House Appropriations met on October 26 to hear invited testimony only on an update from the Broadband Development Office, an update on the Unified Transportation Program, and an overview of select agency Legislative Appropriations Requests.
This report is intended to give you an overview and highlight of the discussions on the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.
Opening Comments
- Chair Bonnen – Working update on broadband map and different funding sources,
- Office of the Governor and LBB have been holding joint budget hearings; hearing a couple today and is the first step in the Appropriations Act in May
Update on the Unified Transportation Program
Mark Williams, Executive Director TxDOT
- Prop 1 and 7 passed in 2014 and 2015 dedicated more than $30b in active construction
- FY 2022 awarded $10.6b in new highway improvement contracts
- Anticipate exceeding this in FY 2023
- $85.1b this year’s UTP plan in projected transportation funding over the next 10 years
- Now have additional revenues from Props 1 and 7 (2014 and 2015) in addition to the Federal Infrastructure Investment and Jobs Act funds
- Issues from supply chain disruptions, high inflation, and higher than expected costs for projects
- Federal Highway Administration showed construction inflation has increased over 20%
- After passage of IIJA the DOT has gone beyond the bill’s intent with adding additional requirements like “green” requirements
- TxDOT is not maintaining necessary staff to deliver projects; last year attrition rate is highest since that data was collected
- Need to modestly build staff; will request additional staff in exceptional items of LAR
- Total $37b requested upcoming biennium; 88% of dedicated funds for maintenance, project delivery, and planning
- Are keeping an eye on changes and impacts of dedicated funding for future exceptional items
- November 7 of 2000 was the last day we had a deathless day on Texas roads; saw an increase over the last couple years
- Williams overviews the history of the UTP and the project requesting process after Walle asks
- Walle – Alternative opportunities for transportation like rail, hiking and biking, etc. focus of agency?
- Are looking at that; new federal funds under IIJA for TxDOT and MPOs for these projects
- Are active in the rail process; are constitutional guardrails for these types of projects, but try to address needs
- Dean – Asks about inflation; have a number required to make current project list whole? Need to get this together before we consider future projects
- Will get that information to you
- Dean – What are the $2.5b in energy sector projects in the UTP? Includes county funds?
- Jessica Butler, TxDOT – Large amount of funds are going to preservation and safety; no
- Howard – Asks about changes due to Props 1 and 7
- $11.5b increase in the size of overall from last year; contributions from Props 1 and 7 and IIJA are equally balanced
- Expect UTP will grow more due to recent Comptroller estimates of Prop 1 and 7 growth along with TMF funds
- Howard – Helps balance inflationary costs?
- Some, but not sustainable
- Stucky – Have a local project in Denton where a route was chosen without homeowner input; at what point are homeowners notified of public hearings?
- Districts with local city/county governments
- Toth – Notes a 242 project that fell apart and issues with I-45; if elected officials could be brought in sooner, could prevent some of this
- Will
- Toth – Highspeed rail, what kind of involvement has TxDOT had since 2013?
- Primarily in coordination; environmental work and study efforts administered under FRA
- Toth – Notes lobbyists came in during 2013 and said public funds and private land would not be taken; has not been the truth
- Toth – If this project fails who takes it over? What would the cost be?
- Possible that TxDOT could if it got to that point
- Toth – Need to know that figure now
- Will look into it
- Butler discusses pedestrian safety addressed in projects after Thompson noted the amount of pedestrian fatalities/injuries in communities
- New $500m captured to cover those types of projects
- Thompson – Would like to see more money in funds at a local level
- Schaefer – Electric Vehicle Infrastructure Plan; TxDOT will receive a lot of these programs?
- Yes
- Schaefer – What will those funds be used for?
- Several hundred million over the next few years; charging infrastructure along key corridors and each county seat
- Contract for installation and maintenance and local match would come from those agreeing to operate and maintain that infrastructure
- Federal share of cost would be 80% of installation; would be reimbursable with a competitive selection process
- Schaefer – Who would own it?
- Still working through that; could be local convenience store, most likely would not be owned by the department
- Schaefer – Federal or state government is not involved in building gas stations or choosing where they are built
- Schaefer – Should be concerned that the government is intertwined with convenience stores around the state; concerned about data collection
- If this project presents risks, it possible we would pull out
- Wilson – Could share written analysis of this bill? Could get to us?
- Spent a lot of time going through the IIJA; regulation process is still evolving
- Wilson – Specific call out of I-14?
- Not sure, will look into it
- Wilson – IIJA funds expire when?
- Butler – 5 years, started in 2022
- Wilson – Been any though of raising fees on overweight trucks?
- Has been part of committee conversation, but would be legislative decision
- Wilson – SURVEY?
- C. Bell – Some places do not have the grid availability for electrical charging stations; part of the plan that contemplates expanded need for power?
