According to the Texas Transportation Institute, highway use in Texas increased 238 percent over the past four decades.

Reports from the NCTCOG, an association that assists local governments with regional development, say that by 2030 the region will need about $129.5 billion to eliminate the most severe levels of congestion—money for which the region does not currently have funding sources.

To help bridge the funding gap for transportation projects, statewide, Texas voters approved Proposition 1 in 2014 and Proposition 7 in 2015, both of which add money to the State Highway Fund.

Prior to the passage of the propositions, the state received funding for transportation through state and federal gas taxes, motor vehicle registration fees and federal reimbursements.

The state Legislature has not increased the gas tax since 1991, which is why, according to transportation officials, the propositions are so important.

While not expected to solve the state’s transportation funding shortfall, both measures are expected to help the issue.

However, with the funds from propositions 1 and 7 depending on the state’s overall economy and the oil and gas industry, which has taken a downturn, the impact to the SHF may be less than some officials hoped.

Funding the propositions

In fiscal year 2015, Proposition 1 contributed $1.7 billion to the SHF to be used by TxDOT. [polldaddy poll="9414618"]

Proposition 7, although funded by the general sales tax revenue and car sales tax revenue rather than the oil and gas tax revenue, is still expected to suffer from the effects of the energy industry downtown.

Funds for Proposition 7 will not begin to be collected until 2017 and will not be deposited into the SHF until 2018.

Beginning in 2019, a portion of the car sales and rental tax revenue will also be directed to the SHF as part of Proposition 7.

After the first $5 billion in annual tax revenue is collected, 35 percent of all additional car sales and rental tax revenue would go to the SHF.

That 35 percent is expected to translate to roughly $500 million to $600 million for TxDOT in 2020, according to TxDOT estimates.

Future of oil prices

With both propositions having the potential to add billions to the SHF, transportation officials said they are hoping the oil industry bounces back.

Ed Ireland, associate professor of energy and economics at Texas Christian University, said oil prices will never be $100 a barrel again, but prices will eventually increase. 

“I think, and the analysts agree, that the recovery of the price isn’t going to happen anytime real soon,” he said. “It’s going to be a slow process most likely. I think it is projected by the end of the year we will be up to $40 a barrel. I know people are wondering when are we going to get back up to $100 barrel, and my answer to that is we are not.”

Ireland said this is because of the discovery of the Barnett Shale formation in North Texas, which some experts say is the largest onshore natural gas field in the United States.

“There has been a permanent change in the supply of oil and natural gas, and that’s from the shale energy revolution,” he said. “There’s just a huge new supply of oil and gas in the world, and it’s going to be there for hundreds of years. I think we are looking at a range of $50-$70 as to what [the cost of oil per barrel] might recover to.”

Morris said although oil prices will never be as high as they once were, the Texas comptroller is projecting both propositions will still yield money.

“As of [early April] he expects that the state will meet the minimum threshold [of Proposition 1] that is required to receive money,” Morris said. “And in 2018 we should see the first installments of Proposition 7. But we are in 2016, so we have a little bit of a ways to go before we know if that is going to happen or not.”

A continuing problem

Heading into the 2013 legislative session, officials with TxDOT said maintaining Texas roadways at current congestion levels would require an additional $5 billion in funding annually.

The biggest chunk of TxDOT’s $23 billion budget for the 2016-17 biennium—39 percent, or roughly $9 billion—has been set aside for maintaining and replacing the existing system. That does not include projects to alleviate any roadway congestion.

Morris said the region is growing at a million people per decade, and that will continue, which is why funding for increased roadway capacity, not only maintenance, is greatly needed.

Because of the current shortage in the SHF, most roadway-expansion projects are currently dependent on toll revenue, Morris said.

“If we weren’t using tolls, we wouldn’t be expanding any transportation project,” he said.