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Mobility for the new millennium

On the Road Again

Texas boasts almost 79,300 miles of state-maintained highways--more than any other state. But after decades of increasing population, border trade, tourism and urban sprawl, the state's road networks are aging and overextended, and maintenance costs are rising.

In November 2001, Texas voters approved a proposal--Proposition 15--that amended the state constitution and created a new way to finance the construction of state highways, public toll roads and other public transportation projects. It's called the Texas Mobility Fund (TMF).

Pay as you go
For decades, Texas built its state roads on a "pay-as-you-go" basis. The state constitution prohibited borrowing money to build roads, though the state could fund most other major state capital projects--such as prison and state office building construction and the purchase of mainframe computers--by issuing bonds and short-term notes. Furthermore, cities and counties are allowed to finance local street and road projects with bonds and often do so.

Texas law dedicates a major portion of motor fuels taxes to State Highway Fund 0006 (Fund 6) for building roads. Money in Fund 6 may be appropriated only for specific highway-related purposes, though, including the operations of the Department of Public Safety. Sources of income for the fund are motor vehicle registration fees, sales tax on lubricants, title fees and federal reimbursements from various sources.

"Pay as you go" worked well for many years, when a larger percentage of the state's budget was spent on transportation projects. According to the Keep Texas Moving Campaign, a group that supports new funding sources for Texas roadway construction and maintenance, in the 1960s, a third of state expenditures was spent on roads.

In the 2002-03 biennium, the funds available for highway construction amount to 5.2 percent of the total state budget.

Construction backlog
The Texas Department of Transportation (TxDOT) spent more than $3 billion on highway design, research and construction, and more than $1 billion on highway maintenance in fiscal 2001.

Nevertheless, under current highway construction funding provisions, the Texas Department of Transportation (TxDOT) can take on only about 36 percent of needed highway construction projects each year. A 2001 report by The Perryman Group contends that this building backlog contributes to pollution and congestion in metropolitan areas and threatens the economic viability of many rural areas.

Keep Texas Moving expects a 45 to 50 percent increase in congestion over the next 15 to 20 years to increase pollution.

"Traffic congestion is a huge factor in air pollution," says Elizabeth Christian, a spokesperson for Keep Texas Moving. "An automobile moving down the highway is an efficient machine; a vehicle sitting in traffic contributes heavily to particulate air pollution."

More funding
The Texas Mobility Fund and the ability to borrow money will work together to supplement federal and state highway revenue. When the state wants to fund a transportation project, the Texas Transportation Commission will approve a bond for that purpose, and the state will pay back the loan using money in the Texas Mobility Fund.

Proponents say the fund not only will provide new resources to build better roads at a much faster pace, but it will provide a way to better manage the funds it already has.

Opponents say paying the debt service--the principal and interest that a borrower must pay on a loan--and other costs associated with borrowing money and issuing bonds would make highways more expensive in the long run and amounts to little more than just reallocating current funds.

Before a bond can be issued, the TMF must contain 110 percent of the money necessary to pay debt service on the loan. Since the TMF has not yet received appropriations, no bonds can be issued. To begin issuing bonds for state roads, future Legislatures must dedicate revenue to the fund.

Robert Jones