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Article VII:
Business and Economic Development

Article VII agencies include the Texas Department of Transportation (TxDOT), Texas Department of Economic Development, Texas Workforce Commission, Texas Lottery, Texas Department of Housing and Community Affairs (TDHCA) and the Texas Aerospace Commission, all agencies concerned with various aspects of the state’s economic health. The article includes the state’s second-largest individual expense, highway construction, which cost $3 billion in fiscal 2002.

Total expenditures by Article VII agencies rose from nearly $3.4 billion in fiscal 1990 to $7.2 billion in 2002, an increase of 113.9 percent. In real (1990) dollars, the 2002 total was $5.1 billion, a 51.2 percent increase. Article VII expenditures in 2002 accounted for 13.3 percent of the spending used to calculate the statewide index.

The review team created 25 separate expenditure indices for Article VII agencies, the majority of them using population as a workload measure. Several major spending indices could take advantage of more specific measures; the highway construction expenditure index, for instance, was calculated in terms of cost per daily vehicle miles traveled.

The combined Article VII expenditure index rose to 1.30 during the 1990-2002 period, indicating a 30 percent increase in expenditures per unit served.

The largest individual Article VII indices for 2002 include:

11.68, for the Office of Rural Community Affairs “All Other” (non-grant) expenditures. Total expenditures for this index rose from $188,249 in fiscal 1990 to $3.7 million in 2002, a 1,876 percent increase; real expenditures rose to nearly $2.8 million. Real expenditures per 10,000 Texans increased 1,068 percent over the study period. This agency was created by the 2001 Legislature, consolidating programs formerly run by the Department of Health and TDHCA; the index represents a spending history for these programs as if they had been at the agency throughout the study period. The bulk of the increase in this index was due to growth in spending to promote equitable access to primary medical care. This index accounted for just 0.05 percent of all 2002 Article VII spending.

7.33, for the adult public assistance provided by the Texas Workforce Commission. Real expenditures (in 1990 dollars) for this index rose by 382.1 percent from fiscal 1990 to 2002 (from $14.7 million to $71.2 million), while the average monthly number of client cases fell from 200,886 in 1990 to 132,027 in 2002, a 34.3 percent decline.

6.95, for architectural and engineering services purchased by TXDOT. Total spending for this category rose from $22.3 million in fiscal 1990 to $216.8 million in 2002, an 873.4 percent increase; in real (1990) dollars, the 2002 total was $160.5 million and the rate of growth was 620.9 percent. Lane miles, the workload measure, rose by just 3.7 percent over the study period.

The index with the largest share of 2002 Article VII spending was TxDOT highway construction, with $3 billion or 42.4 percent of the total. Total spending for this index rose by 86.7 percent from a fiscal 1990 total of $1.6 billion; in real (1990) dollars, spending rose by 25.6 percent. Daily vehicle miles traveled in Texas (the workload measure in this instance) rose dramatically over the study period (by 50.6 percent), driving real spending per daily vehicle mile downward by 16.6 percent. The 2002 index was 0.83.