The Texas Boom Puts Pressure on Infrastructure

[Subdude]

 

Americans have flocked to Texas in search of a piece of the state's booming economy as much of the rest of the country struggled.

 

Now, the state's largest cities are seeing crowded highways, strained water supplies and other pressures that have come with the growth. And Texas politicians—protective of the small-government, low-tax policies many of them believe are at the root of the state's success—are grappling with how to pay the price of prosperity. 

Half of the 10 American cities with the largest population increases in the 12 months ended July 1, 2012, were in Texas, according to the Census Bureau. Houston, the nation's fourth-biggest city with about 2.2 million people, added 34,625 residents, second only to New York. Austin added 25,395 and now has some 843,000 residents, more than San Francisco. ...  But the size and pace of the population spurt is becoming more difficult to manage, presenting public officials with a challenge: How to beef up public infrastructure without straying from their small-government philosophy. HEB Grocery Co., which has more than 350 stores in Texas and Mexico and $20 billion in annual sales, has become so frustrated with traffic congestion in its home state that it recommends increasing state gasoline taxes to fund construction and maintenance, says Ken Allen, a consultant who advises the company on transportation issues. "Higher tax rates would cost us millions of dollars a year, but the cost of congestion is a hidden tax," says Mr. Allen, formerly HEB's head of transportation logistics. "We are behind in Texas on infrastructure and are getting more behind every year."  

 

 

http://finance.yahoo.com/news/boom-time-in-texas--jobs--traffic--water-worries-143250407.html

[crunchtastic]

how telling....one of the largest companies in the state has clearly done their math and have figured out that paying higher taxes now would be a more efficient way to run their business than paying the hidden costs of failing infrastructure in the future.  Perry is the worst kind of cheap old whore, still trying to give it away.  Eventually  third-world roads, perma-drought, and an illiterate workforce will bring us to the tipping point that will Texas  make unappealing to business. Looks like HEB, for one,  has aleady  figured it out.

 

This will cost all of us money, private citizens and business. At the municipal level here in Houston it should start with ending the tax giveaways to developers, requiring those devleopers pay for appropriate infrastrucutre improvements before signing off on new projects, and since we will probably never have a transit system that goes far enough to  take cars off  the road:  working out a reasonable congestion tax now for the inner loop (or other) areas (as London has) to help fund street/drainage  repairs. The more space your vehicle takes up, the heavier and more destructive it is of the roadway, if you travel during peak times, the more you pay for use. And the idea of free parking in the congestion zone  needs to die the natural death it deserves. Parking revenue (regardless of who collects it) is then used to pay for infrastruture.  Your car doesn't deserve a free spot anymore than you deserve a free week's rent.  Which is to say that businesses can work out a scheme to absorb or pass on these costs, but at we all gotta pay the freight, whether directly or indirectly.

[democide]

I think taxes are high enough, and if anything, they should be lowered and some taxes should be eliminated.  Why not cut the waste on worthless social programs, and ask the federal government to stop running their war machine overseas.  That's where a lot of the money is going.  Anyways, this was a problem long before this boom period.

[arche_757]

Yes, ending the wars overseas (officially - full pull out!) would cut some of that defense dept spending.  Maybe from 17% to even 15% of the total budget would be a nice reduction!  That's 2% more money we would/could have for roads/bridges etc that are in dire need of repairs.  OR here's a noble idea - give that money to NASA and let them find ways to innovate... but I digress.

[KinkaidAlum]

I think taxes are high enough, and if anything, they should be lowered and some taxes should be eliminated.  Why not cut the waste on worthless social programs, and ask the federal government to stop running their war machine overseas.  That's where a lot of the money is going.  Anyways, this was a problem long before this boom period.

 

Um, what?

 

Local and state roads have ZERO, NADA, ZILCH to do with national social programs or our neo-con military policies that have continued under Obama. It's a state issue which is why Crunchtastic's comment knocked it out of the park.

[democide]

No more taxes or tax hikes! If you want, you two can volunteer and pay more, it won't do any good.

[arche_757]

I seem to always get grouped into things here... not my intent.  I was only agreeing that the "conflicts" in Afghanistan and Iraq have been expensive and if we reduced our defense budget down by just 2% and gave that 2% to NASA (my numbers above weren't quite as precise - lets just say), that would be a boon for us - in Houston.  NASA getting a bigger budget by a couple of billion would be fantastic.

 

However, roads and bridges (etc) may be municiple or state projects but we could still see an influx of federal dollars to help with required maintenance.

