Gov. Rick Perry has been traveling the country, trying to
lure businesses to Texas by touting the state's low taxes and light regulation.
But the state he has run since 2001 faces mounting problems with its roads,
water and other infrastructure.
This year's legislative sessions that ended earlier this month took steps to address some of the problems, but there is broad agreement that the measures don't go nearly far enough.
"We're woefully short of where we need to be," said Sen. John Carona, a Dallas Republican who chairs the Business and Commerce Committee. "It shouldn't be a surprise to anybody in the Legislature."
Several business leaders and legislators said last week that infrastructure problems stem from a lack of political will to do anything that could be called a tax or a fee increase. Many added, however, that blame for the problems doesn't lie with Perry alone.
Perry, the state's longest-serving governor, announced last month that he would not seek another term. But his highly publicized trips to vote-rich California, New York and Illinois to ask businesses to move to Texas sparked speculation that he's playing a longer game, eyeing the 2016 GOP nomination for president.
"The signs certainly point to him thinking about it," said James Henson, who directs the Texas Politics Project at the University of Texas at Austin. "Pretty clearly, Gov. Perry making these trips is generating a lot of free media."
The governor believes he has a good story to tell.
"With a workforce of over 12 million people, an unemployment rate that has been below the national average for over six years and as the national leader in exports for the 11th year in a row, Texas is one the most successful economies in this nation," his spokesman, Josh Havens, said in an email. "By sticking to the conservative principles of low taxes, smart regulations, fair courts and restrained spending, we have made Texas the best place to live, work, raise a family and start a business."
The consequences of the low taxes Perry brags about could undermine his narrative, though.
The state's credit card for highway construction and maintenance is almost maxed out, while every day, Texas gets 1,500 new arrivals, many of whom add to the congestion on its roads.
Meanwhile, voters will be asked in November to put up $2 billion from the state's rainy-day fund to deal with a water shortage magnified by a historic drought.
Illinois Gov. Pat Quinn used Texas' water problems against Perry in April, just after the Texas governor purchased radio advertising and announced a business-recruiting trip to Chicago.
"His state, frankly, is water challenged, and any company thinking of going to Texas better check on their water," the Associated Press quoted Quinn as saying.
Carona said if voters approve the $2 billion for water, it will cover "only a portion of the total need" to fund the interconnected system of reservoirs he believes the state will need even if the drought ends.
"I never really object to taking anything to the voters, but I'm concerned that voters believe it will solve the problem," Carona said.
The low taxation Perry touts is only one of three major factors businesses consider when they weigh whether to locate somewhere, said Robert P. Inman, a professor of business economics, public policy, finance and real estate at the University of Pennsylvania's Wharton School. The other two are infrastructure and the quality of the labor force, he said.
"Firms cannot function without a quality public infrastructure," he said.
Of Texas' infrastructure problems, those with its roads loom largest, said Texas Association of Business President and CEO Bill Hammond.
Traffic jams in all of the state's metropolitan areas force businesses to idle away gas, wear out vehicles -- and pay employees -- while going nowhere fast.
"The cost of that is enormous," Hammond said. "Not only to businesses, but to all Texans."
Dollars to maintain the state's roads have been so scarce that the Texas Department of Transportation plans to plow up 82 miles of Farm-to-Market roads in oil-and-gas producing areas and cover them with gravel, said Ted Houghton, chairman of the Texas Transportation Commission, which oversees the department.
The announcement prompted several lawmakers earlier this month to say this will be the first Legislature in Texas history to preside while roads were deconstructed. They tried in vain to get the transportation department to change its plans.
Then on Friday, the Texas Municipal League decried what it said were plans by the transportation department to dump $165 million in yearly maintenance onto cities.
In El Paso, Interstate 10 has become such a patchwork that "the interstate is failing," Houghton, an El Pasoan, said. Within the next three to five years, the transportation department will have to come up with funds and figure out a way to rebuild it without having an alternative route to detour traffic to, Houghton said.
Another El Pasoan, Rep. Joe Pickett, labored mightily this year to get the Legislature in its third special session to finally pass a measure which -- even if voters approve it -- will go only part of the way to solving the need for road funding.
The constitutional amendment, which will go on the ballot in November 2014, would put up $1.2 billion a year -- a little more than a quarter of the money the state needs to maintain the highway system at its current level of congestion, Houghton said.
It would take another billion a year to ease it, he added.
"Unless they do something in the next session or two, all we'll be doing is maintaining the roads," he said. "We might do small things, but that's it."
