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Posted Monday April 5, 2010 10:26am

Austin’s Road Building Plan
Costs Too Much, Does Too Little

Commentary by Roger Baker

Roger BakerRoger BakerThe Capital Area Metropolitan Planning Organization (CAMPO) recently unveiled its new 2035 long-range draft transportation plan, “People, Planning and Preparing for the Future: Your 25 Year Transportation Plan,” plus a separate appendix with important details. The comment form to accept your feedback on the plan will be open until 5pm April 13.

This long range plan is the result of a federally mandated planning process required of all large U.S. metropolitan areas. The federal rules mandate that CAMPO's long range plan must be updated every five years.

On the federal funding level, the fate of the big new federal transportation funding bill, the successor to the current “SAFETEA-LU” legislation, is bogged down in Congress. The current legislation is being kept in force with periodic emergency extensions. Federal Rescissions, or take-backs of previously promised funds, has stalled many state projects, even while a roughly equal amount of federal stimulus funding has been added.

In the absence of more fuel-tax revenues, the current federal stimulus spending for roads is unlikely to be sustainable for long because it is based on a troubling level of debt in competition with entitlements. Further, the U.S. Treasury at some point will face higher interest rates as the price for continuing deficit spending. 

Nobody can accurately predict federal transportation funding, and how that might affect the CAMPO plan. The long-range vision of the CAMPO plan is based on speculation about federal funding decades from now, whereas the reality is that we can't even predict it for next year.

The Texas Department of Transportation (TxDOT) is claiming it will be broke in a year or so, its options are limited to building no more new big roads at all. State Sen. John Carona (R-Dallas), who chairs the Senate Transportation Committee, explains why. Carona said, “Today, the state's transportation revenue is almost equal to the maintenance costs for our current system. Texas can barely maintain the roads it has, let alone build new ones.”

TxDOT is running out of money because its motor-fuels tax revenue—which netted the agency more than $2.2 billion in the fiscal year that ended August 31, 2009—is declining rapidly with overall driving. This mirrors the sharp drop in national driving over the last few years. As if this were not enough, the Texas

Legislature seems reluctant to raise the gasoline tax, even by a little, especially in a poor economy. The Texas motor-fuels tax has remained fixed at 20 cents a gallon since 1991.


The politics of travel-demand forecasting

Let us presume that you are a transportation planner trying to avoid getting caught in the crossfire that goes with Texas road politics. You have a strong incentive to try to have your cake and eat it too. In the context of severely limited road and transit funding, something has to give. It appears that the path of least resistance is to cut funding for road maintenance.

The maintenance portion of the total future budget is now proposed to be slashed from 22 percent of the previous CAMPO plan, down to at an astonishing level of just 6 percent of total spending in the new plan.

With the help of a landowner-friendly Texas Constitution, a ton of money has been made in the Austin area—especially since 1980—through private land development. Griffin Smith wrote about Texas road politics more than thirty years ago, and not much has changed except for more money problems. There is a long tradition of an organized Austin developer-road lobby working to subsidize suburban land development.

During the last few years, as gas tax funds have run short, the responsibility for funding road building was first shifted to TxDOT toll roads like State Highway 130, and more recently from TxDOT to the Central Texas Regional Mobility Authority (CTRMA), an independent agency. The CTRMA was authorized by TxDOT in 2002. The goal was to speed up construction through “public-private partnerships,” income-stream leveraging, and “innovative financing” to supplement the gas tax. Gov. Perry and TxDOT have tried to encourage local Regional Mobility Authorities like the CTRMA to do what TxDOT used to do. The CTRMA can issue tax-fee bonds and in general wheel and deal a lot better than a stodgy state agency like TxDOT. Meanwhile, TxDOT is still contracting out a major part of its current budget to big, project-hungry, politically active road contractors like the Zachry Corporation.

The new 2035 CAMPO plan is essentially a carryover product of the recent era when State Sen. Kirk Watson (D-Austin) chaired CAMPO. That was a time when the Real Estate Council of Austin and the Austin Chamber of Commerce were heavily involved in lobbying for toll roads, partly in response to a strong level of community opposition.

The CAMPO Policy Board politicians decided to use the old 2006-2007 sprawl-trend demographics for their new long range plan. With the future travel “problem” to be solved defined in this way, the CAMPO planners are advocating the clustering of suburban population growth into compact growth centers. This is a type of land-use development more compatible with transit than the current sprawl development trends.

The CAMPO majority wanted to keep lots of new road capacity in the new 2035 plan, so road spending only decreases a little in the new plan, from 44 percent  to 41 percent. They also wanted lots of transit, but have no secure way to fund it. The transit part of the total funding pie expands from 32 percent to 45 percent in the new CAMPO plan.

Informed sources say that a reason that the Austin area hasn't gotten much federal transit money lately is that the CAMPO region isn't speaking to the feds with a coordinated regional voice. Round Rock is planning its own rail transit system, Cap Metro is now operating its Red Line rail service, Austin is planning a streetcar rail system with its bonding delayed, and Lone Star Rail is promoting another system.

In general, the plan authorizes the building of a lot of roads soon, and shifts the burden locally, while much of the transit waits for “innovative funding” to appear. Since future funding is so uncertain, the CAMPO plan is politically important to the road lobby and land developers primarily through the roads it authorizes and makes eligible for construction in the near future.

The new CAMPO plan, and its short-range element, the three-year Transportation Improvement Program, or TIP, are heavily tilted toward spending on roads in the early years—especially for Williamson County. Williamson County claims it can somehow get the credit to issue and pay back $4.1 billion in road bonds on its own. It thus has a long list of roads seeking federal matching funds in the CAMPO plan, as compared to Travis County.

