Texas is one of only two states to have two cities listed among the 10 most congested in the country. Dallas is the fifth-most-congested city in the nation, while Houston is eighth. Additionally, the stretch of Interstate 35 that runs through Austin is consistently ranked among the most congested highways in the nation. According to one estimate, the cost of congestion in Dallas, Houston and Austin will have grown to more than $60 billion per year by 2026 in terms of lost productivity and fuel costs.
So what explains these levels of congestion?
Put simply, Texas is the fastest-growing state. The latest projections from the Texas Data Center Services program indicate that Texas’ population will almost double to 55 million by 2050, assuming that net migration remains at similar levels to those seen over the previous 10 years.
Responding to these concerns, the Texas Legislature sent Prop 1 (2013) and Prop 7 (2015) to voters. These constitutional amendments—which devote state sales tax and motor vehicle sales tax revenues to transportation projects — resulted in $5 billion additional funding for that purpose in the current state budget.
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The Legislature should be applauded for taking these steps, but it still is not all the state needs to meet the growing demands on its infrastructure. The Texas Department of Transportation details $108 billion worth of projects that are either planned or ongoing, which underscores the extent of the investment that Texas needs to continue to make in its transportation infrastructure.
Recent data from the comptroller show that revenue from the gas tax continues to grow slowly, due in large part to improved fuel efficiency. So the extent to which the gas tax can be relied upon to provide increased levels of transportation funding will be limited. This should not, however, be used as an argument for raising the tax. Higher gasoline taxes would increase the cost of all goods transported on Texas highways and reduce Texans’ disposable income, both of which are factors correlated negatively with economic growth.
Alongside the gas tax and the new revenue dedicated to transportation projects since 2013, Texas has been using public-private partnerships to help finance infrastructure projects for several years. The benefits to the state from these projects are significant. For the LBJ-635 project, for example, the state contributed $490 million but ultimately received a $2.6 billion investment in new road capacity for one of the most congested areas of the DFW metroplex. Driver satisfaction for the completed LBJ project exceeds 75 percent.
However, opposition to tolls has prompted TxDOT to turn away from this delivery method at a time when other states are actively seeking more private investment. In 2016, Virginia approved a $2.5 billion Interstate 66 public-private project requiring no state investment. Just last year, Maryland’s governor announced that he plans to authorize $9 billion in public-private transportation projects. Moreover, President Trump’s infrastructure proposal will depend on leverage of state, local and private funds.
This topic was the subject of the Texas Conservative Coalition Research Institute’s recent (February 6) Transportation Policy Summit. Senate Business & Commerce Committee Chairman Kelly Hancock, R-North Richland Hills, and House Transportation Committee Chairman Geanie Morrison, R-Victoria, joined a panel of transportation policy experts. One with which most of the panelists agreed was that Texas has transportation infrastructure needs that cannot be met through existing revenue streams alone.
This is more important than ever. The Legislature has already taken the necessary step of dedicating additional tax revenue to the help solve the problem, but critical to reducing congestion in Texas’s biggest cities and busiest highways is using all of the financing options available. Texas must remain open to private investment in its transportation infrastructure and should continue to use private financing where it makes sense for the state, drivers and private investors.
Aldred is Director of Policy & Research at the Texas Conservative Coalition Research Institute (TCCRI), based in Austin. TCCRI’s recent policy white paper “Transportation Infrastructure: Meeting Texas’ Need for Continued Investment” is available at txccri.org.