Pickett, a conservative Democrat, said it was hard enough to get his colleagues to support a bill that would draw funds from a growing surplus in the oil and gas severance tax. He is skeptical of the chances of a measure involving increases in fees or tax rates.
"I don't know about finding more revenue that's going to hurt a little bit," he said.
Houghton, Hammond of the business association and Tony Bennett, president of the Texas Association of Manufacturers, all said that's what's needed in a state that hasn't increased the gasoline tax since 1991.
To deal with part of the problem, the business association at the start of this year's legislative session called for a $50 increase in vehicle-registration fees.
Rep. Drew Darby, R-San Angelo, proposed a $30 increase, but withdrew his bill after Perry threatened a veto.
"We generally agree with the governor, but on this, we respectfully disagree," Hammond said.
Carona, chairman of the Senate Business and Commerce Committee, did not mention Perry by name. But he said he was frustrated that with some Texas leaders, politics trumps policy.
"We've seen an environment where personal political ambition has gone ahead of good public policy," he said. "We just cannot afford that kind of politicization."
But Perry's spokesman said the governor stepped up to the plate by supporting constitutional amendments for water and roads.
"In order to continue our state's economic momentum, we needed to take bold steps this session to allow us to keep up with our growing population and the need to move an increasing amount of goods to market," Havens said, later adding that with voter approval, the legislation "creates a new funding mechanism to support water-supply projects over the next 50 years and identifies a long-term funding source that provides approximately a billion dollars each year for transportation.
"Most importantly, all of this was accomplished without raising taxes. As the governor said, this sends the strong message that Texas knows how to keep the wheels of commerce moving while protecting the taxpayers of this state."
Pickett said some of Texas' road and water-funding problems pre-date the governor.
In 2003, two years into Perry's governorship, Pickett authored Proposition 14, in which voters authorized the state to issue $6 billion in transportation debt.
"The reason we did that was to play catch-up," Pickett said, explaining that the state's needs had become so great that revenue increases weren't enough to address them.
For example, a penny increase in the gasoline tax is estimated to generate an additional $100 million a year -- not much compared to the $5 billion a year Houghton says is necessary to unclog Texas roads.
Since then, the Legislature has put more road projects on the credit card instead of finding new revenue. In 2009, it issued $5 billion in additional transportation bonds and then authorized debt on top of that, Pickett said.
All told, the measures max out the state's $17 billion debt capacity for its highways, Pickett, former chairman of the House Transportation Committee, said.
"We've been living on borrowed funds," he said.
Houghton said Texas highway funding has fallen victim to strong anti-tax forces in the Legislature.
"Just to say no to everything is irresponsible government," he said.
The rise of the Tea Party movement in 2010 has been identified with the latest push to cut government spending and slash payrolls.
But Michael Openshaw, co-founder of the North Texas Tea Party, said his group is not to blame for political leaders' difficulty in finding money for infrastructure needs such as water and transportation.
He said his group hasn't taken a position on the constitutional amendment for water funding that will appear on this November's ballot -- much less the transportation amendment that will be on the ballot in 2014. He said he had his doubts, however, that Texas needs $2 billion for water projects.
"Water is essential, but you can't make water out of money," Openshaw said.
In terms of the annual billions officials say they need for roads, Openshaw said he would need to be convinced the state had rooted out waste, fraud and abuse elsewhere before he would support a tax increase.
"If you do a full, business-style analysis, you will find billions," he said.
Openshaw said waste likely could be found in the state's Health and Human Services budget, but it was unclear that if any was found, it would amount to more than a fraction of what officials say the state's infrastructure needs are.
Openshaw also said he would want the transportation department to find the kinds of efficiencies that would result in job cuts before he would support a tax increase.
"This is a small thing, but you tell me we need $4 billion, but you're building rest areas with staffing that makes them look like tourist-information centers," he said.
Pickett built a provision into the measure that passed earlier this month that requires the transportation department to find $100 million in annual efficiencies and use the money to pay off debt.
Similarly, he said that in 2015, as lawmakers try to find new road funds, a wise first move would be to earmark any new money to retire existing road debt.
"If they want to be conservative, they can start by attacking the debt," he said.
As lawmakers seek new funds under a new governor, Perry is not likely to pay much of a political price for the state's infrastructure problems if he seeks the GOP presidential nomination, said Henson, the University of Texas political scientist.
Texas might be "an outpost on the far-right of the national Republican Party," but passage this year of the water and transportation measures will give Perry cover as he tries to soften his image for a national audience, Henson said.
Marty Schladen may be reached at firstname.lastname@example.org; 512-479-6606.
(c)2013 El Paso Times (El Paso, Texas)
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