$5 Billion Road Bond Package Outlined

September 25, 2007

By ADRIENNE GRAHAM And ROY MAYNARD, Staff Writers, Tyler Morning Telegraph

Proposition 12 on the Nov. 6 constitutional amendments election will help fund safer roads in Texas by allowing issuance of up to $5 billion in general obligation bonds, state Transportation Commissioner Ned Holmes said.

"It seems pretty obvious Texas is facing several challenges, one of which is transportation," Holmes told the Tyler Paper's editorial board Tuesday.

As a public official, he's not allowed to advocate the amendment's passage, but he can "lay out the facts," he said.

Holmes described the Texas Department of Transportation's current economic state as "the perfect storm" of funds versus needs.

"We have a population that continues to grow, and it is growing at a rapid rate. Then we have this phenomenon of increasing costs for labor and materials," he said.

Holmes said construction costs are rising by about 9 percent per year, while the Legislature has increased TxDOT's budget by an average of 2 percent.

"If you put those numbers on a graph, the lines would cross in about two to four years," he said.

Holmes said the problem is exacerbated by the fact that the state motor fuel tax, which is a major source of revenue for Texas roads, has remained unchanged, at 20 cents since 1991. With a nickel of that tax going to education and a portion going to other purposes, the tax yields the state about $2.1 billion annually, Holmes said.

"Quite honestly, I don't see any change (in this pattern) in the foreseeable future," he said

Holmes said it is important for Texas to find an alternative source of funding before all new construction projects have to be put on hold.

"A significant amount (of the state's road budget) will soon have to go into maintenance of existing roads, while a decreasing percentage will be put into new construction," he said.

Holmes said lack of funding for new construction is a major concern for areas, such as Tyler, experiencing a flurry of rapid growth. He emphasized the importance of finding a non-traditional way to supplement the dwindling funds.

"The governor and the Legislature have done a good job of looking, and they've found some pretty creative and controversial ideas. But there's one source that's not controversial, and that's the bonds on the Nov. 6 ballot," he said

If passed, Proposition 12 will allow the 81st Legislature to issue up to $5 billion in general obligation bonds for highway improvements.

"My sense is that it's going to be very, very difficult to increase the traditional sources of highway funding in an amount that will adequately address maintenance and new capacity."

Holmes said Texas has the largest highway system in the country, but it ranks 44 in the nation when it comes to per capita for funding.

That is why Holmes said the $5 billion bond will not solve the funding problem completely, but rather provide about $1 billion per year for the most needed projects.

"To give you a sense of scale, the Dallas-Fort Worth TxDOT region says it has about $50 billion in needs. The numbers are huge. This will help, and it would be directed to the biggest needs," he said.

If passed, these bonds will be paid for with general revenues and there will be no increase at the pump.

"Currently, the state is operating at a surplus. I'd like to see some of that surplus go to the highway improvement and expansion category, and that's effectively what this bond package would do," he said.

Safer Roads Coalition spokesman Lawrence Olsen said he has talked with many community leaders across the state who plan to support Proposition 12.

"I find a strong base of support for the job TxDOT does. I'm cautiously optimistic that come Nov. 6 we'll have a favorable vote," he said.

Northeast Texas Regional Mobility Authority Chairman Jeff Austin III, said he is encouraging voters to approve the bond.

"Locally, we depend on money from the state for our roads. The state depends on Washington, and Washington is running out of funds. We have to look for alternative funding, and we need it today," he said.