 

Looming problems

Austin area freeways like I-35 reached practical daily saturation at peak hour long ago, despite the fact that total Austin traffic has not increased much over the last decade, according to TxDOT. Drivers experience frequent and unpredictable delays. Driving is increasingly stressful and people try to avoid it. Due to a combination of congestion, energy cost, and a depressed economy, travel behavior has become as unpredictable as future funds.

Suburban roads are overcrowded due to a lack of land-use regulation that allows massive housing developments to built without sufficient roads. Commuter roads, which are typically built by leveraging public debt, have become public subsidies to stimulate sprawl that is profitable to influential and well established land development interests.

With the past pattern of expanding rings of suburbs added over decades, suburban commuters drive ever farther. The cost of providing enough road capacity for new layers of growth tends to go up exponentially.

Demographic forecasts based on past trends are little better than opinionated guesses. Even if you build it, they may not come. As one such example, development in Hays County, much of it sprawl, is now seeing a high foreclosure rate compared to Travis County.

The following is a list of what I see as some major shortcomings of the CAMPO 2035 plan, if adopted:

(1) Revenues are probably way too optimistic.

(2) The 2035 demographic projections are based on the 2006-2007 construction boom.

(3) Congestion would become far worse than it is now.

(4) There is no track record or support data for the preferred clustered “growth centers” scenario.

(5) Road maintenance is planned to fall precipitously.

(6) The plan does not take into account the environmental impact of greenhouse gas emissions or suburban water constraints.

(7) Peak oil, which addresses the reasons why the cost of fuel will increase significantly, is mentioned but the ramifications are not incorporated into the planning.

(8) The planning ignores the recent decline in driving.

(9) The plan is heavily front-loaded to favor expansion of Williamson County roads.

(10) The plan favors highways today, mass transit someday.

If the plan being recommended by CAMPO staff is fully implemented, using every possible source of transportation funds that can be reasonably anticipated, what would happen?

The CAMPO model predicts that if its plan is fully implemented, Austin area residents will experience far worse traffic congestion than we see today. The number of severely congested roads will double and congestion delays will triple, to about a half-hour a day. Much of the projected funding in the plan is speculative, and even assuming it materializes many would say CAMPO's new plan costs too much and does too little, while letting roads decline.

CAMPO's previous 2030 plan was projected to cost about $23 billion. CAMPO's new 2035 plan assumes almost $27 billion in both income and spending, roughly keeping spending level after inflation compared to the last plan.

Demographic projections 25 years into the future are being used to define the future commuting demand. Is it wise to do that by spending so much so soon, in accord with a plan that puts much of the early spending on roads, in accord with a plan that puts much of the early spending on roads, while shifting the burden to local government?

Left unclear is why current trends would, or should, facilitate clustered suburban growth as opposed to compact city growth, which emphasizes infill development in the core city. One can assign hypothetical future commuter trips to transit to handle the overflow of traffic arising among edge cities like Cedar Park, Kyle and Manor, but does that make sense? Based on experience elsewhere, the transition from well established car-centric hubs like Kyle or Round Rock to a different kind of walkable development destinations will not be fast, easy, or cheap.

Texas road politics have evolved over time into a sort of public entitlement for private developments. CAMPO policy tends to justify and facilitate the roads with the most political clout. State Highway 45 Southwest, a toll road over the Edwards aquifer, is one example, and State Highway 290 East, a toll road being built over stages with stimulus funds, is another. Because of TxDOT's challenges, these are now being managed by the less regulated Central Texas Regional Mobility Authority.

 

The biggest threat: Soaring fuel prices

The one factor that seems most likely to scuttle the new CAMPO Plan is the likelihood of much higher oil prices within the first five years of the new plan. Higher gas prices began to inhibit U.S. driving starting in about 2003 and will likely continue to do so.

Record fuel prices revealed the world's maximum oil production level in mid-2008.  If the U.S. economy eventually recovers enough to lead to a resumption of past driving behavior, then the world oil market will face the same limits again.

which will spike fuel prices and inhibit the attempted recovery in driving. Due to long lead times, global producers probably cannot keep oil production above about 92 million barrels a day—no matter what the price. Before long, depletion will overtake the maximum global oil production that even a very high price can deliver.

The British report, “The Oil Crunch”, is one of the clearest windows we have on the global liquid fuels future; it says we have a maximum of five years left before driving gets really expensive, worse than in mid-2008.

If these reports are accurate, a lot of our shrinking transportation funds are liable to be squandered trying to handle unlikely future traffic, while locking in a financial commitment to perpetuate sprawl served by the toll roads.

If the anticipated toll revenues do not materialize, the municipal revenue bonds involved could default, and undermine the Austin area's bond credit rating and future potential.

If Texas driving recovers, the one secure form of revenue, the Texas motor fuels tax, could recover. How likely is that? Perhaps not very likely with the current jobless recovery.

Texas is among many states facing a funding crisis. Given average consumer debt, long-term consumer spending revival prospects are not too rosy.

It seems possible that Texas gas tax revenues may even have peaked forever.

No matter how you look at the likely scenarios going forward, the Texas road lobby and all its politically powerful allies are headed into interesting and challenging times.

Roger Baker has been an Austin transportation reform activist since the early 1980s. He is a founding and advisory member of the Association for the Study of Peak Oil-USA. A longer version of this story may be found on The Rag Blog.