that would capture part of the increased tax revenue from the area around a highway expansion and use it to pay for transportation.But, once again, we’re talking about using property taxes – which everybody already thinks are too high – to pay for transportation, and pulling that money out of parks, public safety, health and human services, and other things that we all think are important.No New Federal Money:Many of you have heard that the federal government is rescinding transportation money it had offered to states, in part to pay for federal budget shortfalls caused by things like the Iraq War. As of February, Texas had lost $594 million in federal money in the previous year and a half.It appears this will get worse before it gets better. The Federal Highway Administration has notified the state there will be more rescissions, and Texas is likely to lose $72 million in the next round.The “Moratorium” Bill:In the end, there was one major bill dealing with transportation financing without raising taxes that survived the session. This was the so-called “moratorium” bill, SB 792. While this was far from a perfect bill, I believe it will dramatically slow the rush to privatize Texas highways, particularly in Central Texas, by giving local tolling agencies the first chance to build a road. It also creates a two-year prohibition forbidding the state from allowing private corporations to build or buy tolled highways.There are a number of exceptions for some regions, but not in Central Texas. Before SB 792 passed, the state had already contracted with a corporation to build and operate the southern part of State Highway 130, stretching from Travis County’s southern border to Interstate 10 outside San Antonio.The bill also looks at our transportation funding crisis in a radically different way, requiring officials to evaluate how much money different road projects could generate before setting out to build them. I have grave reservations about approaching public infrastructure from a profit-making perspective. But at the same time, as I hope you can see, the legislature refused to provide other options.This so-called “market valuation” process would have local tolling agencies work with the state to calculate how much money different road projects could generate. Then the local toll agencies would decide whether they wanted to build the road.However, in Central Texas and other areas with Regional Mobility Authorities, there would be another layer of transparency and accountability – the elected officials on the Metropolitan Planning Organization (CAMPO, in our case) would decide whether to move forward with the market valuation process or not. I have pushed for transparency and accountability in Texas’ toll road-building process since before I was elected. I still believe we need more of each than this provides, but it’s a good start.Conclusions:There’s debate on how big the gap is between the money we have from the sources listed above, and the money we’ll need to pay for our massive transportation challenges. What’s clear is that there is a gap – one measured in the tens of billions of dollars statewide, and it is growing. It costs money to increase capacity and enhance mobility. There are no free road
s. And it will take generations to fill the gap using only the tools we’ve been given, meaning we’ll spend more and more of our lives sitting in traffic, and our children will have to fix the problems we’ll leave them while trying to address their own generation’s challenges.I don’t particularly like toll roads, although I probably don’t have the reflexive aversion to them that some have developed over the last few years. I definitely don’t like to pay tolls on top of the gas tax and property taxes I’m paying already.But I hate traffic. I hate losing time to do what I want to do and be with the people I want to be with. And, even more than that, I fear for our economy, our air quality, and our quality of life if Central Texas becomes a gridlocked mess where every highway is like Interstate 35, every surface street is like Lamar at rush hour, and every neighborhood needs speed bumps because so many drivers are desperate for a short cut.We already have too much traffic. More people are coming. And, unless we start growing differently, they’ll be driving cars, even if those cars run more and more on electricity. But more roads and road capacity are not coming for all of those people and cars – not without more money. And the only possibilities are gas taxes (which the legislature has rejected), property taxes (which are horribly unfair and already too high), toll roads, and innovative growth strategies that give people options besides their cars.We all have a lot of work to do on this issue. But let’s stop pretending we can get something for nothing, and let’s cut the knee-jerk reactions to things like toll roads or land-use planning. We need to be creative, and we need to stop being so dogmatic and political about what we don’t want.We need every option that exists right now. We literally don’t have a choice.Thanks, as always, for your time and your interest.