The Texas Legislature finally dealt with the problem of highway funding — sort of. Strong population and economic growth have increased traffic on the state’s highways, but funding has not risen accordingly and the system is severely strained. Despite much debate through the regular session and a trio of special sessions, the final deal punts the issue to voters and doesn’t really solve the problem in any case.
Texas’ population has been expanding faster than most areas due to (1) a relatively high fertility rate (and, thus, rate of natural population increase) and (2) a growing economy attracting people in from elsewhere. The number of Texans more than doubled from 1970 to 2010 (to 25.1 million) and is now approaching 27 million. Depending on the assumed rate of people moving into the state, by 2050, this number could well double again.
Texas added more new residents than any other state over the past 10 years, with growth concentrated in urban areas. Congestion has grown apace, both in the largest metropolitan areas and in smaller ones.
It’s not just an urban problem, of course. The Texas Department of Transportation maintains more than 80,000 miles of highways, and 480 million miles are driven on these roads every day.
In an ideal world, as traffic growth generates a need for highway construction, the funds for expansion also need to be generated. This is not the case in Texas, where revenues are dwindling even as needs rise. The state’s portion of the gasoline tax, the major funding source, is $0.20 per gallon. The rate hasn’t changed since 1991, and more fuel efficient vehicles mean more miles can be driven with less tax paid.
A number of potential new revenue sources were considered by legislators such as increasing fees for various licenses and permits or earmarking vehicle sales taxes. None of these options passed, even though some had very nice properties of letting those who use the roads pay more for their construction and maintenance. Instead, legislators passed a proposed constitutional amendment that diverts some oil and gas revenue from the Rainy Day fund to the state highway fund. In November 2014, voters will get to decide.
While I’m glad that something was put together, it’s not enough. The extra funds are estimated to add up to about $1 billion per year, while transportation experts put the funds needed at $4 or $5 billion per year. Moreover, it’s shifting finite funds from one account to another.
A real solution is essential to long-term prosperity; revenue generated must be linked to funds needed. Our latest forecasts indicate that by 2040, there will be about 15 million more Texans than there are today and that the economy will have more than doubled. Obviously, our highways will not be up to that level of traffic without a consistent program of maintenance and expansion.
Dr. M. RAY PERRYMAN is founder and president of The Perryman Group, an economic and financial analysis firm in Waco.