$ 2 Billion Not Part of a Sustainable Solution

March 18, 2012


You may have heard that TxDOT has identified a $2 billion “windfall” in state transportation funds and that communities across Texas are lining up to get their share.

The sudden availability of such a big pot of funding sounds great in a state that is barely able to maintain existing roads and does not have the money for badly needed new highway capacity.


TxDOT is quick to make the point that these are one time funds – not a long-term solution.  The $2 billion will give TxDOT a chance to accelerate some of the state’s critically needed projects.  After this funding is allocated Texas will still be without adequate sustainable, long-term funding sources needed to deal with population growth and replacement of aging infrastructure.


The projected $2 billion comes from three sources. 


The first is $750 million is federal funds that are likely to flow to TxDOT this year because Congress has been funding transportation through continuing resolutions that actually distribute more to states than is coming in through the federal fuels tax.  TxDOT had conservatively budgeted to get only the amount it would have received under the formula for fuels tax distribution.  TxDOT now projects federal funding will be one-third higher.


TxDOT has determined that it can issue an additional $600 million in debt this year from the Texas Mobility Fund which is long-term borrowing that is paid off year by year from four vehicle-related sate fees.  A total of $6.3 million has been borrowed under this program over the past six years.  About 3 percent is retired each year, providing an opportunity to refinance some of the debt and sell $600 million in new bonds.



The final $650 million is available because bids on construction projects and other purchases have been coming in at well below budgeted amounts.  Previously TxDOT has allocated these savings only after a project was completed.  TxDOT recently changed this approach and is more proactively deciding whether projects will need the full amount allocated to them, more quickly freeing money to be applied to other projects.


The result is that TxDOT districts around the state will be able to add some projects to their letting schedule sooner than they otherwise would.


TxDOT announced that a primarily formula based allocation process will be used to distribute these funds so that TxDOT can collectively determine what projects to advance. Additionally, there will be a clear and understandable process for using this funding where it is most needed to accelerate projects. Funds to be spent will be measured against ways to address congestion, safety, maintenance, and connectivity.


Metropolitan area officials have speculated in media reports that major projects that might be accelerated by the funding could include I-35 West in Tarrant County, I-35 East in Denton and Dallas counties, US 281 in Bexar County, I-35 in Travis County, US 59 in Montgomery County, and SH 249 and I-45 South in Harris County.