Dallas Morning News 6/9/15 11:31 PM By Tom Benning & Brandon Formby
In Texas, mega-bucks for transportation still don’t necessarily cover mega-projects.
Lawmakers worked this year to add billions of dollars to Texas’ budget for roads, a task that’s vexed them for most of a decade. They set the stage for Texas’ biggest-ever increase in transportation funds. And they did so while accounting for the public’s loud demands for fewer toll roads.
But left unsolved was how to fund — in a timely fashion — major overhauls. Nowhere is the gap more evident than the planned $1.4 billion LBJ East project in northeastern Dallas County.
“This session was just the nexus between an old, inadequate funding infrastructure and a newer process that will have more adequate funding,” said Garland Mayor Douglas Athas, who pushed for the project’s financing even if it meant including some tolls.
“We got caught in the middle,” he added. “And there were consequences for that.”
The funding boost, which needs voter approval in a statewide election this fall, is only enough to allow the Texas Department of Transportation to help keep congestion from getting worse.
It’s not such a windfall that transportation planners can suddenly pay cash upfront for massive highway redos in North Texas and beyond. And it’s not near the amount needed to rid the state of tolls, which have typically allowed the bigger projects to be expedited.
More than just a math problem, that limbo likely speaks to how realistic — or unrealistic — a toll-free Texas might be.
“It’s not an overnight fix, is where we find ourselves,” said Rep. Cindy Burkett, a Sunnyvale Republican who serves on the House Transportation Committee.
The state’s roads budget has been inadequate for some time, in the eyes of the transportation department. Planners have repeatedly asked for an additional $5 billion just to keep up. That’s in large part due to the diminished spending power of the state’s 20-cents-per-gallon gasoline tax, which has been flat since 1991.
But Republican leaders have been unwilling to increase taxes or fees. And in years past, budget writers balked at creating a hole in future budgets by shifting tax dollars to transportation.
This year, however, lawmakers rallied around an idea to increase transportation funding with parts of the revenue from general sales tax and motor vehicle sales tax.
By 2020, that’s projected to give TxDOT an additional $3 billion a year for nontolled roads. Combined with another boost approved by voters in 2014 — which produced $1.7 billion this year — and other budget maneuvers, that $5 billion goal is close to being met.
While the new money can’t be used for toll roads, that caveat is limited to the Transportation Department. It doesn’t apply to the North Texas Tollway Authority, an independent agency. NTTA funds its expansions and new roads with excess toll revenue from its existing roads.
Michael Morris, transportation director of the North Central Texas Council of Governments, said the Legislature has “turned a corner.” And transportation advocates agree that the increase will have a significant impact in the Dallas area and across the state.
“You’ll see more traditional roadways,” Morris said. “You’ll see fewer toll projects.”
But the state’s approach to the largest projects remains an open question.
TxDOT chief financial officer James Bass told the House Transportation Committee in March that if the Legislature were to prohibit new toll roads altogether, the agency’s annual shortfall would jump from $5 billion to almost $10 billion.
That’s because it could be years before the current funding boost stacks up in a meaningful way for larger projects.
Before legislators last month hammered out their final transportation funding mechanisms, Regional Transportation Council chairman Mike Cantrell sent lawmakers a letter asking for long-term solutions. The letter was accompanied by a “case for tolling and project leveraging” that portrayed toll financing as vital. It said that for every $1 government agencies have spent on area toll roads and managed lanes, private companies have spent or will spend more than $7.70.
“Facilities like these provide transportation choices, reduce construction and maintenance obligations for the state, manage travel demand, and free up capacity in the other travel lanes,” the RTC’s study said.
Though it’s unclear how the new funds will be distributed throughout the state, the $1.7 billion increase provided this year is a guide. About $367 million went to needs throughout the greater Dallas area.
So a pay-as-you-go model could take almost prohibitively long for a project like LBJ East, a stretch of the LBJ Freeway that spans 10 miles from North Central Expressway to Interstate 30.
“In all due honesty, that won’t be enough to do this project,” said Athas, the Garland mayor who also serves on the Regional Transportation Council.
‘The Voters Spoke’
A side effect of the Legislature’s debate over transportation funding is that it stagnated efforts to green-light expedited financing for LBJ East and other projects.
For both mobility and economic development reasons, that LBJ corridor has long been considered by transportation planners for expansion. The highway there is congested, outdated and inexplicably designed — featuring, for example, no frontage roads in spots.
In years past, it would’ve been a lock for a so-called comprehensive development agreement.
Those public-private partnerships typically use tolls to accelerate financing and construction by using future toll revenue to leverage a bigger investment. On LBJ East, the idea was to use tolled managed lanes to help fund new free lanes and frontage roads.
But with the public tired of what some call double taxation — one paid at the pump, the other on the roads — officials hit the brakes on that plan.
“The voters spoke, and they don’t want any more toll roads,” said Sen. Don Huffines, R-Dallas. “We’ve got the resources in the state of Texas to get that road built, and we’re going to get her built.”
It isn’t that simple, however, to find alternatives in an anti-toll environment.
North Texas lawmakers, who are united in touting LBJ East’s importance, tried in vain to find a solution that didn’t entail a typical toll project. They looked at adding more free lanes or allowing the use of tolls in the corridor only until the project is paid off.
In the session’s waning weeks, they even pitched a new kind of transportation investment zone to allow borrowing based on future state sales tax revenue collected along the road’s corridor.
But the idea ran into a time crunch — and some skeptics.
“That wasn’t an idea,” said House Transportation Committee Chairman Joe Pickett, D-El Paso. “That was grasping at straws.”
The session ended without LBJ East receiving a financing mechanism to speed up the project. The same went for other mega-projects, including perhaps Texas’ toughest transportation problem: the quagmire of Interstate 35 through Austin.
A two-year delay on LBJ East could, by Morris’ estimate, add tens of millions of dollars in construction costs. And the longer the highway goes unfixed, the longer drivers have to sit in traffic and the longer that economic development languishes.
North Texas lawmakers have banded together to move forward in the interim to limit those potential negative impacts. And given the project’s priority at the state, regional and local levels, they are hopeful that it will get done sooner, rather than later.
Whether those efforts succeed could serve as a test case for how costly projects will get done in Texas going forward.
“Some of the mega-projects are going to be tolls,” Pickett said. “There are ways that you can probably minimize some of the toll effects, but I don’t know that they will go away.”