I started out to write about the news that TxDOT plans to reduce maintenance by $4.9 billion over the next eleven years. In the process of researching the story, I have learned from a source close to Kirk Watson (NOT Watson) that the Austin senator will not object to the appointment of Deirdre Delisi to succeed the late Rick Williamson as chairman of the Texas Highway Commission. Watson has been the primary roadblock–so much so that speculation was rampant that Perry would name a chairman who was not controversial, and then Delisi would take over the running of the agency, a position for which no Senate confirmation is required. However, Watson had previously objected to the appointment of Ron Wilson to the Public Safety Commission, and the best way I can think of to put it is that Perry was playing hardball and Watson didn’t think that busting a second Perry appointee was a good career move. The appointment will likely be announced within the next couple of days. Delisi’s ascendancy will be greeted with intense skepticism by many senators, including Transportation chair John Carona, who told me, “She’s not qualified, she’s a political placeholder, and she has a horrid history of working with the Legislature. The governor couldn’t be sending a worse signal.” Nor is David Dewhurst a Delisi fan. One Perry intimate suggested to me that Delisi is someone who has the ear of the governor and might, in a Nixon-goes-to-China sense, get him to modify his insistence on comprehensive development agreeements that privatize toll roads. That’s a lovely fairy tale, but it isn’t Perry’s style. Or Delisi’s. The battle over Delisi is just one of many fronts in the controversy over transportation policy. The decision to cut maintenance was a big news story, but it ultimately was not a major shift in policy. The embattled agency has around $28 billion to spend over the next decade of so, around $10+ billion of which is nondiscretionary spending. The real issue has been how to divide the remaining $17+ billion or so between new construction and maintenance. (To give you an idea of the extent of TxDOT’s problems, the real maintenance needs over the next decade or so are over $20 billion.) The decision is to spend $12.5 billion on maintenance and $4.5 billion on new capacity–that is, new roads and new lanes on existing roads. The $12.5 billion on maintenance represents a reduction of around $350 million a year that will be shifted to new construction. TxDOT currently claims that 87% of its roads are in “good or better” condition, a figure that will fall to 80% under the new spending pattern. The Dallas Morning News story about the decision said that pavement conditions on one in five Texas roads would be substandard by the end of the planning period. This is mathematically correct, but it is not necessarily an accurate forecast. A transportation lobbyist who is familiar with the process told me that characterizing road conditions is more art than science. The Legislature’s primary push has been for TxDOT to start issuing bonds for road construction that were authorized by a constitutional amendment, which the voters approved in 2007. So far, TxDOT has been slow to respond, which has not exactly endeared TxDOT to legislative policy makers (not that TxDOT has many friends in the Capitol anyway). Another problem for the agency is that it is currently up for Sunset review, and the staff report will probably come out in late May. The early word is that Perry wants the Sunset bill to be narrowly drawn and not get into the big issues, such as how to finance toll roads. If these issues are part of the Sunset bill, and they do not come out to the governor’s liking, he would have to veto the bill–but it’s not easy to veto a Sunset bill, because Sunset bills have to pass, or the agency ceases to exist. All indications are that Sunset chairman Carl Isett is on board with the governor and is not seen as a change agent. This is disappointing, because Isett certainly has the intelligence to take on the reform of TxDOT but apparently not the will. In addition to Sunset, another challenge is looming. In 2009, the moratorium expires–but so does the authority for comprehensive development agreements. The Legislature will have to deal with these issues. And it will also have to deal with the primacy issue, whether local toll authorities will have the authority to make the decision about financing their projects without having to get the blessing of TxDOT. Finally, there is the issue of funding. If the Legislature would raise the gasoline tax (or give metro areas the authority to raise it) and index it to inflation, the need for CDAs would be greatly reduced, and the control of toll roads would remain in the public sector. Chairman Delisi is going to have a busy time.