October 2009 Cover Story

State Senator Dan Patrick Speaks on the Legislative Session and the Gas Tax.

The Houston Contractors Association was pleased to welcome Texas State Senator, Dan Patrick as our guest speakers at this month’s luncheon.  Senator Patrick thanked the contractors for allowing him to come out and address the group today and said that he would discuss this past legislative session, the upcoming session and the governor’s race. 

Looking at the past legislative session, Senator Patrick stated that Texas came into this last session with about $6 billion in the reserve account. Going into this next session the Senator stated that they estimate the state will have about $9 billion in the rainy day fund.  The increase was due to some Federal Stimulus package money.  By the time that the Senate gets back up and running in 2011, Senator Patrick said that they are anticipating having to spend all of that money right away to cover an anticipated $9 billion shortfall.  The reason for the deficit is due to the economic conditions that have caused declining sales tax revenues, $4 billion that must be set aside for the 2006 property tax cut and increased Medicaid spending.    Senator Patrick said that Texas is in sound financial shape right now, but in 2011 it will be a tough session dealing with the finances.

According to the Senator, Texas has an opportunity to lead the nation in everything from medicine, education to infrastructure.  This is possible because of the 1500 people a day that are moving to Texas.  Senator Patrick stated that today there are 23 million people in Texas, estimates say that by 2040 there will be 50 million people calling Texas home.  When the economy turns in the next few years there will be tremendous growth in this state, and that is good for business.  The Senator said that what we need to do over the next several years is make sure that we have good elected officials who are serious about business and growing our economy.  Senator Patrick noted that with a state that is going to double in population over the next 30 years that brings with it great opportunity and great challenges.  Roads are going to be one of those challenges. 

To get a sense of the size of the Texas economy, according to the Senator, despite the economic downturn, Texas still has an economy that is larger than Russia, India or Mexico.  He also reminded the audience that if you think thirty years is a long way away, then you need to remember that thirty years ago he was working as a sportscaster for channel 11 and Earl Campbell was a running back for the Oilers.  That wasn’t that long ago.  Senator Patrick also pointed out that since the legislature meets every other year, that is only 15 sessions, and because they only vote on bills for two months in every session that is only 30 months.  This creates a real challenge for elected officials where the legislature is not a full-time body.  The State passed a budget during the last legislative session totaling $180 billion.  This budget was passed by 150 house members and 31 senators all of which are part time officials who make $600 a month.  According to Senator Patrick there are not enough people who understand the budget, there are not enough business people in the legislature, and there are too many attorneys.  Texas needs to find elected officials that have a vision, have a plan and put the next generation ahead of the next election.  The Senator said that if Texas can do this, then we will be a juggernaut that will lead this country while other states are going broke and losing population.

Senator Patrick stated that during the last session he went in with an agenda of about 20 major bills and 20 secondary bills.  Of that number fifteen were passed. One of his key bills that passed required that there be a backup power generator at every water district.  During hurricane Ike approximately 28% of the water districts were out of water.  Even the City of Houston was within 24 hours of being without water.  As the Senator put it, “We can do without air conditioning and lights but we cannot do without water.”  There was no backup generator at the Trinity River station and only by an emergency executive order from the Bush administration were we able to re-route power to the station and keep it operating.  Because of his bill all MUD districts are now required to have backup generators at their facilities.

Changing topics, Senator Patrick stated that one of the issues that we need to address is education.  The Senator is the Vice Chair of the Education and Higher Education Committee in Austin and according to him we need to work harder to prepare our workforce for the future.  According to Senator Patrick, approximately 30% of Texas students do not graduate from the ninth grade and when you look at the State’s largest school districts, Houston, Dallas and San Antonio, that number increases to 70%.  Texas cannot survive as a state without addressing this issue.  The State has also made a move to go back to more career, or vocational training classes.  According to the Senator, not everyone needs a four year degree, and we need to prepare young people who are leaving high school for either education or a career.  Senator Patrick said that the State needs to find a way to reach out to young minority residents and teach them a skill if they don’t want to go to college.