 

And of course rapid growth will cause infrastructure problems.  The greatest issue I see is power.  Rolling brownouts are a joke.  The inability for Texans to come together and allow new powerplant construction (this is an old issue) will come to a head and stare at us in all its ugly horror soon enough - same as transit issues.

 

I vote for better use of our taxes - not more of them.

[Subdude]

It’s hard to deny that increasing population could be straining infrastructure.  I think though it’s a bit of an easy out to say that the real problem isn’t lack of funds but how existing funds are being used.  Whether it’s military or social, any existing spending has its constituency, so we might as well be realistic and admit that better infrastructure is going to mean taxes or fees somewhere down the line. 

 

Which is fair enough:  let voters figure out their preferred tradeoff between tax-aversion and shoddy infrastructure.  Let’s just not fall into the wishful thinking trap of assuming that existing uses of funds are going to somehow just go away.  There’s a good reason that places with high populations tend to have high costs.  I’m not sure Texas can expect to escape that forever.  

 

 

 

 

The greatest issue I see is power.  Rolling brownouts are a joke.  The inability for Texans to come together and allow new powerplant construction (this is an old issue) will come to a head and stare at us in all its ugly horror soon enough - same as transit issues.

 

The problem isn't exactly that new power plants aren't allowed, although coal units will come close under new air pollution regs, as much as the economics and market design.  Cheap gas has made a lot of older installed coal generation uneconomic to run.  Just ask the folks at EFH, which filed bankruptcy yesterday.  

 

Fortunately the market is on top of the problem, and more so, cheap solar has the potential to totally change the picture in the next five years.

 

 

 

[arche_757]

The problem isn't exactly that new power plants aren't allowed, although coal units will come close under new air pollution regs, as much as the economics and market design.  Cheap gas has made a lot of older installed coal generation uneconomic to run.  Just ask the folks at EFH, which filed bankruptcy yesterday.  

 

Fortunately the market is on top of the problem, and more so, cheap solar has the potential to totally change the picture in the next five years.

 

I hope you're right!  I see power (particularly June-September) as a major issue.

 

EFH gambled and lost big.

 

Hopefully people will be able to afford this cheap solar and it will be able to provide the power needed to suplement the grid?

 

[Subdude]

 

 

Hopefully people will be able to afford this cheap solar and it will be able to provide the power needed to suplement the grid?

 

I think the industry is just starting to come to grips with how a world with cheap solar will work, or where every homeowner with a rooftop panel can sell power back to the grid.  Gas utilities fear the same thing that happened to coal: relative to solar they become uneconomic.  The problem of course is that solar (and wind) aren't necessarily there when and where you need them, and storage technology is way lagging.  I would envision a world where there is a governmental mandate to maintain a certain level of potentially uneconomic generation while some degree of prioritization is given to renewables.   The implication is that users will end up required to subsidize redundant generation resources, much as in the old regulated power business model.  It will be interesting to see how it plays out.

 

 

 

 

[crunchtastic]

The no-more-taxes response  misses the point: which  is  that Rick Perry's mercenary business development policies are unsustainable, so obviously so that one of our largest corporations (homegrown, not poached from another state)  has publicly acknowledged this.  Forgoing  future tax revenue for jobs now, combined with refusing to fund infrastructure and schools, will never add up up the long run. Whether directly or through unintended consequences.     

 

 

[Nate99]

Solar generation isn't the answer yet. California is dealing with some fairly rough issues with the amount of solar it has on its grid. You end up with a significant amount of generating capacity going offline as soon as the sun sets right in the middle of the peak usage time when people come home from work and crank up the ovens and air conditioners. To avoid service interruption, you have to have as much back up generation equal to what you would need if the solar never existed in the first place.  With the panels dispersed throughout the grid, you don't necessarily have the generation in a place where the power can be dispatched to whoever wants to use it. And of course everyone still wants 100% reliability, so the grid as a backup will be needed in some capacity. 

 

 

What the cart shows is that you have to generation capacity that is used during the night sit idle as the sun is at its brightest and then have additional capacity on top of that able to spool up very quickly to meet peak demand to run for a few hours in the evening. It is incredibly expensive and inefficient to have the infrastructure in place when a lot of solar is on the grid, to say nothing of the operational challenges of managing the system. Efficient electrical storage would solve a ton of problems, but it is not there yet. 

 

As for taxes overall, as property values rise along with the volume of property and population, so will revenues of all types. Keeping infrastructure up is one of the few proper duties of government, and if it takes more taxes to manage the trajectory of the economic wherewithal of the state, I don't have a problem with that.

