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By Rodger Rees, Galveston Wharves Port Director and CEO
The Texas Legislature could make history this session by allocating $600 million in state funds for capital projects and ship channel improvements for Texas ports. Historically, this amount has been zero and is still subject to change. This sea change reflects recognition of the critical role Texas ports play in strengthening economies and supply chains across the globe, as well as the return on investment the state will receive by investing in these economic engines.
Texas ports handle 616.2 million tons of foreign and domestic cargo and generate $449.6 billion in total economic value, representing 25 percent of the state’s gross domestic product (GDP), according to the Texas Ports Association. Texas ports impact more than 1.8 million jobs, generating $102 billion in personal income.
The Lone Star State ranks second among the 50 U.S. states in waterborne commerce, yet it is one of the few states that does not provide funding for port improvements. Ongoing state funding will help level the playing field as Texas ports compete for business with ports that do get state funding.
This funding is especially critical for the Port of Galveston, a self-sustaining city entity with no taxing authority. We fund major capital projects through revenues, grants, financing and public/private partnerships.
I’m hopeful because legislators in both the House and Senate support legislative changes to ensure that port projects are eligible for funding through the Texas Department of Transportation. More importantly, the funding is included in both House and Senate versions of the budget.
It includes $400 million for the Ship Channel Improvement Revolving Fund (SCIRF) and $200 million in port capital improvements projects.
This revolving loan program can help ports fund the non-federal share of congressionally authorized ship channel improvements. There are eight eligible federal ship channel projects in Texas. Costs are shared between the U.S. Army Corps of Engineers and the entities serving as the non-federal sponsors.
Critical port capital projects could be funded for the first time with $200 million in state funding distributed by TxDOT on behalf of the Port Authority Advisory Committee (PAAC). The Texas Transportation Commission appoints seven PAAC board members, to provide recommendations and insights about Texas ports.
The funding would allow Texas ports to make critical capital improvements that support port activity such as multi-modal connectivity enhancements, port expansions, and replacement of outdated and failing port facilities.
This would be a great beginning, but the needs are far greater than the funding considered.
TPA has requested funding $1 billion for port capital improvements and $750 million for the Ship Channel Improvement Revolving Fund (SCIRF). Beyond these requests, the Texas Port Mission Plan has identified funding needs for Texas ports totaling $9.67 billion, including $1.67 billion for port infrastructure, $4.34 billion for connectivity projects and $3.66 billion for ship channel improvements.
I’m hopeful that port funding will become a routine line item in the state budget as leaders see the economic return on their funding investment in Texas ports.
Rodger Rees, Galveston Wharves port director and CEO, serves on the Texas Department of Transportation Port Authority Advisory Committee and represents the port in the Texas Ports Association.