Senator Patrick next moved on to the issue of transportation in Texas.  The Senator admitted that at another meeting recently, he was correctly overheard as saying that he was in favor of raising the gas tax.  “Being a Republican and being a conservative doesn’t mean that we should be against everything, we should be for the right things” said Patrick.  Looking at the State budget it becomes clear why there is so little money for roads, 83 cents of every dollar brought in by the State goes to education and healthcare.  According the Senator Patrick, 50 cents of every dollar goes to education and 33 cents goes to healthcare and that number is rising rapidly.  In 2003 Texas spent $35 billion for healthcare and this year the budget is $60 billion.  The Senator stated that voted against the special gas tax in this last session that increased taxes only in Harris County.  That bill died in session.  That bill would have put gas stations in Harris County at a disadvantage, especially those that are on the border next to gas stations in other counties.  The Senator stated that we have one of the busiest ports in the country, but we have trouble getting the goods out, to fix that we have to have roads for commerce and for commuting.  The best way to address that problem is to increase the gas tax state-wide by one to two cents and then index that to inflation. The indexing would equate out to about a one cent increase per year.  The Senator stated that the gas tax has not gone up or been adjusted for inflation since 1991.  Also remember that out of the 20 cents that gets allocated to road construction, the state takes five cents and give it to education and another three cents goes to the Department of Public Safety.  This gas tax increase will not solve all of the problems stated Patrick, but it begins to solve them. 

Senator Patrick addressed a question from the audience about who will be the next Governor of Texas stating that he is supporting Rick Perry but that he is not anti Kay and that if Kay wins in the primary he will support her in November.  Kay has to make a decision before the deadline stated Patrick, there are 50 to 70 officeholders in the pipeline who don’t know what to do and can’t do anything until she steps down.  As an example he said that if she steps down before the end of the year, then David Dewhurst will likely get the appointment to fill her position.  Greg Abbott becomes the next Lt. Governor that opens up his spot and for every spot that comes open, there are at least three to four people looking to fill that spot.  It creates a domino effect, but that can’t start until she steps down.  The Senator stated that she needs to make a decision so that people can plan their futures and begin setting up for a campaign or not.

October 2009 V.P. Report

Mayor’s Race Update

With election day literally right around the corner, the only people that are willing to voice an opinion on who is going to win the mayor’s race are the candidates themselves.  Even the political talking-heads that make a living studying every socio-economic aspect of the voting public are not venturing a guess on this one, it’s just too unpredictable.  The reason why you ask?  Because the top three candidates in the race are all democrats that for the most part share similar positions on many of the issues, and there is no legitimate republican candidate to challenge them.  Sure Dan Morales is supposed to be the “Republican” in this race, but he hasn’t been able to raise any money, he has little if any name recognition, he is not a great public speaker, his issues are dated, and I’m not even sure if he has the support of the local Republican party.  He’s a nice enough guy and all, but he is out of his league in this race and everyone knows it.  Without a credible republican candidate to challenge the democrat contenders, there is no partisan polarization of the race, no us versus them mentality to rally the base around…it’s just “them”.  This leaves 30% of the voting public with no horse in the mayor’s race and everyone is wondering what will they do? (According to Richard Murray, Director of Surveying with the University of Houston Center for Public Policy, the largest voting blocs in the city are white Republicans and black Democrats and each make up about 30% of the total vote during a typical election.) So will the Republicans stay home and not vote, skip the mayor’s race and vote down ballot or will they vote for one of the Democrats?  Nobody knows, but every candidate is doing their part to reach out to the west side in the hopes of gathering up as many of those votes as they possibly can. 

According to the last study I saw the number of undecided, likely, voters was at about 45%.  That is a huge number of people to be undecided this late in the game.  Unfortunately the recession has had a profound negative impact on the everyday lives of people making them less interested in local politics and more focused on their businesses and the household budgets.  The recession has also greatly reduced the flow of political contributions into the campaign coffers and thereby reduced the candidates ability to get on T.V. and introduce themselves to the voters.  That is, all except Peter Brown who is largely self-funding his campaign, so far to the tune of about $2 million.  It will be interesting to see how much that T.V. coverage will get him at the polls come election night.  And while most people gripe about political campaign ads cluttering up their T.V. viewing time.  It is through these same ads that people learn about the candidates.  No ads equals no public interest.  There is also one more drag on the voters and that is what’s being referred to as Obama burnout.  The presidential campaign went on for such a long time and was so energized that now people are tired of politics and want to get back to their normal lives.  Add all that to the apathy being felt by white conservative voters and you get an election year that no one seems to care about. 

