Texas Still Headed Toward Major Highway Funding

Shortfall After Legislation Withdrawn


May 13, 2013


Texas continues to hurdle down a ramp toward a dramatic transportation funding cliff.  As the current session of the Texas Legislature nears final adjournment on Memorial Day no legislation has been passed to fill the $4 billion per year shortfall coming in highway project funding.


Only one bill that could have added new transportation funding made it out of the House Appropriation Committee during the legislative session.  The bill, HB 3664, by Rep. Drew Darby of San Angelo would have increased vehicle registration fees by $30 per year.  It made it to the House floor for consideration on May 9th and after an hour of debate was withdrawn and killed by the author.


Rep. Darby indicated he was pulling down his bill because Gov. Rick Perry had the previous day signaled that he would block a vehicle registration fee if passed by the Legislature.

The $30 registration fee increase would have raised approximately $700 million in new revenue per year.  Before the bill was withdrawn the House passed by a vote of 106 to 30 an amendment by Transportation Committee Chairman Larry Phillips.  The two part amendment would have lowered the fee increase to $15 per year and would have directed a portion of the state’s vehicle sales tax into the Highway Fund. 

The result is that it is unlikely that any legislation will pass in the current regular session that will help address the $4 billion per year gap in critically needed transportation project funding.   House members speculated that transportation funding could be considered during a special legislative session this summer. 

The Transportation Advocates of Texas (TAoT) supported the Darby bill and several other pieces of legislation that would have addressed highway funding which is set to plunge after this year.   

The TAoT executive committee has extended a special thank you to all the organizations and individuals statewide that worked tirelessly in recent weeks to build support for additional highway funding.  The offices of all House members were contacted on multiple occasions during a concerted education effort.  The coalition stressed support for all the various alternative funding mechanisms could be used to address the highway funding cliff.  Because of House calendar deadlines none of the alternative bills can now be considered.

The Vehicle Sales Tax Proposal
The TAoT coalition has strongly supported CSHB 479 and the companion CSHJR 29 during the legislative session.  CSHB 479 was jointly authored by Rep. Linda Harper-Brown, Rep. Allen Fletcher, Rep. Ryan Guillen, Rep. George Lavender and Rep. Cecil Bell and co-authored by 20 more House members.  The bills would have ended diversions from the highway fund for purposes not related to construction and would have harnessed the growth in vehicle sales tax revenue in future years.

CSHB 479 would have capped the amount of vehicle sales tax flowing to the state General Fund at $2.5 billion per year.  Growth in vehicle sales tax revenues above $2.5 billion would flow to the State Highway Fund starting in FY 2016.  The amount in the first year is estimated to be approximately $1.2 billion with that amount expected to grow over time.  The proposed legislation also prohibited diversions from the Highway Fund starting in FY 2016 (approximately $700 million per year).  This provision would have been subject to approval by Texas voters in a constitutional amendment election.  The combined result would be approximately $1.9 billion in additional funding going to transportation in FY 2016 with the amount growing to $2.5 billion by FY 2020 as shown in this graph.


[SEE larger version of graph]

TAoT joined with some 105 organizations and individuals during an April hearing to strongly support CSHB 479 and CSHJR 29.  Despite this wide support the bill was never put to a vote by the Appropriations Committee.  The May 9th House floor vote on the Phillips amendment shows that there was strong support for the highway funding changes proposed in CSHB 479 and CSHJR 29.

Rider Scott, TAoT legislative committee chairman and executive director of the Dallas Regional Mobility Coalition, noted that those testifying at the April hearing represented the most diverse and broad-based list of groups he could recall ever appearing to back a transportation bill being considered by the Legislature.

A Day of Reckoning
During the debate on Darby’s bill, Rep. Phillips and Rep. Joe Pickett of El Paso, former chairman of the committee, both made strong statements about the urgent need to provide more funding for highways and the importance of making funding predictable and sustained.

On the day of the debate a Dallas Morning News editorial called it a Day of Reckoning on Texas Highways.  “The test comes today on whether Texas House members really want to address the state’s transportation needs or whether they’re content to give the problems mere lip service.”

“Voting for the measure is the responsible thing to do, considering evidence that the state’s roadway system is overburdened and underfunded….”   “Lawmakers have been dodging their responsibility for too long. The state’s motor fuels tax was last raised 22 years ago, in 1991. Texas has since added more than 9 million people — plus their cars and trucks. As cars get more efficient, the tax is not paying the freight, but lawmakers have refused to touch it. Instead, they have hatched various debt schemes to build highways — as though the borrowed billions don’t have to be paid back — and pushed metro areas to slap tolls on more and more roads.”

“The scheming should stop, and the House should own up to the cost of being a high-growth state that prides itself as a great place to do business. Texas won’t remain that business haven for long if state leaders are ambivalent about a modern highway system,” the newspaper’s editors wrote.
Darby and Pickett agreed during the debate that the crisis is building and that it will be more urgent than ever when the Legislature meets again in 2015.

Sputtering to a Stop
Austin American-Statesman transportation writer Ben Wear summed up the situation in a May 13 article by noting:  “The drive to find new and sustained funding for Texas transportation projects, suffused with energy and ideas when this legislative session began in January, sputtered to a seemingly final stop late Thursday afternoon.”  He went on to quote Rep. Pickett saying, “We’re still going to be able build roads for another 720 tomorrows.  After that, it gets a little tough. It gets very tough.”  He was referring to the fact that the state has been building roads largely through $18 billion in debt over the past 12 years and that all the authority for new debt will be exhausted in the next two years.

Read all of Wear’s article [HERE].