 

 

 

 

[arche_757]

The no-more-taxes response  misses the point: which  is  that Rick Perry's mercenary business development policies are unsustainable, so obviously so that one of our largest corporations (homegrown, not poached from another state)  has publicly acknowledged this.  Forgoing  future tax revenue for jobs now, combined with refusing to fund infrastructure and schools, will never add up up the long run. Whether directly or through unintended consequences.     

 

Who actually wants more taxes?  Any one?

 

Obviously taxes pay for government programs/services (be it municiple, state or federal).  Clearly we will pay more as Texas grows - that is not my wish - but it is reality.

 

I agree the growth Perry has brought the state looks great right now, but in 10 years it will start to catch up to us in other areas.  Oh well.  There's a Catch 22 pretty much everywhere.

 

I still see power as the immediate concern.  Schools are always a concern, but our system is fighting over whether to teach about Adam & Eve versus science in the classroom (note: classroom not church!).  So we clearly have a lot of hurdles before we can get to the bigger issues - like adequate funding for education.

[livincinco]

This really isn't just a Texas problem.  It's a national problem.  The American Society of Civil Engineers puts out a comprehensive report card on all aspects of the nation's infrastructure and in 2013, they gave a cumulative grade of a D+.  Texas actually received a grade of C which is above average for the country.

 

Spotlighting Texas is really just an attempt to put a partisan slant on something that really should be a national, bi-partisan issue.

 

http://www.infrastructurereportcard.org/

 

 

 

[livincinco]

Solar generation isn't the answer yet. California is dealing with some fairly rough issues with the amount of solar it has on its grid. You end up with a significant amount of generating capacity going offline as soon as the sun sets right in the middle of the peak usage time when people come home from work and crank up the ovens and air conditioners. To avoid service interruption, you have to have as much back up generation equal to what you would need if the solar never existed in the first place.  With the panels dispersed throughout the grid, you don't necessarily have the generation in a place where the power can be dispatched to whoever wants to use it. And of course everyone still wants 100% reliability, so the grid as a backup will be needed in some capacity. 

 

 

What the cart shows is that you have to generation capacity that is used during the night sit idle as the sun is at its brightest and then have additional capacity on top of that able to spool up very quickly to meet peak demand to run for a few hours in the evening. It is incredibly expensive and inefficient to have the infrastructure in place when a lot of solar is on the grid, to say nothing of the operational challenges of managing the system. Efficient electrical storage would solve a ton of problems, but it is not there yet. 

 

As for taxes overall, as property values rise along with the volume of property and population, so will revenues of all types. Keeping infrastructure up is one of the few proper duties of government, and if it takes more taxes to manage the trajectory of the economic wherewithal of the state, I don't have a problem with that.

 

Couldn't agree more completely.  I think that solar has huge potential, but until a mechanism exists to store excess electricity efficiently, there are serious limits to its value.

 

The struggles that Germany is encountering while trying to ramp up its renewable usage are a good illustration of the challenges that still need to be overcome.

 

[KinkaidAlum]

Shouting "no taxes" isn't an answer to anything. We've slashed social programs so much so that we are inching closer to having more in common with Mexico than anywhere in Western Europe. 

 

I agree, it sucks that we pay taxes, and believe me, mine are high. But the real reason it sucks is because we get so little for them. Our roads suck. Our schools largely suck. Our public colleges cost as much as private ones did a few decades ago. Our healthcare costs lead the world but our health rankings are turdible. Our interstate bridges are literally falling into rivers. Our public parks are understaffed. So are our air traffic control towers. The NIH's budget has been slashed. Ditto NASA. Forget about leading the world in research and innovation going forward with our anti-science knuckle draggers leading the way in DC. 

 

But, we have money for wars and bailouts to corporate overlords.

 

 

 

[Nate99]

Shouting "no taxes" isn't an answer to anything. We've slashed social programs so much so that we are inching closer to having more in common with Mexico than anywhere in Western Europe. 

 

I agree, it sucks that we pay taxes, and believe me, mine are high. But the real reason it sucks is because we get so little for them. Our roads suck. Our schools largely suck. Our public colleges cost as much as private ones did a few decades ago. Our healthcare costs lead the world but our health rankings are turdible. Our interstate bridges are literally falling into rivers. Our public parks are understaffed. So are our air traffic control towers. The NIH's budget has been slashed. Ditto NASA. Forget about leading the world in research and innovation going forward with our anti-science knuckle draggers leading the way in DC. 