Again we come back to the question of what with the Republicans do come election day?  I think that it is safe to assume that there will not be one big winner of this block of votes.  Some will stay home, some will skip the mayor’s race and some will vote for the other candidates.  Peter Brown has the T.V. ads to reach the masses is they watch, Annise Parker is working the female connection and has made inroads through the Republican women’s groups and Gene Locke has the well healed political connections of Bob Lanier to guide him into the conservative business community.  It will be interesting to see how the numbers play out on election night and later as well to see which parts of town actually turned out.

Disparity Study Update

Nothing has happened since last month’s report.   Everyone is still waiting for City Attorney Arturo Michel to make an announcement on which company he is going to recommend to Council to receive the contract to do the study.  I suspect that announcement will be coming at the end of the month at the Council MWBE Committee meeting.  Until then we are all on hold awaiting a decision.

Management Conference

Finally I would like to thank everybody who attended this year’s management conference in Paradise Valley, Arizona.  Harris County Judge Ed Emmett was our keynote speaker at the event and gave a detailed presentation on the state of the County, road construction and mobility in the future and ways to increase funding to TxDOT.  The resort itself was very nice and very relaxing with a wonderful atmosphere that encouraged everyone to have a good time.  Special thanks goes out to our sponsor Rush Equipment for putting on the Texas v. Texas Tech Tailgate Party on Saturday night.  That was a great event enjoyed by all, some more than others.  Thanks again to everyone that went on this trip, and I hope to see you all in the Cayman’s next year.

September 2009 V.P. Report

 Disparity Study Update

Little has changed since my last report on this issue. The City has narrowed its choices of study providers down to two companies, D. Wilson and Nera. At a recent stakeholders meeting, City Attorney Arturo Michel stated that he has been looking carefully at both bidders, but was leaning toward Nera. His prime issue, according to Michel is both companies’ responses to the question of how they would address the issue of the Rothe case. In short the Rothe case stated that company capacity must be taken into consideration when studying disparity. D. Wilson stated that they would comply with the law and include capacity in their calculations. Nera on the other hand stated that they disagreed with the Rothe ruling and claimed that capacity was covered through other aspects of their study. Mr. Michel further expounded on the issue stating that he agreed with Nera when they said that, in their opinion they felt that the defense incorrectly argued the capacity issue in the Rothe case. HCA has sent a letter to Mr. Michel and the mayor stating that we strongly disagree with Nera’s reasoning and reminded them that capacity was a key issue that we had with the original disparity study. It is HCA’s position that no study can be complete or accurate without thoroughly reviewing a company’s capacity to do the work they claim they can do. Mr. Michel has responded to our letter with a letter of his own stating that he understands our position, that in his opinion we disagree on what the law is, and provided a list of cases that contradict the finding of the Rothe case and support his position. It is expected that Mr. Michel will make his selection public at the next MWBE Council Committee meeting at the end of the month.

Pay or Play Round 2

Earlier this month Velma Laws, Director of the City’s Affirmative Action Committee and overseer of the pay or play program for the city held a town hall style meeting to review the program. The meeting was called on behalf of Elena Marks, Director of Health and Environmental Policy office of the mayor at the request of two concerned citizens who have been attending the MWBE committee meetings. These citizens have attended the last several meetings and made claims that contractors are forcing employees to sign the opt out waivers allowed in the pay or play program and are pushing for a removal of this option and mandatory compliance by all contractors. HCA had worked to have the opt out policy put into to program to protect contractors from being punished for employees who do not want accept the insurance offered by their employer. Did I happen to tell you that these two "concerned citizens" both work for the same insurance company and are offering a special policy that perfectly meets the city’s requirements. I need to stop here and thank everyone that showed up at the meeting on behalf of the contractors. HCA had put out the call for attendees and our members made up approximately two thirds of the room. The only advocates for increased regulation of the program were our two "concerned citizens" and their employer who, by the way helped start the pay or play program and openly admitted dismay that there wasn’t more participation in the program. In the end what Velma hosted was a smaller version of the national town hall meetings on healthcare and what she got was the same basic outcome. We got our point across, but I doubt that there were any minds changed on either side and the fate of the program still lies in the hands of the bureaucrats who run it. Remember this is an executive order from the mayor and was never voted on by city council. On the positive side we did find out where the money collected by the program is going. A representative of the Tri-County Healthcare Alliance informed the audience that they had been given over $600,000 to set up a nurses triage phone bank and a third party insurance provider system that will be rolled out in October. The phone bank will be used to intercept non-emergency callers who are requesting ambulance service and try to convince them that they don’t need an ambulance if it is not a serious or life threatening injury.

