Transportation Funding
- Gray Rutledge
- 14 hours ago
- 2 min read
Given the funding challenges that TxDOT will likely face in the coming years, the Legislature should consider alternative financing arrangements.
House Subcommittee on Transportation Funding
In total, TxDOT has planned for approximately $101.5 billion to be spent towards new investments during the entire ten-year period (FY2026 through FY2035). Combined with the expected costs of project development and routine maintenance contracts, the final total of TxDOT’s 10-year investment in projects comes in at just over $146.5 billion. This figure represents virtually all of the money the state is reasonably expected to allocate towards the development of new construction projects and maintenance projects for the state’s road-based infrastructure during this period. This projection excludes TxDOT’s obligations for ongoing legacy projects that have already been let.
This total marks a decline in projected allocations against the previous year, which was totaled to $147.9 billion in the 2025 UTP (a $1.4 billion difference). In its own words, TxDOT remarked that this decline was “to normalize its letting schedule by aligning project development budgets and contract lettings going forward." In plain language, TxDOT is slowing the pace of new commitments to match funding availability.
All of this illustrates rising pressure on the state’s transportation budget to fund new infrastructure and maintain existing commitments with increasingly inadequate revenue sources. This is reflected in TxDOT’s own words, financial forecasts set by both the agency and the Comptroller, and reduced investment targets outlined by the UTP.
While the discretionary and formula-based methods for determining future transportation spending are sound, altering this allocation structure will not remedy the vital concern that TxDOT’s funding sources are becoming increasingly insufficient and unpredictable. In any case, given the funding challenges that TxDOT will likely face in the coming years, the Legislature should consider alternative financing arrangements, particularly public-private partnerships (P3s).
Texas should be sure to include P3s as a tool in its toolbox when it comes to transportation infrastructure. Otherwise, transportation funding pressures will continue to build as the state grows.
Several factors combine to place consistent pressure on the Texas transportation budget. The Legislature in recent years has made great efforts to provide new streams of funding for transportation projects, which has led to billions of dollars in additional funding. But still more funding is needed, and traditional solutions by themselves are likely to prove inadequate. Policymakers should strive to make sure that increased use of P3s is at least part of the solution to this problem. P3s have a track record of sound performance in Texas and elsewhere and offer some advantages over traditional transportation financing. The Legislature should consider turning to private funds to ensure that Texas’s transportation infrastructure is able to accommodate the state’s economic growth and ever-growing population.
Read the full testimony in the link above.
