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Texas Senate
August 21, 2000
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Texas State Affairs Committee Discusses Mass Transit and Transportation Funds

AUSTIN - The Texas Senate State Affairs Committee held its last public hearing of this interim on Monday, August 21, 2000, at the State Capitol.

Lt. Governor Rick Perry has asked the committee to research ten charges, that is, issues, during this interim. Today, the committee discussed two of the ten charges.

In the morning, the members received testimony about charge 5, which orders the committee to study the funding and expenditures of Metropolitan Transit Authorities (MTAs) and the budgetary relationships that MTAs have with the cities they serve. The committee is analyzing the overall fiscal management of the MTAs and the effectiveness of their delivery of services on a cost-benefit basis. Giving testimony about this charge were: Leonard Scarcella, Mayor of Stafford; Steve Terrell, Mayor of Allen; Joe Jaynes, Collin County Commissioner; Vic Suhm, North Texas Commission; Karen Rae, General Manager of Capital Metro; Robert Pope, Board Member of DART; Shirley DeLibero, President and Chief Executive Officer of Houston METRO; John Milam, General Manager of VIA-San Antonio; Alice Holland, Chair of the Forth Worth Transportation Authority; John McBeth, Legislative Chair of the Texas Transit Association; Bob Bearden from the Comptroller's Office; and Jim Thomassen from the Office of the Attorney General.

Most of the witnesses agreed as to the need for mass transportation, due to population growth and the effects of heavy traffic on the environment. The development of commuter or light rail systems was favored instead of building new highways, with local authorities recommending future referendums to leave the decision in the hands of the people. As popular as mass transit seems to be in some places, the question is how to fund it. Most communities represented at the hearing have already committed their sales tax money to other projects. Big cities like Dallas, for example, assign one cent of each dollar from sales taxes to regional transportation, another form of economic development previously approved by the voters. MTA officials are looking at mass transit in communities around the country to see what works and what doesn't.

Committee Chair Florence Shapiro of Plano questioned the benefits of even a highly used mass transportation system on the environment. Senator Drew Nixon of Carthage recommended testing any new mass transit system in a region for a period of five years to see if it works before spending funds all over the state. Officials from MTAs agreed that funds should be spent carefully, but that the need is so crucial and widespread that five years would be too long to wait. Nixon insisted the system would have to connect people to their work places, stores, banks and schools, and that there is no certainty that people would actually use it.

A representative from a group called "Reclaim our Allocated Dollars" presented public testimony against Austin's Capitol Metro, saying "we voted for it but have no voice about it after we created it." He criticized Capitol Metro's 140 million dollar yearly budget, saying it's more than is spent on police protection. He also said Austin doesn't need light rail, claiming it is too expensive for the few users it would have. He proposed building more roads instead. Nixon agreed, saying that a widespread mass transit system would only be worthwhile if more than 25% of the population uses it, such as in Europe or New York City.

Senator Cain responded that we cannot wait until we are sure 25% of the people will use it, and that we have to start somewhere. He added that the increasing price of oil is one more reason to consider mass transit.

During the afternoon, the committee received testimony about charge 1, which orders the members to evaluate the state's intermodal transportation planning efforts with an emphasis on North American Free Trade Agreement (NAFTA)-related trade corridors and their impact on both metropolitan and rural areas of the state. The committee is addressing all modes of transportation including highways, farm-to-market roads, turnpikes, mass transit, aviation, railroads and water traffic. It shall also determine whether the state is getting all the federal funds to which it is entitled and will evaluate alternative and innovative methods of transportation funding and develop recommendations for their use. Those presenting testimony included John W. Johnson, Commissioner of the Texas Transportation Commission; Lee Jackson, Dallas County Judge; Ray Hutchison of the law firm of Vinson & Elkins; Eric Altman, Managing Director of J.P. Morgan Securities; Robert Eckels, Harris County Judge and TEX-21 co-chair; and Lawrence Olsen of Texas Good Roads.

This discussion also concentrated on funding a long list of needs due to an aging and crowded transportation system. Witnesses said the infrastructure is deteriorating while the number of cars is always increasing. For example, Texas had more than 700 thousand cars registered last year. A telling example was given by Commissioner John W. Johnson, who said it will cost $57 million to extend only six needed miles of road in the Fort Worth area, a project that may take ten years to complete.

The quest for federal funding to assist the NAFTA trade corridors has been less than successful. Texas received only 14% of the funds requested for this. That lead Senator Shapiro to say that the state's taxpayers are subsidizing national trade. Senator Lucio hinted that traffic congestion in the Mexico-Texas border may be causing economic harm to the state and the nation, since 80% of the NAFTA trade goes through Texas.

They also discussed different possible ways to obtain the much needed transportation funds. One of the the options proposed was for the state to issue Garvey Bonds, which would be paid back in future years with federal funds. This option goes against the pay-as-you-go Texas tradition, with those opposed to the bonds concerned that the federal government might not pay off the debt as promised. Another consideration against the bonds is the fact that the Texas Constitution requires a balanced budget. The state's voters might have to change the Constitution with an amendment to allow the use of Garvey Bonds, although others say these bonds are not theoretically considered a debt.

Senator Shapiro added that California, another state with rapid population growth, spent its entire budget surplus on transportation last year. Whether the funds come from Garvey Bonds or any other source, many believe the needs are so crucial that the money has to be found somehow. Other members and transportation representatives mentioned the option of increasing taxes, such a dreaded word for many it was referred to here as "the T word ".

Plano Senator Florence Shapiro chairs the committee. Other members include Senators Eliot Shapleigh of El Paso serving as vice-chair, David Bernsen of Beaumont, J.E. "Buster" Brown of Lake Jackson, David Cain of Dallas, Tom Haywood of Wichita Falls, Eddie Lucio Jr. of Brownsville, Drew Nixon of Carthage, and Jeff Wentworth of San Antonio.

The committee has adjourned.

Session video and all other Senate webcast recordings can be accessed from the Senate website's Audio/Video Archive.