• Proposition 1 Passes by 80%; More Plans to Fill Funding Gap

November 18, 2014

For more than a decade Texas has been keeping highway construction going with a series of borrowing programs and by building some projects as toll roads. Fuel tax and vehicle registration fees are losing their buying power. The borrowing programs are nearly exhausted and debt payments are greater than the amount of money available for new construction. And the legislative enthusiasm for debt financing appears to have diminished.

Voters took a major step forward in addressing the highway funding shortfall by approving Proposition 1 on the November ballot by a 4 to 1 margin.

Proposition 1 will mean that starting in 2015 the state will have additional funds for highway construction and preservation. Voters agreed to dedicate a portion of the state's oil and gas production tax to highways. The total oil and gas tax revenue will move up or down from year to year depending on production levels and energy prices but is expected to provide $1.7 billion for roads in 2015 and even more annually in future years.

Governor-Elect Greg Abbott has joined others in stressing the need for additional highway funding. He backed Proposition 1 and made transportation funding a major theme of his successful campaign.

In his campaign appearances and in campaign advertising he said he believes it is time to dedicate a substantial portion of the state’s motor vehicle sales tax to highway funding and signaled to lawmakers that he will back them in advancing that idea.

Abbott did not come late to transportation advocacy.  In an October 2013 op-ed for the McAllen Monitor he wrote, “We need a permanent source of additional transportation funding, not one-time patches to our fiscal potholes.”

“Critical to our economy is better transportation infrastructure.  I support ending all diversions from the State Highway Fund to other spending programs.  Money raised for roads will be spent on road construction and maintenance.  These changes will add billions of additional dollars to keep Texans moving,” he wrote.

Both Abbott and House Speaker Joe Straus have stressed the need to end diversions from the State Highway Fund that go to non-road building. Straus has noted that getting that off the table will allow the Legislature to address the much larger transportation funding needs that are the result of the state's success in economic growth and population growth in recent years.

Abbott’s emphasis on transportation took the big stage in a series of widely aired campaign commercials in which he rolled down a freeway ramp next to a bumper-to-bumper line of vehicles.  He made his point saying,“A guy in a wheelchair can move faster than traffic on some roads in Texas.”He repeated his goal of ending diversions, a point that has been made by numerous lawmakers for several years.  The Legislature did make some progress on reducing diversions from the Highway Fund in 2013.

Abbott was much more explicit about transportation funding in his campaign position paper called “Greg Abbott’s Working Texans Plan,” a document which remains on his campaign’s website.
In it he recommends amending the Texas Constitution to dedicate “upwards of two-thirds” of motor vehicle sales and use tax revenue to the State Highway Fund.  The Plan notes that in fiscal year 2012 the vehicle sales tax brought $3.6 billion into the state coffers, making it among the largest sources of state revenue.  “Yet most of that money goes into the General Revenue Fund (GR), most of which is consumed in other areas of government.  Since motor vehicle sales have a direct impact on the state’s transportation infrastructure, it is appropriate to dedicate upwards of two-thirds of that tax to the State Highway Fund to keep pace with transportation needs.”

Two-thirds of the $3.6 billion in vehicles sales tax in FY 2012 would have amounted to $2.4 billion, more than the $2.3 billion that gasoline and diesel taxes contributed to the State Highway Fund in that year.