It’s been a while since we’ve written about road/highway funding in Texas but suffice it to say that EOW has wasted a lot o bits and bytes on the issue. Today there is an interesting article on the subject in the FWST, Texas Transportation Department going into debt to pay for road work.
Texans are increasingly borrowing from their children to pay for the roads they are using today.
Unable to persuade lawmakers to raise gas taxes or vehicle registration fees, the Texas Department of Transportation is going deep into debt to build roads and keep up with the state’s explosive growth.
Since 2001, legislators and voters statewide have allowed the department to use a variety of new tools to speed up road work. That eased traffic congestion in the short term — but now nearly $1 billion of the agency’s roughly $8 billion annual budget goes to debt service.
It wasn’t always that way. Traditionally, roads weren’t built until the state had cash in hand. But many long-awaited projects were delayed because of chronic funding shortages.
“We’ve advanced as much as we can with the ability to borrow funds,” Transportation Department spokeswoman Jodi Hodges said. “Now we’re having to pay it back with interest.”
Texas has borrowed $11.9 billion, which will cost $21.1 billion including interest and other fees, to pay back over 30 years, said state Rep. Joe Pickett, D-El Paso.
Some of the money repays debt from bond sales. Some goes to reimburse cities and counties, which use property tax-backed bonds to build roads.
“At the end of the day, there’s not going to be any new money,” Pickett said. “So we’re leaving it up to the communities to handle this crisis.”
Some of the money is paired with private equity from private developers: the North Tarrant Express project on Loop 820 and Texas 121/183 in Northeast Tarrant County, for example. The developers bring in their own funds to a project in exchange for control of the roads and toll collection for 52 years.
Though some Texas leaders criticize the federal government for engaging in expensive programs that mortgage the nation’s future, the state is arguably doing something similar by increasingly relying upon alternative financing options such as debt and public-private partnerships that commit public resources for decades.
Even so, supporters of the approach say building the roads now — even if Texas can’t put cash on the barrelhead — is a worthwhile investment.
There are a few things that must be corrected about the narrative, or frame, of this article. It’s not TxDOT’s job to persuade the state elected leaders to raise taxes or fees to pay for roads. The transportation commissioners in Texas are appointed by the governor. Making those who run TxDOT for the last, oh say 17 years, beholden to GOP governor’s. Who have been against raising any tax, no matter the need.
Texas has never been a “liberal” state even when it was run by the Democrats. And the legislature, despite only being taken over by the GOP in 2003, had been dominated by “conservative” Democrats and GOP legislators for much longer than that. The gas tax in this state has not been raised for 20 years, while the cost of everything related to building and maintaining roads has gone up. It should not surprise anyone then that the only way Texas can now afford to build roads it to borrow money (financed by large banks), or sell/lease our precious resources to corporations.
With that as the frame it’s easy to understand why we’ve gotten to this point. The thirty-year destruction of working and middle class in our state and country is finally coming to it’s apex. If we do not have a fair tax system in Texas these types of rigged market, disguised as free market, schemes are all we are left with. This kind of scheme will now be tried with public education, health care, etc.. in Texas. Unless we make our elected leaders change course.