E-Verify Begins

In case you missed the article in the paper earlier this month, the feds have begun implementing the e-verify regulation on federally funded projects as of beginning of this month. For those that don’t know about the e-verify system, it is a web based program designed to check an employee’s documentation against government records to see if the employee is legally in the country. Any company receiving a federal project will have 90 days to verify any new hires and all workers assigned to work on that project. This system is designed to replace the standard procedure of reviewing I-9 forms and social security cards.  According to the article in the Houston Chronicle, it is not clear if the new regulation applies to all contractors working on a federal job, or if it only applies to the prime.  There are also some exceptions including contracts that are under 120 days or less than $100,000.  The article also mentioned that the Department of Homeland Security notified 652 companies across the country including 26 in Houston of plans to audit their immigration and employment paperwork, marking a major increase in worksite enforcement.  Contractors need to take note of this and realize that you could be audited next.

Commissioner Eversole’s Seat

Council Member Toni Lawrence has formed an exploratory committee to look into the possibility of running for the Harris County Precinct 4 position in the November 2010 election.  The current District A City Council Member is term limited after this year and is looking to possibly replace incumbent Commissioner Jerry Eversole.   Council Member Lawrence recently changed her residence to be within the precinct and has now begun making overtures toward the seat.  Council Member Lawrence was quoted in a September 10^th Houston Chronicle story as saying that while she believed that Eversole had worked diligently on Commissioner’s Court over the last twenty years, she expressed her views that it was time for a new Republican voice in Precinct 4.  Commissioner Eversole has been under investigation by the FBI, State and local officials alleging inappropriate use of campaign funds, however there has been no official charges filed against the Commissioner that I am aware of.  Commissioner Eversole has not yet stated if he is going to run for re-election, but rumor has it that he is considering it.  The rumor may be true considering the news coverage has died down, nothing has come out about the investigations and Eversole is still very popular in his precinct regardless of the ethics scandal.  Also keep in mind that Council Member Lawrence is not the only person interested in the Precinct 4 seat, Larry Lindsay son of ex Texas Senator and ex Harris County Judge, Jon Lindsay is interested in the position.  As is Court Koenning owner of Koenning Consulting a private consulting firm here in Houston and Chief of Staff for Texas Senator Dan Patrick.  Mr. Koenning also served as the Executive Director for Harris County Republican Party.  This is a race in its infancy and should be interesting to watch, however the question that needs to be answered before anything can get moving is will Jerry Eversole run?  Only time will answer that question.

HCA Day at Minute Maid Park

HCA completed its fourth annual HCA Day at Minute Maid Park where the Houston Astros played the Milwaukee Brewers, unfortunately losing in the end 12 to 5.  I want to thank all of the attendees that came out to the game.  HCA took up over three entire sections of Minute Maid Park with our cheering fans.  This was a great family oriented event with hot dogs, hamburgers and soft drinks provided.  I want to personally thank this year’s sponsors for contributing to this event and making it the success that it was.  I want to recognize our “Grand Slam” sponsor ACT Pipe and Supply for their generous contribution and also our “Home Run” sponsors Boyer Inc., and Slack & Co. Contracting, Inc.  Congratulations also go out to Alicia Jimerson with Jimerson Underground.   Alicia won the ACT raffle drawing during the game and was presented her prize, a $200 gift certificate to Vic & Anthony’s Steakhouse, by ACT’s C.E.O. Harry Kirk.  I also want to thank Rob Harmel with Sign & Supply for donating all of the sponsor signs for this event.  This was a great outing with an unfortunate ending for the Astros I am sad to say, but a good night out with friends and family and I hope to see you all back again next year.

