How Texas backs its infrastructure like no other

Perkins

David Perkins spent 20 years as a construction materials producer, navigating from TXI (Texas Industries) to Martin Marietta following the 2014 merger of the two companies.

With a business background and an environmental science degree, Perkins was heavily involved in permitting and the various regulatory processes required to effectively open new sites and stay within the legal confines set for active operations.

Perkins undoubtedly enjoyed his work as a producer. But when a job opening emerged at the Texas Aggregates & Concrete Association (TACA), he saw an opportunity to apply his skills on a broader stage and advocate for the industry at-large.

“It’s obviously been challenging and fulfilling,” Perkins says of his role as TACA president and CEO. “The job keeps me sharp because there are so many different things I’m involved with.”

Fast-growing state

Texas, of course, is one of the top aggregate-producing states in the nation.

The top task at hand for Perkins, is, of course, infrastructure investment advocacy. Living up to the task is not so simple, though, as TACA represents the producers of aggregate, ready-mixed concrete and cement from the nation’s largest state.

The state of Texas continuously leads the nation in crushed stone production. In the second quarter of 2019, for example, Texas produced 46.7 million tons of crushed stone. That nearly outpaced the combined production of the nation’s second-largest (Pennsylvania) and third-largest (Florida) crushed stone-producing states.

Texas is no slouch in sand and gravel production, either. The Lone Star State (28.4 million tons) edged California (28.4 million tons) in the second quarter last year for the top production spot, and in the year prior Texas trailed only California in annual sand and gravel production.

Indeed, Texas is one-of-a-kind in aggregate production.

“Our state is a top 10 world economy,” Perkins says. “When you look at the gross state product, we outrank a lot of other nations in the world and have a big contribution to U.S. GDP.”

Texas is growing at an unprecedented rate, too, with a population increasing by 1,400 people a day. Such rapid growth requires the support of a sophisticated transportation infrastructure network – one that can support the many companies bringing new jobs to Texas.

“In the next 10 years, we’re going to be adding 5.1 million residents to the state,” Perkins says. “Over the next [30] years – there’s this 2050 projection – they are looking at 18 million to 19 million more. What that means is we are going to be adding another Dallas-Fort Worth, another Houston, another Austin-San Antonio population in another [30] years. That’s huge growth.”

Such exponential growth also means demand for aggregate should leap to record highs.

“Our consumption is roughly 10 tons of stone and gravel per capita,” Perkins says. “Looking out at the 10-year horizon with 5 million additional people, that’s 50 million more tons of stone, sand and gravel per year.”

Funding Texas highways

With five of the nation’s 13 most populous cities residing in Texas, demand for construction materials in the Lone Star State is, not surprisingly, very high. Photo: Art Wager/iStock / Getty Images Plus/Getty Images

Texas doesn’t mess around when it comes to investing in its infrastructure, either.

With the State Highway Fund deriving from several sources, including Fund 6, Proposition 1 and Proposition 7, Texas is in a rather advantageous position to keep its roads and bridges nicely maintained in the years to come.

Fund 6 is the Texas Department of Transportation’s (TxDOT) primary funding source, receiving revenues in the form of taxes and fees. Proposition 1 and Proposition 7, on the other hand, are subaccounts of the State Highway Fund. But their presence is a reflection of the public’s desire for quality roads.

“Both of these propositions were passed by the legislature, but they had to be brought before the general electorate,” Perkins says. “Both of them passed with over [80] percent approval.”

Of the two subaccounts, Proposition 7 presents a more significant financial impact to the state. As Perkins explains, Proposition 7 funds are collected in a rather unique way.

“We do not have a state income tax, and that’s another reason why Texas is attractive to people,” Perkins says. “But we do have our state sales tax. Proposition 7 is based off of state sales tax receipts. Once the state achieves a certain amount of revenue in a year ($28 billion), the next $2.5 billion is automatically dedicated to the highway fund.”

Through TxDOT’s 2020 Unified Transportation Program, planned infrastructure investments totaling $77 billion over the next 10 years are already identified. That’s a funding level that most other states should envy.

Still, as Perkins points out, infrastructure spending levels in Texas and elsewhere continue to generally fall short of where they ultimately need to be.

“In a perfect world, we would get more money for infrastructure,” Perkins says. “When you look at the economic health of a society, the foundation of that is the ability for commerce to take place. That must be supported, and infrastructure is part of that.”

And advocating for infrastructure investments on behalf of construction materials producers remains the top priority for TACA’s president and CEO.

“We want to continue advocating to support infrastructure investment,” Perkins says. “It’s something that’s very important to us.”