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 without a way to pay for increasing infrastructure needs.
RTC statistics show that gas tax revenue—which, along with registration fees and federal funds, comprise the State Highway Fund—has 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 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 Prop. 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.
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.
Local support
The Texas House of Representatives voted 124-2 in August 2013 to put Prop. 1 on this November's ballot.
State Rep. Giovanni Capriglione, R-Southlake, said that although Texas leads the nation in economic growth and job creation, its residents all experience that growth in the form of traffic delays.
He said Prop. 1 would allow the state to keep building and maintaining roads without raising taxes or fees.
"Over the past 10 years the state of Texas has borrowed billions of dollars to fund our transportation infrastructure," he said. "Our ability to borrow is capped, and a more fiscally conservative option is to use existing revenues to fund our highways. Transportation expenses have been growing at a reasonable rate over the past decade, below the rate of population growth plus inflation. However, the borrowing restriction means there is an upcoming shortfall. If Prop. 1 passes, this amendment will cover much of that shortfall."
The Grapevine Chamber of Commerce board of directors agreed to support Prop. 1.
"The board understands that there are approximately 1,200 people a day moving to Texas and that we must continue to invest in our infrastructure," chamber CEO RaDonna Hessel said. "This is and will continue to be a quality of life issue."
Hessel said that although Prop. 1 would not solve the entire problem it will allow an increase of funds to the SHF while still growing the balance of the state's Rainy Day Fund.