State lawmakers with the Appropriations Committee took a break for their summer vacations this week and returned to the Austin to talk about the state’s population which is growing faster than its infrastructure. Lawmakers expressed a concern about funding for road maintenance and new construction because of old debt.
“A lot of our money that we could be using for future construction and maintenance is going to debt service,” said Rep. Larry Gonzales, R-Round Rock.
The state gets hit with $2.2 billion in interest charges each biennium.
“Think about paying off a credit card interest.” Gonzales said, “That’s cash out of my pocket that I don’t have to pay for roads going forward.”
For more than a decade the state issued bonds to fund most of the new construction on state highways and bridges.
“Starting in 2005 they borrowed a total of about $31 billion for transportation,” said Rep. Joe Pickett, D-El Paso. Pickett, the Chairman of the House Transportation Committee, said the state needs to pump the brakes on bonds and not borrow money for “anything and everything.”
“We’re looking at how can we pay that quickly, how can we pay that down how can we use that money for real projects going forward and not just be in debt,” said Gonzales who is the Subcommittee Chairman for the House Appropriations Committee. To roll back the state’s debt and move new construction plans forward, lawmakers are in search of another route to add revenue.
Gonzales said, “Cash is good, debt is bad. We are trying to get to cash which is what this committee hearing comes down to.”
Gonzales said Texas is losing too much money on the interest paid through bonds and toll lanes may be the best way to pay for future projects.
Texas voters approved Proposition 1 in 2014 and Proposition 7 in 2015 to steer some of the state’s oil and gas tax revenue toward roads.
Pickett, the House author of both propositions, said the new dollars steered to The Texas Department of Transportation has been a huge help, but the amount of money is now less than what he initially anticipated.
Pickett penned Proposition 1 in 2013, when oil and gas prices reached a peak and this year those prices plunged.
“Everyone is Texas knows that industry is down,” Gonzales said, “therefore the tax is down, our collections are down. So the money we would have used to pay for roads and bridges is now significantly less.”
The money the state makes sales taxes on fuel cannot be used to fund toll roads. Texas can tap into its general revenue fund to build future toll roads and there is still money left over from previous mobility bonds that allow tolls.
“Transportation is pretty much the backbone of the economy,” Pickett said.
The Appropriations Committee discussed a variety of funding mechanisms at Monday’s hearing and Gonzales said there are still a lot of figures and projections to consider.
Gonzales said a pay-cash solution could help speed up construction projects and bump up completion dates.
“Paying cash for projects probably helps us move forward, if we have the cash, right?” Gonzales said, “We have to have the cash.”
