Tough Choices Ahead

TxDOT Struggles With Funding Issues

By Mary Lou Jay

TxDOT is well known for the Dallas High Five, a five-level interchange at U.S. 75/IH-635, completed in late 2006. (Photo courtesy of TxDOT.)

The year 2008 promises to be a difficult one for the Texas Department of Transportation. Despite an increasing need for infrastructure repair and maintenance and for construction and improvement of roads to alleviate congestion, TxDOT will have a significantly smaller road project budget in this fiscal year. Lack of funding also has caused it to put plans to relocate some railroads on hold, although money for general aviation projects will remain about the same as in previous years.

Road construction and preservation is the largest and most visible of TxDOT’s responsibilities and the outlook there is not encouraging. “In 2007 to 2008, our lettings will probably be somewhere in the $4 billion range, and could go down as low as $3.6 billion,” says Thomas Bohuslav, director of TxDOT’s construction division.  “Previously we had been letting up to about $5.2 billion dollars.”

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The decline is due partly to the fact that TxDOT has already spent money from the Texas Mobility Fund and the Safety Bond program. Another factor is federal government recissions, or take-backs of previously promised highway funds. They have amounted to $666 million so far in FY 2008, with another $259 million expected this year and $600 million more in FY 2009. 

While TxDOT’s funding is going down, its costs are rising exponentially. “Like all states, we’ve had significant increases in the cost of work,” Bohuslav says. “From 2002 to 2007, our highway cost index went up 62%. That has had a huge impact on our ability to build facilities.” Although the income from diesel fuel tax is rising, the increased income doesn’t cover the damage that trucks cause to the pavement.

Public/private partnerships on hold TxDOT had planned to use public/private partnerships, or comprehensive development agreements, to cover some of the funding gaps in new road construction. But late last spring, the legislature barred TxDOT from starting additional CDA projects for two years. Projects already under way, including SH 161 and IH-635 in the Dallas/Fort Worth area, the 1604 loop in San Antonio, and the Dallas/Fort Worth connector (funnel) project, are exempt from the ban, and work will proceed on those roads this year.

State Highway 130 and State Highway 45 interchange north of Austin. The two toll roads make up part of the Central Texas Turnpike Project in the Austin area. (Photo courtesy of TxDOT.)

But TxDOT is not prohibited from working with local transportation authorities to build toll roads. “The building of a toll road is another tool in our tool box, another funding procurement methodology that we can use to address needed transportation projects,” says Amadeo Saenz, TxDOT’s executive director. In the coming year, for example, TxDOT will be working with the North Texas Transportation Authority on plans for the SH 121 toll road in Collin County.

“We’re also doing something called pass-through tolls, or, as some people call them, shadow tolls,” Bohuslav adds. Despite their name, these projects are not toll-funded. “This is where a local entity may come forward and propose to build a project. They’ll finance it, but we pay them back based on traffic volumes for the facility.  We’ve done several of those, one in Montgomery County, one in El Paso, and we have other agreements being executed right now in the Sherman area and in the Williamson County area.”

Juggling priorities and funds Until more funding becomes available, TxDOT has made a decision to concentrate on maintaining the infrastructure it already has. Last October it asked the Texas Transportation Commission to approve the transfer of $800 million from mobility funds into preservation funding. “If you fail to maintain the condition of your pavements, you will pay a whole lot more maybe six times as much to rehab them as opposed to preserving them. It’s much more cost effective to spend money on preservation,” Bohuslav says.

This will have a significant impact on new construction and highway improvement projects. TxDOT will work with local entities such as the metropolitan planning organizations to decide which projects will move forward and which will be delayed.

TxDOT will also be scaling back some planned projects to reduce costs. Whereas in the past, it might have converted a crowded two-lane road to a divided four-lane highway to accommodate future growth, it might now decide on a “super two” highway instead, adding only a center climbing/passing lane. “It’s a much cheaper facility to design and build, and if we ever need the divided four lane some day we could go out and build it because we would preserve the right of way,” Bohuslav says. This change is being discussed for the U.S. 59 project near Laredo.

Projects in progress and being let Despite the funding concerns, work will proceed on many projects. TxDOT should soon be finishing up SH 130 in Austin, the SH 45, Loop 1 in central Texas and the last work on the Katy Freeway, as well as sections of IH-10 on the west side of Houston. 

TxDOT has also put up a tentative schedule of project letting for the year on its Web site (www.dot.state.tx.us/business/schedule.htm).

The largest new projects currently planned through August include:

• A $181 million project to construct an interchange along IH 30 in Dallas;
• an $86 million upgrade of a section of U.S. 79 in Austin;
• construction of two lane frontage roads for SH 332 in Houston, a project worth $84.6 million;
• a $75 .3 million reconstruction of FM 1626 in Austin to a four lane road;
• a $75 million widening of SH 31 from two lanes to four near McLennan

Work on the Trans-Texas Corridor will also continue in FY 2008. “Right now we are still moving forward with the TTC 35 corridor, and the TTC 69 corridor,” Saenz says. TxDOT will soon release the final >> environmental impact study for TTC 35, and should choose the routes for the individual segments during the next 18 months.  Cintra-Zachary is the private developer working with TxDOT on this project. 

For the TTC 69 corridor, TxDOT is close to putting out a draft EIS, and has the authority to bring on board a developer partner. “We hope to be able to go out soon with requests for final proposals for that corridor,” Saenz adds.

Few changes for railroads and airports TxDOT is also responsible for the state’s general aviation airports and for working with the railroads. There are no major projects planned in either case, but work on the airports, at least, is expected to continue at its current level.

Most of TxDOT’s airport funding comes from the federal government. “Last year we got $55 million in federal funds, $16 million provided by our own state grant program, and around $8 to 10 million in local funding,” says Dave Fulton, director of TxDOT’s Aviation Division. He expects approximately the same federal funding in FY 2008, although the enabling legislation has been tied up in Congress.

TxDOT will be using much of its airport funding to make improvements to the reliever airports that are helping reduce congestion at air carrier airports. “As we continue to improve those airports, business aviation in particular is migrating from inner city air carrier airports to the reliever airports,” Fulton says. “In the past we’ve built several air traffic control towers, and we’re going to continue to look at that where a reliever airport has a need for it.” Some airports may upgrade or replace runways in the future to accommodate the extra traffic.

TxDOT does have the authority to build railroads as part of the Trans-Texas Corridor, or TTC, and is looking at a proposal under TTC 35 to build a rail element. But plans to move railroads out of downtown centers have been put on hold since the legislature failed to fund a railroad relocation mobility fund.

 “Any time you have to build railroads, it’s a high capital cost and our dedicated funding does not allow spending on railroads,” Saenz says. “We’ve been doing some studies across the state, and we have estimated the cost to move railroads out of the major metropolitan areas will be about $15 or $16 billion.” 

That’s money that TxDOT doesn’t have right now and is unlikely to have for railroads, for roads, or for any other projects-anytime in the near future. 

Related Links

A Q&A With TxDOT Executive Director Amadeo Saenz >>