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The Role of Public - Private Partnerships in Texas

Background: Increased Funding for Transportation Transportation financing has been an urgent concern for state lawmakers for at least the last three legislative sessions. The All-Funds budget for the Texas Department of Transportation for 2012-2013 was nearly $20 billion, with about half going to planning, right-of-way acquisition and construction. The Texas Department of Transportation (TxDOT) Legislative Appropriations Request for the 2014-2015 biennium, noted that “[t]here is no question that Texas has a transportation funding challenge. Our traditional sources of funding have proven no longer reliable, making it difficult to meet the mobility needs of our rapidly growing state.”

The Texas State Data Center projects our state’s population to be as high as 55 million people by 2050. Furthermore, a recent Census Bureau report highlights Texas as the recipient of net internal migration: people leaving other states and moving to Texas. As population grows, so do the demands on infrastructure. In response to these challenges, legislators and the voters of Texas have dedicated substantially more funding to TxDOT for transportation construction and maintenance projects.

The 83rd Legislature (2013) passed Senate Joint Resolution 1 and House Bill 1 (83S3) to allow for the transfer of certain oil and gas severance tax revenues to the State Highway Fund (SHF). SJR 1 was approved by voters in November 2014. The 84th Legislature (2015) passed Senate Joint Resolution 5 to allow for the transfer of up to $2.5 billion of state sales tax revenues and a portion of the motor vehicle sales tax to the SHF each year. SJR 5 was approved by voters in November 2015 (Prop 7). According to the Comptroller’s revenue estimate for the upcoming 2018-19 biennium, SJR 5/Prop 7 will result in an additional $4.7 billion in state sales taxes being transferred to the SHF, while $1.3 billion will accrue to the SHF as a result of SJR 1. Therefore, as a result of actions taken by legislators and approved by voters in 2013 and 2015, $6 billion in additional funding is available for transportation projects in the 2018-19 biennium alone.

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