September 2009 Cover Story

Mayor Bill White Speaks on Infrastructure at Joint HCA/ASCE meeting

Mayor Bill White was the guest speaker for this year’s joint meeting between HCA and the American Society of Civil Engineers (ASCE).  This meeting has historically been one of our best attended luncheons of the year and this year was no exception with 260 attendees filling the room to hear Mayor White talk about the Houston economy and infrastructure in the region.

Mayor White opened his remarks by commenting that the economy in Houston is going to get worse before it gets any better, and that statement was truer in January than it is today.  According to Mayor White we are closer to the perceived bottom.  The common mistake that people make in times like this is to underestimate the length of an economic downturn.  People are naturally optimistic stated White, but the fact of the matter is that this is a global economic recession and no law passed by any country will be able to repeal the human behavioral laws of fear and greed which cause economic cycles.  This is a classic case of a credit contraction and those usually take a while to work themselves out.  The good news is that this is not forever, this is only a cycle and there will be an uptick eventually.  Houston will come out of this more competitive than ever according to Mayor White.  He stated that the reason for this is because Houston has an affordable cost of living, a good business-oriented culture, and is a younger city with a cleaner, better government.  The Mayor stated that Houston’s leaders have taken the steps necessary to protect the city during hard times where some other cities have stuck their heads in the sand and are now suffering for it.  He gave the example of the current problems in California where businesses are migrating out of the state to other, more business friendly environments because the civic leaders did not recognize the financial problems that they had or the burdens they had placed upon their residents.

Mayor White moved the conversation to infrastructure and broke it down into short, medium and long runs.  In the short run the Mayor recognized the work done by Mr. Marcotte as Director of the Department of Public Works and the General Services Administration for the number of grant applications that they have submitted for stimulus funding.  Mayor White stated that when it comes to infrastructure the principal funding instruments are grants from the federal government that are allocated to groups such as the water board and TxDOT.  Some of those funds are then allocated to regional councils of government.  There are no direct allocations to municipalities.  Mayor White stated that if he is lucky enough to continue his political career in Washington D.C. one of his main priorities is to see that there are more direct allocations to the entities that are actually contracting for the work.  This creates more accountability and prevents bureaucrats from being able to siphon off funding before it reaches the contractors.  Mayor White went on to state that he had concerns with how the stimulus money was managed especially saying that while they were well intentioned, those in charge of the funds did not understand how infrastructure projects are funded.  The Mayor pointed to the requirement that stimulus projects be shovel ready but not have any funding allocated to them.  The Mayor questioned the logic of why anyone would design something with no intention of building it. He also called on representatives of both HCA and ASCE to help in Austin and in Washington D.C. to get Houston its fair share of infrastructure funding.  Mayor White stated that infrastructure funding is political, although it shouldn’t be, and the more voices we get calling for funding in Houston, the more projects that can be put out.  He also asked that we keep an eye on projects where funding has been allocated but the money hasn’t been spent yet.

The Mayor next addressed some issues within the City budget stating that the City had maintained a robust CIP program.  The overall CIP in the water/sewer program increased, in the general fund programs has mostly been flat.  He noted that Metro will be sharply up over last year.  Mayor White stated that there will be belt tightening over all parts of the budget.  Looking at the long run Mayor White stated that there are few things that you need to keep an eye on.  The first thing is the public policy agenda concerning infrastructure funding.  The mayor stated that for the first time the city has built into the budget a defined allocation for drainage projects.  This allocation increases the amount of funding for those projects from a fraction of a cent of the ad valorem taxes to about .57 cents.  The Mayor stated that when he got into office, getting water from the neighborhoods into the bayous was a major problem and severely underfunded.  The ad valorem tax is a tax that is collected every year and is based upon property evaluations and as contractors we need to work to protect that allocation in the future.  The next item to keep an eye on according to the Mayor is general mobility funding.  This funding is provided by Metro that goes to road projects in the area.  Mayor White said that in the future there will be a debate over how much of that money should be spent on general mobility versus transit.  This is a fair debate however experts in traffic engineering need to weigh in to make sure that the outcome is proper for the community. 

