TxDOT claims its out of money for new lanes/roads – how 'bout they stop using their $ for ads!

Within three years, nearly all of the state’s construction budget will be spent on maintenance and to pay debt incurred in building existing roads, top officials of the Texas Department of Transportation said.

“The people of Texas need to understand that within a very short period of time, there will be no money for mobility projects,” said Texas Transportation Commission member Ned Holmes of Houston.

The impact will be less severe in North Texas, where local officials are counting on more than $3 billion in upfront payments from the North Texas Tollway Authority as part of its deal to build the State Highway 121 toll road.

But even some of that money now will probably have to cover projects that had been envisioned as state-financed projects. Throughout Texas, funds for new roads will begin drying up almost immediately, officials said.

Meanwhile, spending on maintenance – especially in Dallas, where the roads are in the state’s worst shape – will be increased. State projects already under contract will not be affected.

The inability to build new roads, or to widen existing ones, comes even as experts are warning that Texas’ soaring population and booming economy have made traffic in its leading cities among the worst in the U.S. A national study released last week warned that traffic jams in Dallas grew faster over the past 25 years than in any other city in the country.

“People and businesses are moving here because we’re a low-tax, low-regulation and low-welfare state – and that is not going to change,” commission chairman Ric Williamson said. “They are going to need roads and highways to be able to get around.”

Trouble is, Texas just can’t afford to build them anymore, he said.

During the next 60 days, local officials will be asked to scale back requests for state funds, said Amadeo Saenz, who was named TxDOT’s new executive director late Thursday.

“This will cause delays, and some projects will be canceled,” Mr. Saenz said.

Mr. Williamson says many factors are to blame for his department’s inability to keep up with the demand for new roads.

Federal funds are increasingly scarce, and highway construction costs have soared 62 percent in the past five years, he said. Meanwhile, the state’s aging roads are increasingly in need of repair.

“We don’t want to see a Minnesota bridge collapse in Texas. In order to avoid that, we are going to have to take care of the assets we have,” Mr. Williamson said.

But commissioners saved their harshest criticism for decisions by the Texas Legislature.

They said lawmakers spend the state gas-tax revenues on too many other needs, including more than $1 billion for the state police alone.

But commissioners said the Legislature’s moratorium last session on private-investments in toll projects has hurt the most.

The decision cost the state billions of dollars in annual construction funds, said Mr. Williamson, who like the other commissioners was appointed by Gov. Rick Perry.

Mr. Williamson said Mr. Perry asked the commission to find a way to pay for the state’s growing transportation needs. Convincing private companies to pay money up front to operate toll concessions was that solution, he said.

Lawmakers need no lecture on the severity of the state’s transportation needs, suggested Steven Polunsky, a top aide to Sen. John Carona, R-Dallas, chairman of the Senate Transportation and Homeland Security Committee.

“We agree absolutely that there is a financial crisis,” Mr. Polunksy said. “And Senator Carona will support next session a multi-pronged approach to solve it.”

He wants to raise the gas tax and stop the diversion of revenues to pay for other needs, Mr. Polunsky said.

But the private investment deals favored by the commission were too lopsided, he said, noting that some proposed leases would have kept the toll roads in private control for 75 years or longer.

“The price that came with those private financing deals was too steep,” Mr. Polunsky said. “Lawmakers found the terms unacceptable, both politically and from a business standpoint.”

Mr. Williamson said efforts to raise the gas tax are misplaced. The tax is inefficient because lawmakers divert too much of it to other needs, and he said it is too regressive, since poor people pay the same rate as rich ones.

He did say he would probably support efforts to index the rate to inflation, if only because inflation is making it increasingly difficult for the department to simply maintain the roads it already has.

The legislative moratorium nearly killed Dallas’ transportation agenda, said Michael Morris, transportation director for the North Central Texas Council of Governments.

“We took a lot of criticism back in the spring for working to make sure our projects were not going to be affected by the legislature’s moratorium,” Mr. Morris said. “But if we hadn’t succeeded in that, we would be dead in the water, just like the rest of Texas is going to be.”

NTTA is not a private company, but it modeled its offer to pay $3.3 billion in return for operating the toll concessions on SH121 on the private companies’ proposals. Without the latter, NTTA’s deal would never have been so aggressive, Mr. Morris said.

When state funds begin drying up over the next couple of years, it will be the NTTA’s money, he said, that keeps construction projects moving forward in the Dallas area.

Even that money, however, will run out over several years – and by then, if the state or federal governments haven’t found new ways to pay for projects, North Texas will suffer like the rest of the state, Mr. Morris said.

Some short-term relief could come as soon as next month, when Texas voters have a chance to approve a constitutional amendment that would authorize TxDOT to borrow up to $5 billion in one-time construction money.

That issue is on the Nov. 6 ballot. But even if it passes, the money would only be a one-time infusion, warned James Bass, the department’s chief financial officer. TxDOT has estimated the state has an $86 billion gap between construction needs and available funding. The $5 billion would help – but would also increase the state’s annual debt payments for decades to come.

Instead, Mr. Morris said, the state needs real solutions – and that means new revenue. “We’re just shuffling the deck chairs around on the Titanic,” he said.