Why Fund Transportation in Texas?

As the 82nd Legislature approaches, most of the policy discussion at the Capitol centers on the state’s budget deficit. Recently, House Appropriations Chairman Jim Pitts estimated the budget shortfall at $18 billion.

With transportation revenue from the Motor Fuels Tax dwindling as cars become more efficient, and with essential services increasingly seen as a priority for general revenue, meeting Texans’ transportation needs promises to be a difficult task.

According to Texas Department of Transportation estimates, the state transportation budget barely has enough funding to keep up with maintenance and operations costs.  So, unless the Motor Fuels Tax is increased, or policymakers find a way to agree on alternative revenue sources, Texas will not have the funds to build any new, non-toll roads in the foreseeable future.

Transportation advocates have been trying to raise awareness about the importance of funding transportation in Texas. It has become clear, however, that many policymakers and the general public do not appreciate the severity of the problem, don’t understand the reasons for the shortfall, and/or do not comprehend why transportation infrastructure faces a crisis if solutions are not quickly found.

Much of the need is due to increasing population. According to the state demographer, Texas will grow at twice the U.S. rate between now and 2030, adding between 7 million and 17 million people. That means we must be prepared for a population increase that is greater than the population of the five largest Texas cities combined. We must be prepared to deal with the resulting traffic congestion.

By 2020, passenger traffic is expected to increase by 30 percent, with large truck traffic increasing by 40 percent.  According to TxDOT, a fully loaded truck damages the roadway more than 10,000 times more than a regular passenger vehicle, meaning the state must anticipate the additional roadway maintenance costs associated with the additional large truck traffic.

These factors create the obvious cost increases. According to the “2030 Report” commissioned by the Texas Transportation Commission, a 12-member board appointed by Governor Rick Perry, the State should invest $315 billion in transportation, for routine road and bridge maintenance, greater urban and rural mobility, congestion reduction, safety and connectivity between now and 2030.

There are hidden costs, as well as the priorities outlined in the 2030 Report. That’s why, as Vice-Chair of the House Select Committee on Transportation Funding, I have asked the Texas Transportation Institute to perform its own study, on the costs of doing nothing to solve our transportation needs. I expect this study will quantify the effects of maintaining the status quo in three categories: the Texas economy, the Texas business climate, and the effect on Texas households. As part of the study, the Texas Transportation Institute will estimate such things as job losses, business relocations, business supply-chain cost increases due to congestion and road deterioration, and increased costs of goods to Texas consumers. The report will be completed in August and presented to legislators to help us better understand and educate our constituents about the true costs to all Texans if our transportation funding needs are not addressed.

Some transportation advocates have suggested as a solution replacing the Motor Fuels Tax with a “Vehicle Miles Traveled” fee – called a VMT.  Such a tax would produce a more reliable, less volatile funding stream for transportation. However, a VMT fee would be controversial. It would also be complicated to implement, potentially requiring the installation of chips in passenger vehicles. Additionally, the Legislature would have to find a way to collect the fee other than requiring drivers to pay a large lump sum annually when they register their vehicles.

Regardless of the possibilities and challenges of a VMT fee, there is no doubt that we must consider this and other potential solutions very soon. It’s my hope that despite the budget shortfall and other key issues that will be addressed next session, lawmakers will take a closer look at our transportation challenges and begin to develop concrete, bipartisan strategies for solutions.