Mayor White also commented that there was another trend that we need to keep an eye on that he said may be a good thing but more likely will be a potential threat to the most cost effective use of infrastructure money.  That threat, according to the Mayor is the creation of tax increment zones that are not project specific and cover large areas.  There are many tirz’s around the city stated White, started by the prior administration and they have a wide variety of purposes.  The Mayor continued saying that what tends to happen is the tirz caps the amount of ad valorem tax that is available to the city from some of the fastest growing areas, and limits the funds available for our general fund purposes.  Areas such as the Central Business District or the Galleria area are good examples where the money that goes back to the city is capped at a level set ten years ago.  Mayor White stated that there could come a time when all of the growth could be within the zones.  He was quick to remind everyone that this is the only source of funding for the general fund.  On the good side the City has been leaning on the tirz’s to move forward and to get their money spent.  Mayor White said that there are some that have very ambitious capital improvement programs, however there are some tirz’s that have other purposes such as the removal of blight or building redevelopment and that money is not being fully utilized.   Mayor White stated that he is concerned about the possibility of a city where there are multiple tirz boards with substantial budgets that may or may not have the best interests of the city as a whole at heart.  He also mentioned the possibility that these boards could become less than transparent in their bidding process.

The Mayor closed by saying that Houston is doing good.  He recognized that these are tough times because of the downturn in private development market, however he noted that there is capacity in the Toll Road Authority and in Metro to do an expansion of the infrastructure.  He stated that it has been a pleasure working with the people of this group, and said that he wishes everyone could see the this city through his eyes.  He stated that he sees construction sites not as an obstruction, but as a real public improvement.  He has seen the benefits of construction throughout the city by making improvements to such things as improved traffic flow, storm water drainage or cutting the number of sewer line breaks.  If everyone could see the city the way I do, said White you would appreciate even more deeply what a wonderful city of opportunity Houston is.

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August 2009 Cover Story

TxDOT Executive Director, Amadeo Saenz, Jr. Talks About the Future of Construction in Texas

HCA welcomed for the first time as speaker, Mr. Amadeo Saenz, Jr., Executive Director for the Texas Department of Transportation.  Mr. Saenz thanked HCA for the opportunity to address the group and recognized his local district director, Delvin Dennis for the outstanding job that he has done in taking over the Houston district.

Mr. Saenz began his presentation with a discussion on the Grand Parkway stating that TxDOT has been working very closely with the Harris County Toll Road Authority (HCTRA) on the development of the Grand Parkway.  One of the things that TxDOT wants to accomplish is to see the Grand Parkway constructed as one project.  This is important to TxDOT because, in theory with it passing through seven different counties, you could see seven different construction projects and seven different types of development.  Two years TxDOT ago worked through the legislature to create SB792.  This bill set up a mechanism to develop the Grand Parkway as one project where each completed section would help to develop the remaining sections.  HCTRA has the right of first refusal and they have been working with the other six counties on this project, however come September, if the County Judges decide not to do it, then TxDOT will already has a plan in place.  According to Mr. Saenz, if TxDOT builds the Grand Parkway it would be constructed in a similar format to that proposed by HCTRA.  Mr. Saenz stressed to the contractors in the audience that there will be an open procurement on this project and that they want as many contractors as possible to come forward to bid.

Mr. Saenz next asked how many contractors in the audience were certified as a DBE, SBE, WBE or certified to bid on TxDOT contracts?  The response from the audience was light to which Mr. Saenz stated that if you wish to work for TxDOT, and fall under one of those categories, TxDOT has a mechanism for you to get certified.  Being certified is the only way that you can work on TxDOT projects either as a prime or a sub.    To bid on any TxDOT project you must be certified and TxDOT is actively looking to increase its number of certified contractors at all levels.

