The bill—Senate Joint Resolution 5—would amend the state constitution to dedicate $2.5 billion of the general sales tax to the State Highway Fund (SHF) beginning in 2018 and then 35 percent from motor vehicle sales tax revenue after the first $5 billion beginning in 2020. Transportation funding from motor vehicle sales tax revenue is expected to be about $500 million to $600 million in 2020, said Scott Haywood, president of the nonprofit transportation advocacy group Move Texas Forward.
The funding mechanisms of the bill have strings attached to them in the event of a downturn in the state economy. The dedication of funds from the general sales tax could be halted if sales tax revenue comes in lower than $28 billion in a fiscal year. However, Haywood said, the state is above those numbers and is not expected to fall that far.
Because the bill aims to amend the constitution, it will need to be approved by Texas voters in the November election.
“I am very excited that the House, Senate and governor were able to come together on SJR 5, which is critical for the future of transportation in our state,” said state Sen. Robert Nichols, R-Jacksonville. “This constitutional amendment will be sent to the people of Texas for their consideration. If passed by the voters, it would be the largest single increase in transportation funding in Texas history.”
Traffic and population growth
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Finding additional funding for transportation was a top priority at the Capitol this legislative session. Due to the significant population growth in the state, the Texas Department of Transportation requires about $5 billion annually to keep up with existing demands, said Veronica Beyer, director of media relations for TxDOT.
“As Texas grows by more than 1,000 people daily, we are seeing more congestion and therefore an increasing need to build, repair and maintain our roadways,” Beyer said. “To be able to keep up with this increasing demand, it was imperative we find a sustainable funding solution for our state.”
In Houston, the increased focus on transportation will be vital to mitigate additional traffic congestion as the population continues to grow outside of Loop 610, said Jeff Taebel, director of community and environment planning for the Houston-Galveston Area Council.
“We are predicting the addition of another 1.1 million people in the [northwest Harris County area] in the next 25 years,” Taebel said. “That is going to result in a lot more vehicular travel. Even though the region is only going to grow by about 40 percent overall, vehicular travel is going to increase by 60 percent.”
Many cities in the area are already in need of more transportation funding. The H-GAC 2015-18 Transportation Improvement Project lists more than 200 applications for priority mobility funds in the Houston-Galveston area, including three projects located along major thoroughfares in Tomball and Magnolia.
SJR 5’s origins
Both the House and Senate proposed major transportation funding bills this session using sales tax revenue that could provide more than $2 billion a year to the SHF.
Nichols co-authored SJR 5 in February. The bill would have dedicated the first $2.5 billion of motor vehicle sales tax revenue every year to the general fund, the second $2.5 billion to the SHF and split any remaining revenue between the two, Haywood said.
House Bill 13 proposed an alternate sales tax revenue solution. The bill, authored by state Rep. Joe Pickett, D-El Paso, suggested dedicating the first $3 billion of general sales tax revenue to the SHF in addition to 2 percent of the remainder of sales tax revenue.
Both bills received nearly unanimous bipartisan support and were approved by their respective chambers. However, with two different visions to achieve the same goal, Haywood said the House and Senate each sent five members to a joint committee in May to hash out the legislation and come up with one bill that satisfied both chambers. The result was a compromise of both the House and Senate bills that was still dubbed SJR 5.
Other legislative solutions
“Even though the region is only going to grow by about 40 percent overall [by 2040], vehicular travel is going to increase by 60 percent.” —Jeff Taebel, director of community and environment planning for the Houston-Galveston Area Council
Although SJR 5 could provide more transportation funding than any other piece of legislation considered this past session, legislators considered other avenues to find additional revenue for statewide transportation improvements.
Both the House and the Senate found a combined $650 million a year in the next biennium for the SHF through the appropriations process, Haywood said. The additional money comes from funds previously diverted from the SHF to the Department of Public Safety’s budget.
“Both budgets make sure that all funding that goes to the State Highway Fund will go to maintain roads to the state,” Haywood said. “They have definitely taken care of it under the current budget. Over the long term, that’s another [issue].”
H-GAC Director of Transportation Alan Clark praised the Legislature for stopping the diversion of revenue from the SHF this biennium. He said the uncertainty of long-term mobility funding is a challenge for H-GAC.
“It’s important because TxDOT can’t count on that for 20 or 30 years,” Clark said. “So they won’t allow us to plan on spending that level of funding for 10 or 20 years.”
Despite pulling funds from the DPS budget the next two years for mobility projects, Haywood said other areas of the state’s budget should not be negatively affected.
Future funding
Andrea French, executive director for Transportation Advocacy Group Houston, said because the $5 billion needed annually only maintains existing congestion levels, future legislative sessions will have to find additional transportation funding options.
“It’s great that we can look at existing revenue streams and transfer them to highway funding,” French said. “But I think we still need to look at the philosophical notion that user fees are really important and that we pay to use the roads because they are essentially a service that we are provided.”
