The Legislative Budget Board (LBB) published its legislative primer on highway funding. The introduction in the report notes, Texas has traditionally used a pay-as-you-go financing system in which roads are built as funding becomes available.
However, recent circumstances have increased the cost of constructing and maintaining transportation corridors and reduced the capacity of the traditional pay-as-you-go system. The Texas Department of Transportation has been given the statutory authority to issue debt and enter into public-private partnerships. The agency’s ability to use these financing tools was diminished in 2007 when the Eightieth Legislature enacted legislation that restricted the use of public-private partnerships.
The LBB report is intended to provide an overview of the financing mechanisms available to the Texas Department of Transportation to construct and maintain highways. Additionally, the constitutional and statutory requirements and historical expenditures and trends of these revenue sources are discussed. The majority of revenue sources for highway construction and maintenance are deposited into either the State Highway Fund or the Texas Mobility Fund.
Report: http://www.lbb.state.tx.us/Transportation/2011%20Texas%20Highway%20Funding%20Primer%200311.pdf