More than 80 percent of Texas voters approved a proposition in November 2015 to allocate $5 billion in sales tax funds to the Texas Department of Transportation starting in the 2018-19 biennium.
But Texas lawmakers may now use a little-publicized backout option to help fill an estimated multi-billion state revenue shortfall.
Roughly 1.2 million Texans voted yes on a proposition to supply the State Highway Fund with $2.5 billion per fiscal year beginning in fiscal year 2018 as long as the state collects more than $28 billion in sales tax. If state motor vehicle sales and rental tax revenue exceeds $5 billion in fiscal year 2020, then 35 percent of any excess revenue also would go gto the TxDOT fund.
Based on that understanding, TxDOT is currently projected to receive $4.7 billion for the State Highway Fund. The money would be used for construction, maintenance or acquisition of rights-of-way for non-tolled public roads or to repay principal interest on highway improvement bonds issued by TxDOT.
However, after feeling the impact of what is a $4 billion to $5 billion revenue shortfall, state lawmakers are scrambling for cash to fund various services and agencies.
In early meetings examining transportation funding, legislators have begun to explore a built-in escape clause. The clause allows state lawmakers to redirect half of the funds allocated—$2.5 billion per biennium—by a two-thirds vote of each chamber.
State Sen. Kirk Watson, D-Austin, first explored the topic in a Senate Finance hearing by asking experts how such a vote might work.
“We purposely put in a fail-safe,” Watson said.
Following up, state Sen. Charles Schwertner, R-Georgetown, asked about the current plans for that money.
Transportation Commission Chair Tyron Lewis told the Senate Finance Committee that TxDOT plans on acting quickly once the state transportation agency receives the money, with plans already in place for the funding’s usage.
The Legislative Budget Board’s recommendations for the House budget include using about $4.4 billion for construction, maintenance and acquisition of rights-of-ways and roughly $600 million to fund bond debt service by paying principal interest.
No action has been taken on this matter yet.