Officials discuss road needs, Proposition 1
A proposition on the Nov. 4 ballot could help repair the state's ailing highway system, including heavily traveled roads in North Central Texas.
The Regional Transportation Council of the North Central Texas Council of Governments estimates the North Central Texas area will grow by 3 million people by 2035, placing a greater demand on already stressed and aging roadways.
RTC statistics show that gas tax rates—which along with registration fees and federal funds comprise the State Highway Fund—have not kept pace with inflation of commodity prices. Since 1991 the purchasing power of transportation revenue has declined by 65 percent, which translates to a potential loss in revenue of $750 million per year.
"We are getting no increase in traditional revenue," said Amanda Wilson, public involvement manager for the RTC. "The gas tax rates have stayed the same."
Proposition 1 would amend the Texas Constitution so as to divert some of the taxes paid by the state's oil and gas companies to the SHF, which helps fund the Texas Department of Transportation. The state comptroller's most recent estimate pegs TxDOT's potential windfall from the proposition's passage at about $1.7 billion in the first year alone.
Currently 75 percent of the severance tax—essentially a production tax paid by oil and gas companies—goes to the state's Economic Stabilization Fund, also known as the Rainy Day Fund, and the remaining 25 percent helps fund the state's education system. If Proposition 1 passes, 37.5 percent of the severance tax would continue to go to the Rainy Day Fund, and 37.5 percent of the tax would go to the SHF. The remaining
25 percent would continue funding the state's education system.
The revenue would come without raising taxes and would have an assortment of strings attached, including a provision barring the money from being used for
construction of toll roads and a mandate for TxDOT to identify $100 million of cost
savings.
Even with the RTC's $98.7 billion investment in projects and programs planned during the next 21 years, travel times on North Central Texas roadways are estimated to increase nearly 45 percent because of congestion, according to the RTC.
Wilson said the council in 2013 implemented a long-range transportation plan, called Mobility 2035, which is designed to maximize funds and utilize the existing capacity of area roadways to improve regional mobility. However, funds to the tune of $1.1 billion per year more than current transportation funding levels are needed to fund Mobility 2035, she said.
North Central Texas is not alone in transportation funding problems. Scott Haywood, a spokesman for Move Texas Forward, an organization created by former TxDOT commissioners dedicated to lobbying for increased funding for Texas roads, said Prop. 1 would help TxDOT bridge its estimated $5 billion annual shortfall for maintaining existing roads and paying down its debt.
How we got here
Haywood said most of the state's transportation revenue sources have remained steady since the early 1990s, but costs and traffic congestion have soared. Currently 20 cents of every gallon of gas purchased in Texas goes toward the state's fuel tax. Of that amount, 5 cents helps fund the state's education system, and 15 cents goes toward the SHF.
The fund is also bolstered by the state's vehicle registration fee, among other sources. In 2012 the fuel tax provided
$2.3 billion for the SHF. Since the early 1990s, however, the cost of building roads has doubled, Haywood said. Additionally, in 2013, the average fuel economy of cars sold in the U.S. reached an all-time high of 24.9 miles per gallon, according to a study by the University of Michigan Transportation Institute.
As fuel economy improves, drivers use less fuel, pay less in fuel taxes and contribute less to the SHF.
According to a 2007 study commissioned by TxDOT entitled "Accounting for Fuel Efficiency in Texas Fuel Tax Revenue Estimations," the department could lose out on $86 billion in fuel tax collections because of assumed increases in the fuel efficiency of vehicles between 2007 and 2031.
To overcome that deficit, the study found TxDOT would need to raise the state's portion of the fuel tax 665 percent from $0.20 to $1.53 per gallon of gas.
To keep up with the state's growth, Texas voters approved bond debt issuance for road infrastructure in 2001, 2003 and 2007 totaling $17 billion, Haywood said. In all, stagnating revenue sources and mounting debt have left the state with a cash-strapped department, he said.
"When you look at the next [two years], we have a significant drop-off in what the department can do from a transportation standpoint," Haywood said.
Identifying savings
If Prop. 1 passes, TxDOT must identify $100 million of savings. It is not clear how those savings will be identified.
"TxDOT is continuing to look at opportunities set forth in [the Prop. 1 legislation] that will fulfill this legislative requirement," TxDOT spokesman Mark Cross said in an email. TxDOT is required to report in writing to the Legislature on the implementation of $100 million in savings and efficiencies by August 2015. TxDOT already has a voluntary program meant to save money that involves turning over control and maintenance of some of its roads to cities, Cross said.
Local support
The Texas House of Representatives voted 124-2 in August 2013 to put Prop. 1 on this November's ballot.
State Rep. Van Taylor, R-Plano, said there were a lot of plans being circulated on how to best fund our state's critical transportation and infrastructure needs and he worked with legislators to craft Prop. 1 as the solution.
"To meet the demands of our rapidly growing population, Proposition 1 increases transportation funding while providing new critical protections for our Rainy Day Fund and ensures that not one dime of this money can go towards toll roads," he said.
Taylor said he hopes voters will support Prop. 1 in November, as it would "successfully address" both long- and short-term needs and long-term financial responsibility."
Jamee Jolly, president and CEO of the Plano Chamber of Commerce, said Prop. 1 will be a small step in the right direction to fund the state's transportation needs.
"With the population growth and addition of new corporations and businesses in Plano and the North Texas region, it is extremely important that proper funding for transportation be put in place to fulfill the construction, maintenance and planning needs that currently exist," Jolly said.
She pointed out that revenue funds transferred to the State Highway Fund may only be used for the development of public roadways.
"Many companies and individuals choose to make Plano their home due to the quality of life, which includes the
ability to move efficiently from place to place whether for work, school or play," Jolly said. "We encourage the passage of Proposition 1 as a start."
