August 5, 2025 - TRA Newswire -

The needs continue to be great in funding freight projects for rail and maritime modes in Texas and in the recent legislative session the outcome turned out to be a mixed bag.

In a Texas Department of Transportation briefing for freight stakeholders, hosted by the Texas A&M Transportation Institute, participants heard details about two new freight rail grant programs that the legislature passed and were signed by Governor Abbott. One contains a $250 million appropriation and the other had no fiscal note attached to its passage. A $40 million funding request for maritime projects at Texas ports was deep sixed by lawmakers.

Of TxDOT's $40 billion appropriation that was approved in the 89th Legislative Session, $860 million was carved out for rail, maritime, aviation and public transportation projects That works out to be about 2% of the transportation budget. The other 98% goes toward new and existing highways. And to top that off, much of the 2% multi-modal funding programs come from federal grants, with the state of Texas contributing a smaller total share. 

Wesley Starnes, State Legislative Liaison of TxDOT's Government Affairs Division, pointed out that Senate Bill 1555 created a grade-separation program that covers some 8,000 rail crossings not on the state highway grid. $250 million was allocated for this new grant program to increase safety at railroad crossings, reduce congestion and promote economic growth. Several crossings in East Houston, including where a fatal incident involved a high-school student, will receive funding for road and pedestrian separation from freight trains. Other cities, towns and counties around the state will be considered for grade separation projects once a call goes out from TxDOT.

Senate Bill 2366 created a Short Line Grant Program that creates a framework for future improvements for the first-mile, last-mile smaller railroads that serve local businesses and industries around the state. "Unfortunately, this bill did not get funded this legislative session but we will continue conversations with the legislature and look forward to future investments and expanding the freight rail network," according to Starnes.

The short line grant program will allow grant projects to be administered by the TxDOT Rail Division for rural rail transportation district as well as Class 2 and 3 railroads. It will allow for replacing tracks and bridges, increasing capacity, or restore short line railroads.   

A representative of  the Northeast Texas Rural Rail Transportation District (NETEX) asked why there was no funding attached to the newly created short line grant program. "There was a lot of good discussion we had when members (of the legislature) reached out to us. There was some concern if money was going to be tied to private entities and if so, how are they going to spend that money and what kind of oversight would be associated with that", said Starnes. "We did our part to explain that most funding programs, either federal or state, we do on a reimbursement-type scenario."

Although budget negotiators did not fund the short line grant program this time around, Starnes was hopeful that now having the program set, this would answer some of the questions on how funds would be administered.  

Allan Rutter, Freight Analysis Program Manager at Texas A&M Transportation Institute, reviewed rail appropriation riders from Senate Bill 1:

• A new appropriations rider specifics $5 million a year for two railroad grade separation bridge projects in East Houston.
• $10 million a year for the Texas State Railroad, the tourist railroad that runs between Palestine and Rusk, in Senate Transportation Chair Robert Nichols' district. 
• Rail safety programs that are administered by the TxDOT Rail Division continue to be limited to appropriations from fees, fines and other revenue that come from railroads ( Editor's translation: this means there is no state funding in the TxDOT budget for public rail safety awareness programs at grade crossings such as those by Operation Lifesaver).
• An ongoing rider found in previous appropriations bills specifies that TxDOT should make it a top priority to look to federal funding for rail and other multi-modal transportation projects. ( Editor's translation: this means no dedicated state funding source, including for the Rail Relocation and Improvement Fund that voters approved in 2005).

Senate Bill 250 now allows municipalities to annex areas adjacent to rail property rights-of-way. 

Senate Bill 2129 increases fines for motorists that disregard flagger warnings at rail crossings. 

Funding for maritime projects took a hit in the session for needed capital improvements. The Texas House proposed $600 million for port projects in January, which was revised down to $200 million during the session. The maritime industry seemed confident that the $200 million allocation would be supported by both the House and Senate, but down to the wire the money was dropped from the budget. 

Travis Milner from TxDOT's Maritime Division, expressed surprise that lawmakers cut funding for port projects. "There was a fair bit of disappointment. The needs are huge. The port mission plan that was presented to the legislature outlined over $9 billion in needs.  We have to invest to remain competitive because the reality is that port tenants have other ports to choose from," said Milner. "We need to maintain that investment in our ports and maritime industry for the economic growth of the state."

Rail plans an important part at Texas ports, both with inbound and outbound shipment of commodities that include petrochemical and ag products, automobiles and intermodal containers.  

Photo credit: TxDOT