Mr. Saenz moved on to cover a few things that came out of the last legislative session.  Amadeo stated that the legislature was considering a couple of things that were important to his department.  One was the setting of the state budget and of course TxDOT’s portion of that money and also the conclusion of the sunset legislation for TxDOT.  Mr. Saenz said that he felt certain that the Department of Transportation performed an important task and would be continued.  Unfortunately, according to Mr. Saenz, any bill that was behind the voter I.D. bill didn’t go anywhere.  Mr. Saenz stated that they had worked with both houses and come out with a good bill that addressed issues concerning transportation, department operations and the structure of the department as a whole.  However the voter I.D. bill was never resolved and the session ended without the TxDOT sunset bill being approved, therefore the department went into the wind down process to close the department.  Luckily the governor called a special session in which the legislature passed two bills; one gave TxDOT an extension of two years, basically keeping TxDOT under the sunset review for an additional two years. The second bill authorized TxDOT to issue $2 billion worth of general obligation bonds that had been previously approved by the voters.  This will allow TxDOT to have one billion dollars in infrastructure bank and $2 billion for infrastructure projects.  This money will not solve Texas’ transportation problems, according to Mr. Saenz, when you look at the transportation needs of the state, that money is about one year’s worth of work that you can advance.  The Chairman of the Department of Transportation put together a committee called the 2030 Committee whose purpose was to study the future transportation needs for the State of Texas.  To do this they needed to find out what it would take to maintain the roads and bridges that we currently have and also what is the investment that is needed to keep the State competitive with other states in the nation.  The committee determined that between now and the year 2030 the state needed approximately $313 billion to address the needs of the state.  Broken out, that comes out to $14 billion a year.  Texas spends between $3 and $4 billion per year on the highway program currently for construction and maintenance.  What that means is that right now TxDOT does not have the resources to cover the needs of the state.  Mr. Saenz stated that we need to start working together to determine where new funding sources can be found that can help us solve this problem.  Mr. Saenz stated that he has begun working on the legislators, trying to educate them on exactly what it takes to keep Texas moving and how much that will cost.  You don’t get everything you want in one session said Saenz, so we have started laying the groundwork for the future. 

Another issue that TxDOT was interested in addressing during the last legislative session was how much money was being taken from the state highway fund and used for other agencies like DPS, Health and Human Services and Medical Transportation.  Mr. Saenz stated that he was able to reduce that amount this year by $365 million.  There was a lot of movement in this last session to keep the transportation money for transportation.  Mr. Saenz says he thinks that push will continue into the next legislative session because the hole for meeting the transportation goal is getting deeper by the year.  Mr. Saenz stated that he is about $2 billion down this biennium as compared to the last session.  TxDOT is also working to get stimulus money to do a feasibility study for two high speed rail corridors in Texas.  One corridor runs along interstate 35 and the other runs from Houston toward Baton Rouge.  They are currently looking into ways to connect the two lines.

Federal issues.  Congress is working on a new re-authorization bill for the disbursement of the gas tax.  Congress has a draft bill out now that would increase the funding from the current $225 billion over six years to $500 billion over six years.  Unfortunately a closer examination of the bill shows that there is less money in that bill for highways than there is in the current bill.  Mr. Saenz stated that he does not think that this is the bill that will make it out of congress, however the current bill is ending soon and a replacement needs to be found.  President Obama is on record for extending the current bill an additional 18 months to give his administration time to get up to speed on the issue.

Mr. Saenz closed by noting that when gas prices rose last year to $4.00 per gallon we started seeing big changes in peoples habits.  Gas guzzlers were being replaces with fuel efficient vehicles, car pools increased and people who had never used public transportation before began using it.  The interesting thing according to Saenz is now that the gas prices have dropped we are not seeing a return of people to their private vehicles.  According to Mr. Saenz people have identified ways to save money and therefore there has been a corresponding drop in the motor fuels tax revenue brought in by the state.  According to Mr. Saenz, revenue is down about 2.5 % compared to historical data.  That equates out to about $50 to $60 million a year less.  According to Mr. Saenz, we need to find a replacement for the motor fuel tax as the revenue source for TxDOT and find something more reliable.  Across the country there are several new approaches to funding our highways.  One is a motor vehicle miles per gallon tax that is being looked at in Seattle.  This proposal would tax drivers based on the number of miles that they drive.  Mr. Saenz says that he believes we will see a change to something like a vehicle miles per gallon tax in the near future.

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