Investing in Infrastructure

by Dr. M. Ray Perryman, President & CEO of The Perryman Group

A growing population and economy increase infrastructure needs. From highways and roadways to broadband to water to schools, expansion necessitates careful investment to avoid eroding quality of life for current and future residents.

The Texas population now tops 30 million according to recent estimates from the US Census Bureau. In fact, the state added 470,708 people (measured from July 2021 to July 2022), the largest-gaining state in the nation. Growth in Texas last year was fueled by gains from all three components: net domestic migration (230,961), net international migration (118,614), and natural increase (118,159). That’s a lot of new Texans (almost 1,300 every day)!

People choosing to move to Texas reflects a range of factors, from the dynamic economy to greater affordability. With companies locating and expanding and the likelihood that the state will outperform most areas, we can expect to continue to attract new residents from other parts of the country and the world. At the same time, a younger population contributes to the natural growth rate.

Our latest forecasts indicate that by 2050, there will be more than 11 million additional Texans. We also project that the Waco population will be about 30% larger than it is today. In addition to the need to maintain existing infrastructure, there is also a need for expanded capacity.

An efficient transportation system is essential to quality of life and economic prosperity. For example, investments in transportation infrastructure can be crucial to preventing excessive congestion. They also often systematically enhance economic productivity and efficiency. In areas experiencing rapid expansion or increases in traffic, planning for future growth is essential. While the construction process can lead to some dislocations, the benefits in terms of increased efficiency and additional desirable development far outweigh these costs.

The relationship between an efficient and effective transportation system and economic growth is well documented. Numerous studies indicate excessive roadway congestion leads to decreased productivity, increased motivation for companies to invest and expand elsewhere, and elevated production costs, among other detrimental effects. Excessive traffic congestion also provides increased motivation for residents, and thereby workers, to locate elsewhere.

Interstate 35 through Waco ranked 46 among all Texas roadways in terms of congestion in 2021, and the current expansion can help reduce problems in the future. In addition, a significant local effort is underway to resurface and improve city streets. Such investments not only increase the useful life of existing pavement, but also help reduce problems such as potholes. Investments at the state and local level are needed to help prevent worsening congestion and roadway conditions, and the current programs are part of an ongoing need for additional highway infrastructure in the region.

The Texas Water Development Board (TWDB) is charged with ensuring adequate and affordable water supplies for all Texans. Supplies must be adequate to meet the needs of the state’s growing population and economy and to withstand future droughts. The TWDB also assists local areas with related financing. Advance planning and implementation are essential, and the most recent state water plan identifies nearly $80 billion in investments across the state over the next few decades in order to ensure adequate supplies. Projects include, among others, desalinization facilities, conservation measures, new reservoirs and wellfields, and reuse. Several initiatives are set for the Waco area, helping to ensure adequate fresh water supplies for the future.

Another investment which will be required given projected population growth is for schools. According to data from the Texas Education Agency, total enrollment in Texas public schools increased by nearly 429,000 students (8.6%) over the past 10 years, and many schools are crowded.

In addition, almost 61% of all students are identified as economically disadvantaged and the number is rising (up by some 56,000 over the last year). The percentage of students identified as emergent bilingual students/English learners is also growing and now approaches 22%. Both of these groups may require additional resources in the classroom and are critical to our future workforce. Broadband is also becoming an essential part of overall infrastructure not only for education, but also healthcare delivery and business expansion.

Accommodating the substantial population and economic expansion expected in the decades to come will require investing in infrastructure of all types – not only highways and water capacity and delivery, but also broadband, electric transmission and distribution, and pipelines. Waco is presently seeing substantial growth in a diverse set of industries, and we are projecting that it will continue for the foreseeable future. The key is to try to get ahead of (or at least stay with) the necessary increases in infrastructure to avoid eroding quality of life for all.

Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of more than 3,000 clients over the past four decades.