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2008-03-12 / Front Page

TxDOT makes $1 billion error

Agency scrambles to meet maintenance obligations

In the midst of inflation, funding difficulties and halted expansion projects, a budget error on the part of the Texas Department of Transportation (TxDOT) may have exacerbated their challenges.

"TxDOT does some mysterious accounting," said Rep. Chuck Hopson (D-Jacksonville). "They had close to $1 billion counted in their budget twice."

"That was a serious error on our part and we have made changes to try to prevent that type of error from occurring again," said TxDOT Spokesman Chris Lippincott, adding that the amount added twice in their financial statement was unrelated to the $1.2 billion in federal rescissions, which are expected by 2009.

The issue of the cash-flow document error was taken up at a recent joint committee hearing between the Senate Finance Committee and the Senate Committee on Transportation and Homeland Security. "That was a good meeting for us," Mr. Lippincott said. "We were able to explain our misinterpretation of the cash-flow documents."

Besides the paperwork and legislative difficulties, TxDOT faces new challenges in funding the maintenance and expansion of the largest highway system in the nation, Mr. Lippincott said.

"We have an aging (highway) system, which means maintenance needs are increasing," he said. "We're reaching the maximum amounts of our bonding authority, so we're having to use more funds to pay for debt service."

Mr. Lippincott added that inflation has increased the costs of highway materials by 60 percent over the last five years.

"What used to cost $100 now costs $160," he said.

Other difficulties for Tx- DOT arise due to tax-dollar allocation.

"Many people believe that once they pay their gas taxes, that money goes to TxDOT," Mr. Lippincott said. "It doesn't. It goes to the state and the decisions on how to spend the money are made by the legislature. They have a tough job, I wouldn't trade places with them."

Gasoline taxes

The State of Texas charges 20 cents per gallon in gasoline taxes. Mr. Lippincott said more than $1.5 billion in state gas tax revenue will be spent on other priorities by the Texas Legislature.

"Those needs include the Texas Department of Transportation and the Texas Education Agency," he said. "One nickel for every 20 cents of gas tax revenue is placed in the permanent school fund. It's harder to imagine a better use for tax revenue than public education."

Mr. Lippincott added that more motor vehicle fuel taxes will be spent on needs other than highway funding in the 2008-09 biennium than any other biennium.

"The legislature is aware of that and they are taking it seriously," he said. "We face the challenges of a growing state. Texas population grows by 1,000 people every day. The dollar doesn't go as far as it used to."

Rep. Hopson said options have been reviewed, such as a user-based tax system and toll roads.

"People have looked at (raising) the gas tax," he said. "In our economy, we can probably do something else instead of raising gas taxes. (TxDOT) wants to toll (drivers) and put in the Trans-Texas Corridor. The legislature is pushing back."

Still, key legislators are working to help TxDOT meet the challenges it faces.

"Not all of the funding from the state gas tax is going to TxDOT," said Alicia Phillips, press secretary for Sen. Robert Nichols (R-Jacksonville). "The senator feels that TxDOT is underfunded."

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