TxDOT is about to belly up to an $8 billion feast of borrowed money
By Ben Wear
The Texas Department of Transportation, which has alternated between fiscal gluttony and subsistence the past few years, may be about to belly up to a feast again.
A feast paid for with money to be borrowed, mind you. Given the state of credit markets, one hesitates to reach for the salt right away. But absent the financial Armageddon that the president and others have been gabbing about, TxDOT might be sitting on an $8 billion stash this time next year.
Even in the zero-laden world of government spending, $8 billion would be a significant infusion into TxDOT's budget. Without that money, the agency had estimated that it could spend $2.5 billion this year on construction and major maintenance projects. That's a big drop from the fat years between 2004 and 2007, which were also fed by borrowed bucks. So this money, to be borrowed and paid back from both gas tax and general state revenue over the next 20 years or so, would make a big difference.
It might even get that second round of toll roads in Austin built, the five roads that local leaders approved last year only to be told a month later that TxDOT suddenly didn't have two nickels to rub together.
But, not to be tiresome about repeating this, the $8 billion is only a short-term fix to a forever need to pay for building and maintaining ways to get around. Congress and the Texas Legislature, at some point, will have to face the complex and politically uncomfortable fiscal reality that the combined state and federal gas tax of 38.4 cents a gallon can no longer get the job done.
For now, though, TxDOT and legislators can smack their lips over the $8 billion.
It will come in two servings. First, TxDOT will borrow about $2.9 billion against the gas tax under a constitutional amendment that was approved in 2003. The agency had hesitated to do this, figuring that gas taxes were already stressed without setting aside $300 million a year for debt over the next generation. But legislative leaders have indicated that they'll stop most current gas tax "diversions" to things like the Texas Department of Public Safety and give that money back to TxDOT.
Then there's an amendment that voters approved in November. That would allow borrowing up to $5 billion — for "highway improvement projects" only, the legislation said — to be paid back with general state revenue. That's another $500 million a year in payback.
Texas Transportation Commission Chairwoman Deirdre Delisi, at a meeting last week, played the role of wet blanket, cautioning that the costs of Hurricane Ike on the state could cause something of a pullback by the Legislature. She said later that no lawmakers had told her that might happen and that she was just warning against "irrational exuberance."
The kind that now has Wall Street bankers edging toward upper floor windows. So don't count your Central Texas toll roads before they're hatched.
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