 

But, we have money for wars and bailouts to corporate overlords.

 

 

Texas state spending has increased 12% since 2010.  I travel frequently and do not find our roads or traffic to be worse than any comparable city. Our schools are on par with any in America that must teach large numbers of students that do not speak English or choose to attend through High School.  These are not factors that can be corrected by spending more on them. School performance in Texas and the nation as a whole do not correlate at all with per pupil expenditures. Extend that analysis internationally and the results are even more laughable. 

 

Pre-ACA, The United States paid more public dollars per citizen for health care than any other country except Germany and Iceland, we may have passed them by now, they weren't that far ahead. In metrics where we score poorly in health rankings, they are largely influenced by factors unrelated to medical care like obesity, substance abuse and violence. In survival rates of treatable conditions we rank at the top consistently. In a study of Oregon Medicaid recipients, their health outcomes actually got worse once they received coverage compared to a group that did not.

 

Our healthcare system is not the problem with our health, it is our culture; that we have technology at our disposal to mitigate many of our self inflicted issues is a blessing, but a damned expensive one.  Ditto education. 

 

At the federal level, upwards of 60% of all spending goes to social programs. Social Security, Medicare, Medicaid and interest on the debt to pay for them are crowding out anything else that we might want to do. Discretionary spending outside of military is essentially all paid for by new debt every year. You can't have taxpayer funded amenities or even the basics when you have already promised all the revenue away, something has to give. Non-discretionary spending was an actuarial time-bomb when the various and sundry programs were established. We chose to let future taxpayers pay for current benefits, so now we have fewer options.  The costs of these programs have increased well beyond any other cost or our ability to pay for them, finding this scheme or that to manage to fix that shortfall on paper for a while rather misses the fundamental issue to me. 

 

I don't have a problem with taxes going for better infrastructure, but the entire pie and then some is already spoken for. Infrastructure spending could be tripled and it would still be dwarfed by other governmental spending priorities, but even if we could raise the additional revenue, those more favored priorities have political clout behind them, they are the first in line. Getting a politician to rearrange the priorities is a tall order. 

 

Under a myriad of taxing approaches and rates, the only time tax revenue has grown significantly and sustainably has been when the economy as a whole grew.  Raising rates just shuffles activities among jurisdictions and structures. One can simplify the tax code and make it more efficient and pull in more of the economy, but that is hardly without tradeoffs. Western Europe is no Utopia in this regard either. Many borrow more than we do and have lower growth to pay it back in the future.  Just because Sweden can manage a homogeneous population of fewer than 10 million in a socialist system doesn't mean we (or the UK, or Belgium, or Italy, or Ireland) should attempt the same tactics and expect the same results.

 

I deal with economics, numbers and budgets professionally. To say that the fiscal situation of our government at all levels is dysfunctional would be a comical understatement. The entire enterprise is based on an approach that would get anyone in the private sector thrown in jail. Deception is baked in to the language they use intentionally. Actual positive economic outcomes are only going to happen out of dumb luck when all of your planning, analysis and communication is based on a system that ignores plain reality.

 

This is a bit of a peeve of mine, if you can't tell. 

[livincinco]

That's really the challenge isn't it? There is a school of belief that giving more money to government is the answer, but it is helpful if that money is spent efficiently and that rarely seem to happen. I am under no illusion that this is going to change anytime soon.

[HoustonIsHome]

I don't mind tax hikes, just as long as its not on something I use.

I don't mind other people paying to improve my city at all.

[luciaphile]

I deal with economics, numbers and budgets professionally. To say that the fiscal situation of our government at all levels is dysfunctional would be a comical understatement. The entire enterprise is based on an approach that would get anyone in the private sector thrown in jail. Deception is baked in to the language they use intentionally. Actual positive economic outcomes are only going to happen out of dumb luck when all of your planning, analysis and communication is based on a system that ignores plain reality.

 

This is a bit of a peeve of mine, if you can't tell. 

 

I don't deal with such things and don't pretend to understand them.

But the economists - right and left - are always united in their rosy optimism: they insist that the debt doesn't mean what we think it means, that we don't understand fiat currency, that growth is inevitable and means the bill will never come due,  and moreover that it must never come due, or the result would be disastrous.

We think we're so over religion ... but they're like any other priestly caste, and we the laity are not expected to understand, but only have faith.

[Nate99]

I don't deal with such things and don't pretend to understand them.

