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 a significant long-term transportation funding problem on the horizon: the Highway Trust Fund.
The federal governments funding source for transportation projects, 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 $17 billion average 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 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 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." —Ashby Johnson, executive director of the Capital Area Metropolitan Planning Organization
"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 Transportations budget comes from federal funding, TxDOT Public Information Officer David Glessner said. The departments 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.
