Funding needs and sources
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Funding needs and sources

Financial Management

The Texas transportation system faces challenges like never before. Demand on the system is outpacing available revenue, and factors like inflation, a growing population, an aging infrastructure, and more fuel-efficient vehicles are pushing current funding sources to their limits.

A healthy and reliable transportation system is critical for Texas, now and in the future. However, solving the state's current funding problems will require a multi-level approach, with all Texans involved in the planning process.

TxDOT has developed a Statewide Long-Range Transportation Plan and a statewide funding brochure (see below) that outlines the needs of highway and road funding in the state to kick-start the discussion. The resources below list the source material for data found in the brochure.

What’s driving demand?

Population Growth: Texas continues to grow rapidly, adding millions of residents each decade.

Congestion: The state’s 100 most congested road segments highlight the strain on existing infrastructure.

Aging Infrastructure: Maintenance and rehabilitation needs are increasing as roads and bridges age.

Recent Comptroller estimates

The Certified Revenue Estimate (CRE) was released in October of 2025 for the revenue estimate used to certify the General Appropriations Act for the fiscal year (FY) 2026-27 biennium, which revised the Biennial Revenue Estimate (BRE) that was released in January 2025. Below is a summary of these impacts that relate specifically to TxDOT’s State Highway Fund (SHF) along with the link to the full documents in the Texas Comptroller Resources section below:

(-$858M) Estimated reductions from CRE for FYs 2026-27 plus the FY28 Proposition 1 SHF transfer

  • (-$481M) FY26-FY27 CRE reduction from BRE
    • Increases:
      • Motor Fuel Tax: +$11M
      • Vehicle Registration Fee: +$232M
      • Proposition 7 Motor Vehicle Sales Tax: +$115M
    • Reductions:
      • Proposition 1 Severance Tax: (-$117M) [FY27 only]
      • Federal: (-$723M) [FY27 reverted to FAST Act levels since IIJA expires FY26]
  • (-$377M) FY28 SHF Proposition 1 CRE reduction based upon FY27 GR collections

Current state

  • Needs Greater than Resources: Texas transportation system continues to face challenges with current revenues insufficient to meet future transportation demands based upon the Statewide Long-Range Transportation Plan (see link below under “TxDOT Resources”).
  • Revenue Uncertainty: Various factors creating challenges with sources including:
    • Federal: Expiration of Infrastructure Investment and Jobs Act (IIJA) after FY26
    • Proposition 1: Deposits ranging from $0.4 billion to $3.6 billion over last 10 years
    • Proposition 1 & 7: Expiration of funding after FY39-FY43
    • Motor Fuel Tax: More fuel-efficient and electric vehicle adoption
  • Responsible Stewardship: Letting and development targets will use a cash flow model to adjust according to revenue and expenditure projections. This has led to past historic levels with lower targets in the near future. TxDOT will continue to accelerate or delay projects to meet anticipated funding levels and keep cash balances minimal.
  • Well Positioned: If forecasts improve or additional resources are identified, TxDOT is ready to adjust letting and associated project development to meet increased revenues.

Last Updated Dec. 3, 2025

TxDOT resources

Texas Comptroller resources