- Yes
- C. Bell – Have the responsibility to not exceed demand
- Dean – Estimated $480m from feds to pay for those charging stations and do not have the power for it; their answer is we have to use all renewables and build a $1b power plant
Jessica Butler, TxDOT
- Overviews the UTP’s purpose; is the 10-year plan for transportation projects across the state
- Authorizes TxDOT and partners to start transportation projects; is a cash forecast
- Held UTP public meeting July 7 and held a public comment period
- Totals $85.1b; combination of federal and state funds and 40% is from Props 1 and 7
- Will spend additional $24.8b for project development activities, $7b in routine maintenance through separate funding strategies
- Approximately will spend $110b in projects
- Historic $14b distributed to rural districts – is 16.4%; are 7k plus total projects
Update from the Broadband Development Office
Greg Conte, Director Broadband Development Office
- State Broadband Plan published in June
- Just published proposed rules and working on responses to public comment; effective mid-December guardrails on how the program will operate
- Will be accepting applications in early 2023
- For the broadband map this month closed data acquisition window; creating a location fabric for the state
- Established rules for the Pole Replacement Program this year and applied for $75m ARPA funds
- Treasury deemed ineligible use
- State designed rules in a way that broadband would need to be brought to end users to receive funding for this program
- Federal funds: ARPA funds $500.5m and TBD how much in IIJA funds
- HB 5 office was intended to be technology agnostic; NTIA recently announced funding supports fiber as a primary source
- Comptroller wrote a letter to the Texas delegation in D.C. that this was not the legislative intent of this body or of the federal legislation
- All CPF funds need to be expended by December 2026
- Federal government has signaled that 25/3 is not sufficient for broadband speed; now 100/20
- Do not know Texas’ BEAD allocation yet
- State will receive $3m to develop state digital equity plan then would receive about $70-100m to implement plan
- Will address unserved locations first, then those that lack 100/20, then will move on to community anchor institutions
- Expect overall $2-4b from the federal government
- Wilson – Asks about administrative funds used by the BDO
- All CPF funds need to be expended by end of 2026; administrative funds are to support BDO and $8m committed for mapping and contract staffing
- Wilson – How many FTEs and RFPs?
- 5 FTEs and 2 RFPs
- Ashby – Have an exceptional item request; what do you need in terms of staffing?
- Yes, exceptional item request for 18 FTEs
- Need technical engineering, evaluating applications, and contract managers
- Wilson – Who will be in charge of the broadband once federal funds run out?
- ISPs will be in charge of the continuity of the infrastructure after 5 years
- Howard – Forecast an amount that could ensure broadband connectivity at 100/20?
- Once map if finalized by January 1, will have a better idea
- Chair Bonnen – Will take an extended period of time and money?
- Yes; if take a fiber-approach will burn through the federal funds coming down
- Chair Bonnen – How fast could you deploy capitol?
- Will know once mapping is completed and know how much funding is coming our way
- M. Gonzalez – Ask for an ROI to be put together for broadband investment
- Schaefer – Any monies flowing to Starlink?
- Would need to be an applicant
- Any ISP that does not submit data cannot apply; they have not submitted data
- Schaefer – Private sector is already doing this; questions why the government needs to do this
- Chair Bonnen – Have considered geographic differences in the state?
- Yes, in the planning and mapping process
- Howard – Reliability is not there currently there for everyone; being technologically agnostic is important
- Ashby – East Texas and South Texas are millions without access to internet; market is not providing currently to them, so need to provide incentives
Overview of select agency Legislative Appropriations Requests
Jerry McGinty, Director, Legislative Budget Board
Aaron Henricksen, Assistant Director Legislative Budget Board
- Will be discussing LAR requests of agencies larger than $40m
- Have 480 exceptional items totaling $15.6b in GR
- 30 address salary/retention $1.9b, 34 IT/tech $1.7b, 40 capitol needs $4.5b
- Wilson – Asks what the purpose of this testimony is?
- Chair Bonnen – In House rules LARs are presented formally to the committee; want committee to discuss if there are questions
- Wilson – Asks about the facilitation of the joint budget hearings
- McGinty – Highlights the LAR process; analysis into these LARs continues today
- Wilson – Process to get additional information on particular line items?
- McGinty – Could get that information in a multitude of ways
- M. Gonzalez – Auditor said turnover rates last year were 21.5%; would like a full picture of population growth versus state employment
- M. Gonzalez – FY 2015 was the last year to raise salary rates for employees? Inflation?
- Henricksen – Correct; is about 27% since 2015
- M. Gonzalez – If we do not keep up with inflation, is possible employees are getting a pay deduction?
- McGinty – Correct; anticipate FTE report to come out soon to show trends
- Schaefer – Way to make information digestible to the committee? What appropriated last session versus this year?
- McGinty – If funded all exceptional items fully, would be a 13.1% increase
- $15.1b does not cover TEA and HHSC cost holders
- Dean – Notes it has been difficult to retain/recruit capitol staff; need to take a look at legislative budget in mind of inflation
- Howard – Asks the LBB to bring data to reflect the staffing issues
- Howard – Could get a figure on how to modernizing agencies’ IT systems to create interoperability?
- McGinty – Could get that to you