Keeping Texas in Business Texas has a long

Keeping Texas in Business

• Texas has a long legacy of good roads • Symbol of our economic prosperity, attracting jobs and people to the State • In part, our congestion is a byproduct of the state’s “wide open for business” successes

• Transportation in Texas is stretched to the limit, and the news gets worse • Don’t let those orange barrels fool you • In 2015, we will be out of money for new roads

At stake is the economic health of Texas INCREASED TRADE NEW JOBS/ BUSINESSES EFFICIENT SHIPPING

Business Cost of Congestion Distance traveled to connect with customers in 30 minutes Missed opportunity With congestion Without congestion

Business Cost of Congestion Commuting distance for employees in 1 hour Missed opportunity With congestion Without congestion

What do we Know? Transportation funding has not kept pace with demand

How do we pay for our roads? 2014 Revenue Debt financing has now surpassed revenue from the state gas tax

How Texas ranks National Comparison high 19 th Cost of Vehicle Ownership Vehicle Registration Fees 29 th Fuel Taxes 44 th low low

What’s the problem? Congestion in Texas each year 472 million $10. 1 billion $2. 1 billion extra hours of travel time in delay and wasted fuel costs in truck freight moving costs

How did we get in this hole? It’s all about supply and demand 125% 172% 238% 19% population vehicles highway use highway space

How did we get in this hole? Financing for our roads is stuck back in the last century $3. 08 $1. 10 Gallon of gasoline Fuel Tax Portion $0. 38 1991 2014

How did we get in this hole? Financing for our roads is stuck back in the last century $3. 41 $1. 12 Gallon of Diesel Fuel Tax Portion $0. 44 1994 2014

How did we get in this hole? Since 1991, the cost has about doubled of everyday goods So has the cost of building roads

Effective State Tax Rate Effective Federal Tax Rate 30, 0 35, 0 9, 1 8, 5 7, 2 2009 2010 2011 2012 7, 8 9, 9 8, 9 9, 2 9, 6 13, 9 13, 1 13, 6 13, 5 8, 4 8, 5 13, 6 12, 8 12, 1 12, 5 12, 4 11, 0 8, 8 7, 7 7, 9 7, 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 7, 6 13, 9 14, 8 1996 9, 6 16, 1 15, 3 1995 12, 0 16, 6 15, 7 20, 0 14, 8 17, 1 13, 3 1991 1992 1993 1994 18, 9 10, 0 18, 4 16, 2 18, 1 17, 6 0, 0 14, 1 5, 0 20, 0 25, 0 Cents Per Gallon Purchasing Power of the Motor Fuels Tax Rate Adjusted by Inflation in Roadway Construction Costs 40, 0 15, 0

The Downside of Fuel Efficiency (in MPG) Gallons of Gasoline Used 750 22 700 20 650 18 600 16 550 14 500 1991 Gallons of Gasoline Fuel Efficiency (Miles per Gallon) 24

What do we Know? Mobility will get worse –How much worse? – Depends on how much effort to address the problem

What do we Know? The Cost of Doing Nothing is High!

Just as in your Business Texas – Capital expansion doesn’t happen overnight – Maintaining current assets is imperative

Why it Matters… Over the Next 25 Years • $270 Billion investment to keep congestion in Texas from getting worse • $1 Trillion economic cost if we spend at current levels

What’s Next? Comprehensive Development Increase the Fuel Tax? Agreements? Index the Fuel Tax? Increase the Registration Fee? Toll Roads? Public/Private Partnerships? Vehicle Mile Traveled Fee? Local Transportation Taxes? Drive Less? Move Somewhere Else?

Is “doing nothing” really an option?

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