Although Texas voters approved Proposition 1—a constitutional amendment which could provide $1.7 billion to state transportation projects in 2015—on Nov. 4, Texas and the rest of the country have an even more significant long-term transportation funding problem on the horizon: the Highway Trust Fund.

The federal government’s funding source for transportation projects throughout the country, the HTF could run out of money if Congress does not pass new legislation this session.

In addition, decreasing revenue from the federal motor vehicle fuel tax and a growing need for transportation projects means the HTF is facing a projected average $17 billion annual deficit from 2015–23 unless Congress finds a new funding source.

“Texas is home to four of the fastest-growing cities in the U.S.,” said U.S. Rep. Michael McCaul, R-Austin. “As more Americans continue to migrate to Texas, it is important that we continue to develop and maintain our infrastructure in order to accommodate the increasing population. That is why it is crucial that Congress comes together to enact a permanent fund solution that will bring long-term solvency to the Highway Trust Fund.”

Funding problems

The majority of HTF revenue is generated by 18.4 cents taxed for every gallon of gas pumped throughout the country as well as 24.4 cents per gallon of diesel gas. The gasoline tax has not increased since 1993, said Janet Kavinoky, executive director of transportation and infrastructure for the U.S. Chamber of Commerce.

With less gasoline tax revenue being generated, the federal government has had to borrow from the rest of the budget to make up the difference. Since 2008, $64.1 billion has been borrowed to make up the shortfall, she said.

The national recession in 2008 exacerbated the gas tax revenue decline, Kavinoky said.

“When [people] drove less, they also bought less gas, so there were fewer fuel taxes going into the [HTF],” she said. “We didn’t anticipate that, so we had to start making up the difference. People didn’t jump back into driving the way they did before, so we [have been] making up the difference ever since.”

While Congress deals with a long-term problem of fixing federal transportation funding, there is perhaps a more pressing issue of what to do about funding transportation in the next fiscal year.

Kavinoky said Congress passed a bill in July to extend MAP 21—the federal transportation act that has provided states transportation funding since 2013—until May 2015. However, unless Congress acts before then and approves a new bill to fund transportation, the HTF could run out of money.

“We’ve been expecting [Congress] to address the [funding] gap in the Highway Trust Fund for the better part of a decade,” said Ashby Johnson, executive director of the Capital Area Metropolitan Planning Organization, which is responsible for regional transportation planning in Central Texas. “We knew the trust fund was going to go broke. We’ve known since the mid-90s it was headed in this direction.”

Local effect

Roughly one-third of the Texas Department of Transportation’s budget comes from federal funding, TxDOT Public Information Officer David Glessner said. The department’s federal obligation authority, or the authority provided by federal law to make funds available for state agencies to use, has hovered around $3 billion a year since 2009.

Texas is also a donor state, meaning it sends more fuel tax revenue to the federal government than it receives, Johnson said.

“We must also reverse the decades-old trend of Texas paying more into the HTF than it receives,” McCaul said. “I hope that when Congress brings up the HTF this year, it will work to resolve these issues.”

Johnson said CAMPO typically receives about $2 million annually for transportation planning efforts, which is far less than the $6 million he estimates the region needs. CAMPO also receives about $21.8 million annually for the Surface Transportation Program. Johnson said CAMPO may use STP funding for a variety of uses, but it often goes toward construction instead of planning.

“We’re in a high-growth area, and there’s so much change happening so fast that having less money and a choppy stream of funding leads to us not being able to respond to things as quickly as we would like to,” he said.

Had the region been able to access more federal dollars, CAMPO and TxDOT might have been able to address congestion on I-35 sooner, he said. Johnson said Congress used to approve six-year transportation bills, making it easier for planning efforts. Now, he said, Congress will pass two-year bills, and funding is never guaranteed.

“It’s not unusual now to get six or seven continuing resolutions between bills,” Johnson said. “When you get a continuing resolution it’s never 100 percent of the money you would have gotten. It’s usually about 75 to 80 percent of what you usually would have gotten.”

State agencies are preparing for a potential slowdown in transportation projects if Congress does not pass new legislation. Glessner said TxDOT can borrow funds on a short-term basis to cover the operations of the department for several months.

Congress has let the transportation funding program expire for a few days in the past, but it has not been lengthy enough to interrupt construction projects, Glessner said.

For the past 10 years, Johnson said local jurisdictions have taken on federal and state projects instead of waiting for funding that may never come. Hays and Williamson counties have both been aggressive in ponying up local funding and bond money.

“The locals have been shouldering more and more of the burden of what would have been [the state’s responsibility],” he said.

Short-term, long-term solutions

With MAP 21 set to expire in May, Congress will be faced with passing a new transportation funding bill this session and likely could take it up this spring.

“The Highway Trust Fund needs to be funded by thoughtful and long-term policies that execute those needs, not another Band-Aid solution,” said U.S. Rep. John Carter, R-Round Rock. “I’m pleased that the House’s Transportation and Infrastructure Committee is reviewing proposals that would secure the Highway Trust Fund for years to come. I’ll keep the needs of Texas first in mind as Congress crafts policy options in the months ahead.”

Carter said Texas has been smart to not completely rely on HTF revenue. He said Texas voters and the Legislature have both approved numerous proposals to leverage local dollars to maintain and improve the state’s transportation infrastructure.

Johnson said Congress should consider adjusting the gas tax to match inflation and implementing a vehicle miles traveled fee, which would allow the government to capture revenue from electric and more fuel-efficient vehicles.

“I think we spend a lot of time on the roads, but we need to beef up transit funding as well,” he said. “Increasingly in this region if we had a better transit network we could help with some of the congestion on the roads and also encourage economic development just like we do with roads.”

David Glenn, legislative director for state Rep. Marsha Farney, R-Georgetown, said with the increasing demand for roadways, leaders should consider a multimodal solution, which could include passenger rail and additional pedestrian facilities.

“There is not one solution that will cover all the costs,” Glenn said. “We need about $4 billion a year to maintain all of the roads. … As far as a permanent long-term solution, I don’t know if there is just one.”

State Rep. Celia Israel, D-Austin, sits on the House Transportation Committee and said she filed House Bill 594 that would encourage semitrailers to use SH 130 instead of I-35 by adjusting toll rates.

“We can also encourage state agencies to utilize policies allowing work-from-home options, which are common and popular tools utilized in the private sector,” she said.

Israel said funding transportation is just as important as ensuring education and water resources are adequately supported.

Additional reporting by Beth Wade