November 1, 2013

The Alliance for I-69 Texas and the Greater Houston Partnership hosted a joint recognition reception October 22 honoring the work of State Senator Robert Nichols (Jacksonville) and State Representative Joe Pickett (El Paso).

They were honored for their exceptional leadership in the Legislature where they worked successfully this year to direct additional new funding to highway maintenance and construction in Texas. The Houston reception was attended by Alliance members representing I-69 route communities from the Rio Grande Valley north all the way to Texarkana.

Senator Nichols is chairman of the Senate Transportation Committee and Representative Picket is chairman of the House Committee on Homeland Security and Public Safety and a veteran member of the House Transportation Committee.

Robert Harvey, president and CEO of the Greater Houston Partnership, and Judge John Thompson, Polk County Judge and Alliance board chairman, showered Nichols and Pickett with praise for their marathon efforts during the 2013 regular session and three special sessions of the Legislature.

"Senator Nichols and Representative Pickett were instrumental in passage of the transportation legislation vital to the future of Texas and, if approved by the voters next, will contribute a minimum of $1.2 billion a year to the State Highway Fund," Harvey said.

Rep. Pickett took the opportunity to congratulate Sen. Nichols for coming up with the idea of allowing the voters to dedicate a portion of the state's oil and natural gas production tax revenue each year to funding highways.

Sen. Nichols thanked Pickett and said that they would have never been able to get the 100 votes in the House of Representatives needed to put the initiative on the ballot without the work Pickett did to bring members along.

Judge Thompson thanked both lawmakers and noted that the Alliance and the Partnership had worked very closely together in support of the Nichols funding plan and other transportation funding legislation this year.

FUNDING INITIATIVE

The $1.2 billion per year, if approved, will provide about a quarter of the projected highway funding shortfall that faces Texas.  Additional incremental funding will need to be pursued when the Legislature meets in 2015.

Transportation was on the minds of many members of the House and Senate this year.  Lawmakers spent a good deal of time during the seven months they were in session talking about the need to address the impending major highway funding cliff.   During the regular session, however, they only managed to allocate an additional $850 million in one-time funding against a growing gap of more than $5 billion a year.  Little progress was made on providing a new permanent, reliable and growing funding stream for investment in Texas highways.

At the beginning of the three special sessions Senator Nichols stepped forward with the idea of capturing oil and natural gas production taxes before they go into the Economic Stabilization Fund (rainy day fund).  Rep. Pickett picked up the idea in the House.  Both proved skillful in crafting the compromise proposals in SJR 1 that were ultimately adopted by a vote of 22 to 3 in the Senate and 106 to 21 in the House.

The Alliance and other statewide organizations came together in the final days before the vote to offer lawmakers their full support in voting for the measure.  Alliance members and others argued that taking incremental steps toward a solution is a realistic approach and that the problem can be addressed in bite-size pieces from several revenue sources.

The Alliance argued that members should not pass up the opportunity to make real progress on the highway funding gap. Passage of the Amendment will result in projects being put in motion that would otherwise be deferred as Texas falls further behind.

AMENDMENT BALLOT LANGUAGE
When voters go to the polls in the statewide General Election in November 2014 they will be asked to vote for or against the following:  "The constitutional amendment providing for the use and dedication of certain money transferred to the state highway fund to assist in the completion of transportation construction, maintenance, and rehabilitation projects, not to include toll roads."

The amendment asks voter permission to take half the taxes  on oil and natural gas production that now go to the Economic Stabilization Fund and place the amount in the State Highway Fund. Oil production in Texas is growing dramatically and huge natural gas fields have been discovered and will be developed in the years ahead as natural gas demand grows and prices improve. The passage of the Amendment will mean more funding for highways and strong revenues continuing to flow to the Economic Stabilization Fund.

The House adopted an amendment during their last day of debate on the constitutional amendment. One authored by Rep. Joe Deshotel gives TxDOT the option to award or loan money from the Texas Mobility Fund for projects at the dozen Texas seaports. The Mobility Fund draws more than $380 million a year in revenues from vehicle inspection fees, drivers license fees, record fees and motor carrier penalties.

Lawmakers passed HB 1, the companion enabling legislation, which creates a standing panel of House and Senate budget writers to protect the balance in the Economic Stabilization Fund.  Members would weigh the history of fund balances and transfers, along with funding demands including highway congestion.  The law also requires TxDOT to identify and implement $100 million in savings and efficiencies and us the money to pay down bond debt in FY 2015.  Finally it creates special House and Senate study committees that can meet jointly and will write a single report for the 2015 Legislature on ways to finance highways needs in the long term.

SELECT COMMITTEE TO FOCUS ON FUNDING

Creation of the select committee provides an opportunity to keep the spotlight on transportation funding during the interim.  Their report is due Nov. 1, 2014,  just before the constitutional amendment election.  The report should provide the next Legislature with a clear, updated look at highway underfunding and possibilities for bridging that gap.  It will look at the future reliability of all current TxDOT funding sources.  It will also look at debt financing which has been the state’s default method for the past decade.  It will present revenue ideas used by other states and other nations. The objective is to help the 2015 Legislature find a sustainable way of paying the cost of modern transportation.