Legislators continue discussions on how to fund TxDOT

Bills in the Texas House of Representatives and Senate range from authorizing "century bonds," which would allow 100-year loans at a low fixed rate, to increasing fees for driver's licenses to raising registration fees or fuel taxes for the first time in two decades.

But halfway through the session, which ends in late May, no clear plan has yet been outlined on how to solve the funding issue in a state that runs out of bond money in 2014.

New funding source needed

State Sen. Kirk Watson, D-Austin, is pushing for a $50 increase in annual motor vehicle registration fees, which currently start at $50.75 per year. County governments have the power to raise that fee by as much as $11.50, and several have, including Travis and Williamson counties.

Lt. Gov. David Dewhurst has promised to propose an amendment to the budget passed by the Senate Finance Committee in early March that would authorize at least $1 billion from the state's Economic Stabilization Fund, also known as the rainy day fund, for a revolving loan program for local transportation projects.

Gov. Rick Perry, who held off efforts to use the fund during the 2011 session, has endorsed the use of $1.7 billion for transportation projects from the fund, which is expected to have a record-high balance of $11.8 billion in the next two years.

Additional TxDOT funding could address some local transportation concerns. James Noack, Montgomery County Precinct 3 Commissioner, said more TxDOT funding could provide the county matching dollars for bond referendums, like the $200 million bond referendum which failed to receive voter approval in 2011.

"If that funding is available, it's just another way to go out and better propose bond issues to voters," Noack said. "We wouldn't have to go it alone."

Several transportation projects in South Montgomery County could use state funds, Noack said, including congestion at the intersections of I-45 and Rayford and Sawdust roads and at Robinson and Hanna roads, as well as another north-south thoroughfare east of I-45.

Using rainy day funds

Bills have also been filed in the House to withdraw money from the rainy day fund, but the fund cannot be used for any revolving cash flow, so another funding mechanism for maintenance and operating costs must be found.

Leaders have suggested more than $1 billion can be found in dedicated fees that are diverted from highway projects, but House Transportation Committee Chairman Larry Phillips has argued the amount might be closer to $300 million—nowhere near $4 billion more in annual funding TxDOT has requested.

Proposed fee increases

House Speaker Joe Straus has said the $25 fee paid for driver's license renewals every six years should be looked at as an additional revenue stream, and bills have been filed that would both increase that fee and decrease the amount of time between renewals.

An omnibus bill by Rep. Patricia Harless, R-Spring, addresses several methods of funding in a proposal that would require voter approval for transportation funding and collects nearly $5 billion annually for highways. The bill would include a $50 increase in registration fees, a 10 cent rise in the gas tax and a redirection of some sales taxes from car sales into highway maintenance.

Members of the House Transportation Committee say those bills may not be the solution, as it's likely to be broken into piecemeal bills and approved separately by a subcommittee and budget writers before hitting the floor of House and Senate.

But a Houston-area taxpayer advocacy group, Texas Future, endorses Harless' plan, saying it costs motorists less than one penny per mile and avoids new toll roads.