It's taken about a decade and a half for Texas to return to its traditional method of pay-as-you-go financing for transportation. But all signs from the past few legislative sessions say it's the path for the foreseeable future. In November 2014, Texas voters approved a constitutional amendment, Proposition 1 that directs a minimum $4.1 billion in oil and gas tax revenues to be deposited in the State Highway Fund over the next three years.

The next step came with the passage of SJR5 by the Legislature this year. SJR5 would also dedicate $2.5 billion in state sales tax proceeds and part of the taxes from motor vehicle sales to bolster funding to build and repair Texas' highways and bridges beginning in 2018. On November 3 this year, voters approved SJR5 through their support of Proposition 7. And with state leaders finally delivering on their promise to end diversions from the state's gasoline taxes, an additional $1.3 billion will be available to help fund transportation projects. Gas taxes are a primary funding source for roads.

The flat 20 cents Texas now collects on every gallon of gasoline and diesel fuel sold has not been adjusted since it rose from 15 cents in 1991. Since that time, costs associated with road construction have more than doubled. And with tremendous population growth come wear and tear on existing roads and increased demand for new capacity.

Finding and redirecting existing funding streams is different from the methods pursued during the early 2000s when state leaders and the Legislature opposed and still oppose raising road revenues via tax increase. Instead, Texas created new financing tools such as the Texas Mobility Fund, Proposition 12 and Proposition 14 and public private partnerships, also known as Comprehensive Development Agreements (CDA). Under the Texas Mobility Fund, Proposition 12 and Proposition 14, the state issued bonds that were sold to raise funds that would be used for roads. Through the tool of a CDA, authorized in 2003, TxDOT could enter into contracts with private developers to upfront finance and build highway projects in exchange for the right to collect payment - and profits - through tolls. Through these combined tools, Texas had more than $17 billion in bond capacity to build new roads.

Subsequently, construction projects boomed across the state. The necessity of these new financing instruments was partly precipitated by September 11, 2001 and with it all the financial havoc it wreaked worldwide for the first part of the decade. These tools flourished as a cash-strapped Texas experienced the first of two economic downturns that decade. Drastic budget cuts were put in place in 2003, impacting the 2004-05 biennium and the only available cash for road construction - it seems - came from private sources.

By 2007, public and legislative sentiment had begun to turn, especially toward foreign developers. SB792 placed a two-year moratorium on CDAs, but allowed projects such as the LBJ Expansion, North Tarrant Express and D-FW Connector that were underway to continue. TxDOT was also prohibited from entering into public private partnerships after 2009. Bills passed in 2011 (SB1420) and 2013 (SB1730), allowed TxDOT to enter into CDAs only for specific projects; including Southern Gateway and the long-awaited Loop 9 outer loop that's been in state plans since 1968.

A new contingent of anti-big government members joined the Legislature for 2015, adding to like-minded groups elected in 2010 and 2012. They took a look at accumulated debt that will cost Texas about $10 billion in financing on top of the $13.7 billion now committed to current projects and said enough is enough. Under HB122 effective now, no more debt can be extended through the Texas Mobility Fund and existing Fund revenue can be used to retire debt early.

In all, TxDOT's appropriation for the 2016-17 biennium is $23 billion, but a considerable portion of that amount will be spent servicing existing roads. Even with the anticipated infusion of $5 billion in new funding and a return to pay-as-you go, motor fuels tax-based financing, TxDOT's reasonable goal is to maintain roads and congestion to the conditions that existed in 2010. In other words, the new highway funding will only help Texas maintain the status quo.

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