By Brett Thorne & Krista Wadsworth
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 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 State Highway Fund, 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. If Proposition 1 passes, 37.5 percent of the 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 help fund 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 throughout 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, payless 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 fuel tax 665 percent 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 would 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.
Shona Huffman, in charge of governmental affairs and special projects for the Frisco Chamber of Commerce, said while the diverted Rainy Day Funds would still not be enough to cover even current problems, much less future needs, Prop. 1 is a good place to start, she said.
"The Rainy Day Fund is in great [financial] shape, and it is designed to address critical needs," Huffman said. "Transportation is a critical need. This would send a message to legislators that we need to solve transportation problems and allocate funds to them."
Solving transportation problems is critical to current businesses, prospective businesses and the customers that drive to these businesses, she said.
The chamber is encouraging its member businesses and North Texas residents to vote in favor of investing in infrastructure in order to increase safety, reduce tolls and reduce congestion while creating jobs and supporting state and local commerce.
The chamber's research shows that Texas currently has 27 million people and is expected to add 18 million people by 2040—which could mean another 18 million additional vehicles on Texas roads by 2040.
The Texas House of Representatives voted 124-2 in August 2013 to put Prop. 1 on this November's ballot.
State Rep. Pat Fallon, R-Frisco, said Texas is a leading example to the rest of the country on how business should be done.
"To maintain our economic success and continue attracting businesses, we must address our rapidly growing state's infrastructure needs," Fallon said.
He said although Prop. 1 would not fully solve transportation funding issues, it is a step in the right direction to prioritizing a core government function.
"I support Prop. 1 because it provides a steady stream of additional funding for our state's growing transportation needs and will help keep Texas the greatest state in the greatest country in the world," he said.
