DeVore: Texas economy puts spotlight on transportation needs

This legislative session there are calls to stop the yearly diversion of about $600 million from the state’s transportation fund to support non-road-related programs.

These budget changes steer about $2.3 billion more per year to transportation. This is more, in highway cost index-adjusted dollars, than the Texas Department of Transportation had a decade ago. Still, some say TxDOT needs billions more.

Reforming TxDOT procurement processes could result in up to a billion dollars a year worth of extra highway construction at no cost.

The traditional way of building a road or a bridge is for a government or a contractor to design it first and then ask contractors to submit bids to build the design. But there’s a better way. Rather than “bid-design-bid-build,” projects can be completed using “design-build” contracting.

In design-build contracting, the same contractor is responsible for both designing and building the project. Practical experience from several states and the federal government shows that design-build contracting can speed road and bridge construction by months or even years while saving up to 29 percent over traditional contracts.

But TxDOT is restricted from awarding more than three design-build contracts per year with a minimum value of $50 million per project. This statutory limit expires in August. Furthermore, since 2012, TxDOT cannot even ask for bids on a design-build project unless it also provides a design that is about 30 percent complete — which defeats the purpose of design-build contracting in the first place.

Competing bills in the Legislature would either tighten design-build restrictions on TxDOT or alternatively free the agency to use more design-build contracts when appropriate.

In addition to contracting reform, Texas’ long-term transportation needs also deserve consideration.

For decades, the number of miles we drove was closely locked to population growth and jobs. That changed in 2006. As a result, while the Lone Star State continues its strong economic growth and attendant population increase, Texas drivers are driving less, not more. Combined with other factors, fuel tax revenue has slowed over time just as Texas has seen greater use of its roads by trucks hauling goods to and from Mexico in addition to the pending boost in port traffic due to the expansion of the Panama Canal.

On top of this challenging mix are the coming rapid advances in vehicle automation that may transform the drive to work, reducing accidents and increasing speeds during peak commute periods. Furthermore, sharing services, such as Uber and Lyft, reduce the need to own a car, with attendant implications for tax revenue, carpooling and commute times.

Accounting for some of these trends and future developments, TxDOT’s draft 2040 plan projects 28 percent less traffic growth today than was forecast only seven years ago. But, the 2040 plan’s capital needs estimate only dipped 9 percent, suggesting the amount we need to address congestion might be overestimated by as much as $1.8 billion per year.

With billions more for transportation coupled with procurement reform this year, Texas drivers may see relief on the road ahead.