PROP 2 Investing in Our Future

Written by  AGCTX

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Texas’ Infrastructure is in Peril.

Texas’ infrastructure is in peril and this year’s drought has only compounded our problems—with lakes sucked dry, pipes and water mains bursting, and wildfires wreaking havoc on everything from residential neighborhoods to our state’s agricultural heart.

Unfortunately, water infrastructure, like that of our roads and bridges, is woefully underfunded. Texas last authorized bonding authority for the Texas Water Development Board (TWDB) totaling $2 billion in 2001. Moreover, with less than a billion dollars remaining, the TWDB anticipates its ability to issue bonds will be depleted within the next two years, maybe sooner.

Much Needed Funding for a Variety of Water Related Projects Across the State

The TWDB recently estimated1 that there is about $231 billion in need to overhaul our water and wastewater infrastructure. Yes, that is $231 billion with a “B”. While this is a daunting challenge, voters will have the opportunity to make a small dent in the problem by approving Proposition 2 (Prop 2) during the November 8 election. Prop 2 is a constitutional amendment that will provide up to $6 billion in bonds to support critical water-related projects including water facility repairs, water and wastewater projects, and flood control projects. The bonds will be issued to political subdivisions of the state: cities, counties, districts, river authorities, and nonprofit water supply corporations. These local entities will make decisions with input from local leaders and citizens.

The Most Fiscally Conservative Way to Do Business

Texas legislators from both sides of the aisle overwhelmingly supported the Prop 2 funding proposal—which includes financing that is self-supporting. The bonds would be issued only to provide funding requested by local communities and then the borrower will repay the loans. In other words, the state’s general revenue won’t be used.

Currently, many local entities would not be able to access the financing necessary to complete projects without partnering with the state. Because of the state’s strong credit rating, this funding is provided at a lower rate than traditional markets—lowering the total cost of loan and lowering the bottom line cost to the customer.

Texas Leadership—“Proposition 2 is a Crucial Step”

At September’s monthly luncheon, AGC Texas was joined by Representative Allan Ritter, Chairman of the House Natural Resource Committee and sponsor of SJR 4, the legislative vehicle for the Prop 2 bonds. Ritter encouraged AGC members to educate the public on the desperate need for long-term infrastructure investment. Ritter emphasized that a dedicated source of funding is only one component in the overall implementation of the state’s water plan which cannot be accomplished without bonding authority— and said that the passage of Proposition 2 is a “crucial step” towards accomplishing this goal for the state.

With Texas’ mounting water needs, the Prop 2 bonding authority amounts to a proverbial drop in the bucket. However, due to the failure of additional water funding legislation, it’s one of the last drops, making it all the more precious. Because of the economic issues facing many Texas communities, if Prop 2 fails, most local entities will be incapable of securing funding for water-related infrastructure. But with the passage of Prop 2, these same entities will be able to pay back their loans with the increased revenue from enhanced infrastructure and the ability to service more customers. As Representative Ritter has said, the failure of Proposition 2 means the imminent end of that partnership for water projects around the state, with or without a dedicated source of funding.

Texans Across the State Must Show Up on November 8

Reporters and meteorologists have remarked on the similarities between today’s drought and the severe drought of the 1950s—the worst in Texas history. The TWDB was created in 1957 to counteract the damage done to our water supplies from that drought— and now, more than fifty years later, it needs the approval of Texans once again to help combat the damage that population explosion, funding shortfalls, and severe drought has inflicted on our already overburdened infrastructure.

This election is critical for Texas and critical for our industry. As we know, water brings people, people bring the need for highways, and the highways bring economic development. We urge you to not only vote for Proposition 2 on November 8 but help to “get out the vote” in any way you can.

Early Voting starts October 24th and Election Day is November 8, 2011

For more information visit http://www.infrastructuretexas.org 

http://www.tpr.org/news/2011/08/news1108241.html


HELP GET THE WORD OUT! Election Day: November 8, 2011 Early Voting: Begins October 24, 2011 Ballot Language: "The constitutional amendment providing for the issuance of additional general obligation bonds by the Texas Water Development Board in an amount not to exceed $6 billion at an time outstanding." For More Information: Visit www.infrastructuretexas.org






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