The 205-foot vertical clearance Corpus Christi ship channel Harbor Bridge replacement is likely to look something like the Hartman Bridge at Baytown shown here.





Total state motor fuels tax revenues since 1993 have delivered declining construction project buying power.



Fleets of crude oil tankers like this one are filling the highways of South Texas as part of the development of the Eagle Ford Shale.



New managed lanes on a 9-mile section of the Border Highway in El Paso just prior to opening in January 2014 - (El Paso Times photo).



Tolled managed lanes will be added to the North MoPac freeway (Loop 1) in Austin.

Statesman's Wear Explores Shift to Local Funding


January 20, 2014


The trend has been coming down the highway at a slow steady pace for the past 10 years -- local communities are having to pick up the tab for more of the cost of state highways.


In North Texas the Regional Transportation Council put together an initiative in 2007 that raised $3.2 billion selling the rights to toll SH 121. The RTC used these funds to expedite about 200 transportation projects in the DFW Metroplex.


Then there was "pass-through" financing that allowed local communities to fund up front cost to build a state highway project and then be reimbursed a portion of the cost over time by TxDOT.


Other regions have formed Regional Mobility Authorities and have funded their projects in part with local revenues. "Expedite" has been the key word in these initiatives with TxDOT officials making it clear that many needed projects could not happen for decades based solely on existing funding sources and formulas.


In Corpus Christi the city, two countes and the port authority have pledged $100 million in local funding and right of way to expedite replacement of the aging Harbor Bridge.


This trend is now getting statewide attention. Austin American-Statesman transportation writer Ben Wear has taken up the theme in a recent piece.


He calls the process "a devolution" with funding responsibility tending to flow down to the local level. Here is Wear's take on how we got to this situation:


"The subject is highway money, both the raising it and spending it sides, and which level of government shoulders the burden. In the past, the bulk of money for building and maintaining highways has come from the federal and state levels, courtesy mostly of the gas taxes that each of those levies and collects. Smaller rural roads and local streets, meanwhile, were the responsibility of county and city governments and were paid for primarily with property and sales tax revenue.
But this structure, in place for the past century, is crumbling.

"To see why, look at what has happened with Texas motor fuels tax revenue since the last time the Legislature raised the tax rate in 1991. The state tax rate on gasoline that year went from 15 cents a gallon to 20 cents a gallon, where it has since remained.

"In fiscal 1992, the first full year with the higher rate, Texas collected $1.953 billion in motor fuels taxes. In fiscal 2012, $3.169 billion came in. That’s an increase of 62.3 percent over 20 years. Texas’ population over that same period went from 17.8 million to 26.1 million residents, a 47 percent increase. So, yay, the gas tax stayed ahead, right?

"No, it didn’t. Adjusted for inflation — which really matters, because we’re talking about the cost of building things — gas tax revenue in 1992 dollars has remained basically flat, going from that $1.953 billion to $1.937 billion in 2012.

"So, half again more people and no extra money — in real terms — for roads. And it’s gotten even worse since 2000. Population growth, at 24.5 percent, has outpaced gas tax revenue growth, about 18 percent, and that’s not even accounting for inflation.

"The same thing has been going on with revenue from the federal gas tax of 18.4 cents a gallon, which hasn’t been raised since 1993. Congress has been propping up the levy’s sagging revenue for the past several years with general fund revenue. Reports out of Washington indicate that subsidy might ebb or end with the next big transportation bill.

"The state Legislature and the Texas Department of Transportation compensated for this ugly situation over the past decade by finding multiple ways to finance new roads with debt. But that led to about $30 billion in new state debt. By last spring’s legislative session, lawmakers’ appetite for that strategy has disappeared."



Wear says that in simple terms what is happening is that lawmakers who fear "raising taxes" are pushing more of the transportation funding burden down to local governments. Here's more:


"In 2007, the Legislature allowed the creation of local “transportation reinvestment zones.” In such a zone, which a city or county can designate alongside a proposed road or rail project, all or part of the future growth in property taxes would be dedicated to transportation spending. Several have been created since then in the Rio Grande Valley and El Paso. Hays County and the city of San Marcos did so this year, as well. More are on the way.

"A couple of sessions ago, the Legislature passed bills allowing Cameron and Hidalgo counties in the Valley to add $10 to the annual car registration fee and use it for local transportation projects. Then in last year’s session, bills to do the same in Webb County (home to Laredo), El Paso County and Bexar County passed.


"TxDOT officials in recent weeks pledged to match five years of receipts from that added fee in San Antonio, about $70 million, as part of an $850 million package of highway projects. San Antonio, however, had to agree to take over maintenance of 21 miles of what are currently state highways within the city, pushing future costs from TxDOT to the locals.

"Some transportation experts I talked to said that Bexar County bill was especially significant, given that it brought one of the state’s signature urban areas into the mix. They speculate that next session Austin, Dallas-Fort Worth and Houston legislators might carry similar bills, especially given that TxDOT matching money for San Antonio."



Wear goes on to write about the possibility that all of the state's largest cities may decide to seek authority from the Legislature to collect the extra $10 registration fee to help repair roads and partner with the state on highway projects. Here's more of his report:


"Meanwhile, the Legislature last session passed another bill allowing the formation of “county energy transportation reinvestment zones,” which would work pretty much like the taxing districts allowed by the 2007 law. The distinction was that the money, for now, could only be spent on county roads, not the state highway system.

"But the law stipulated that forming such zones was a necessary step to be eligible for part of $225 million the Legislature set aside to repair county roads damaged by heavy oil and gas trucks. TxDOT then wrote rules setting a Feb. 14 deadline for counties to create such zones and apply for part of the $225 million. The result has been a scramble across the state to form those zones (although TxDOT likely will move the deadline back a month). I was told that more than half of the state’s counties likely will do so.

"So, all of a sudden there will be zones all over Texas to redirect local property taxes to roads. A future Legislature could easily expand that from county roads to state highways.

"Beyond all that, the toll road push has continued and now has taken the form of so-called “managed lanes.” These are new tolled lanes that would sit alongside existing free lanes on expressways, such as what is about to be built on North MoPac Boulevard (Loop 1). TxDOT and local transportation officials are looking at adding toll lanes on South MoPac as well, along with U.S. 183 North and Interstate 35 throughout Central Texas.

"And there are plans in various stages of development for four other tollways here. The revenue from all those tolls, after expenses and debt are paid, becomes a local kitty for future transportation projects."



Wear is talking about a scenario that is playing out in El Paso, Dallas, Fort Worth, Houston, Austin, and San Antonio -- places where congestion levels make some projects toll viable.

Transportation Commission Chairman Ted Houghton has been making the point that local governments are going to have to step up with some funding to get projects "across the goal line." Much of the need is local and the process of shifting some of the burden for generating highway funds at the local level looks like a lot like a truck rolling down hill.