But the economists - right and left - are always united in their rosy optimism: they insist that the debt doesn't mean what we think it means, that we don't understand fiat currency, that growth is inevitable and means the bill will never come due,  and moreover that it must never come due, or the result would be disastrous.

We think we're so over religion ... but they're like any other priestly caste, and we the laity are not expected to understand, but only have faith.

 

I'm not an economist professionally, but watch the more theoretical ideas with interest mostly in retrospect. My job very much involves untangling the wreckage of Grand Ideas, though.  

 

Predictions of economists have been spectacularly wrong too often to put much stock in them. You can find always someone to produce a study to make it easier to believe as you want to believe.  That they use numbers gives their results just enough of a veneer of objectivity to keep those that received D's in math (like politicians and journalists) from asking too many questions on the way to something that sounds good.

 

I think we're programmed to want to believe in something we can't understand. 

[luciaphile]

My husband assures me, when I've had my doubts, that all things are indeed measurable and that economics is a perfectly valid science - the trick is to find a perfectly disinterested practitioner of it.

[livincinco]

My husband assures me, when I've had my doubts, that all things are indeed measurable and that economics is a perfectly valid science - the trick is to find a perfectly disinterested practitioner of it.

I think that's an indictment of our current society more than a specific commentary on economics. A large percentage of what passes for "research" today is heavily politicized and generated for publicity purposes.

[Luminare]

I'm always for a smaller government, but infrastructure is one of governments fundamental jobs! If anything this is where the bulk of money in a single budget should go too. Not pet projects or some bells and whistles for a district. We as a city, state, and nation should understand what is an investment and what is just senseless spending and knowing the difference between common good and common few. Infrastructure effects everyone and the fact that the current generation of leaders just expects the next generation to tackle these problems because they don't want to pay for it is simply ludicrous. 

[Subdude]

I'm always for a smaller government, but infrastructure is one of governments fundamental jobs! If anything this is where the bulk of money in a single budget should go too. Not pet projects or some bells and whistles for a district. We as a city, state, and nation should understand what is an investment and what is just senseless spending and knowing the difference between common good and common few. Infrastructure effects everyone and the fact that the current generation of leaders just expects the next generation to tackle these problems because they don't want to pay for it is simply ludicrous. 

 

If only it were as easy as "understanding what is an investment and what is just senseless spending".  After all, my investment is often going to be your senseless spending.  There are always going to arguments over allocation of public funds.  Ultimately these have to be mediated through political processes.  If the public doesn't vote for higher taxes or fees, then poor quality infrastructure is going to be the outcome.  

[Luminare]

Well well, it looks like we will have to just see how bad it can get before we reach critical mass. Need breeds innovation and furthermore investment. To build a great city requires compromise which in our current political climate where its all or nothing nobody is going to get anything done. Even myself being a libertarian am will to compromise in order to see TRUE growth. Compromise is how we will accomplish our goals. "Someone who can't sacrifice anything, Can't never change anything."

[ChetStemenw]

I think the industry is just starting to come to grips with how a world with cheap solar will work, or where every homeowner with a rooftop panel can sell power back to the grid.  Gas utilities fear the same thing that happened to coal: relative to solar they become uneconomic.  The problem of course is that solar (and wind) aren't necessarily there when and where you need them, and storage technology is way lagging.  I would envision a world where there is a governmental mandate to maintain a certain level of potentially uneconomic generation while some degree of prioritization is given to renewables.   The implication is that users will end up required to subsidize redundant generation resources, much as in the old regulated power business model.  It will be interesting to see how it plays out.

Well I do agree with you.. It is tough to use renewable sources but if the storage and efficiency factor could be increased these renewable sources are very effective..

[ChetStemenw]

I think the industry is just starting to come to grips with how a world with cheap solar will work, or where every homeowner with a rooftop panel can sell power back to the grid.  Gas utilities fear the same thing that happened to coal: relative to solar power they become uneconomic.  The problem of course is that solar (and wind) aren't necessarily there when and where you need them, and storage technology is way lagging.  I would envision a world where there is a governmental mandate to maintain a certain level of potentially uneconomic generation while some degree of prioritization is given to renewables.   The implication is that users will end up required to subsidize redundant generation resources, much as in the old regulated power business model.  It will be interesting to see how it plays out.

 

Well I do agree with you.. It is tough to use renewable sources but if the storage and efficiency factor could be increased these renewable sources are very effective..

How many guys out there using renewable sources..Please share your experience..