Funding Amendment Going to the Voters


June 1, 2015


The Texas Senate approved by a vote of 31-0 and the Texas House followed with a vote of 141-1. With that state lawmakers offered Texas voters the opportunity to approve additional constitutionally dedicated revenue necessary to fund highways and bridges. The proposed amendment would initially provide $2.5 billion a year to the State Highway Fund for non-toll projects. In subsequent years it would provide by formula an additional $250 million or more per year to dedicated funding -- all from existing sales tax revenue streams with no increase in tax rates or fees.


The decision address transportation funding will be made by voters on November 3, 2015, and the new funding would start in September 2017 (FY 18). Last year voters gave 80% approval to a constitutional amendment dedicating a portion of oil and gas production tax revenues to highways.


The following commentary by transportation writer Ben Wear appeared in the Austin American-Statesman on June 1st under the headline:


TxDOT Funding Has Its Moment


A legislature is mostly about saying no.


No to dumb ideas, or to intriguing ideas not fully baked. Thumbs down on special favors (maybe), or bills filed only to make an ideological point or fulfill a promise to a constituent. And, quite often, a confounding rejection of good ideas as well, because the timing wasn’t right, or the sponsor did a lousy job of selling the idea, or, usually, because the people in power just saw it differently.

So too with the 84th Texas Legislature, which will close up shop by midnight Monday after considering 6,276 bills and 200 proposed constitutional amendments. As of late last week, about 830 of those had either been signed by Gov. Greg Abbott or were awaiting his signature or veto.

Some more were certain to join that pile in the weekend’s final flurry of lawmaking. But the point is, most pieces of legislation wind up dead.


In the transportation realm, the Legislature rejected a long list of initiatives this session: going statewide with regulation of transportation networking companies, such as Uber and Lyft; banning texting while driving (yet again); squelching a high-speed rail plan in East Texas; letting Tesla sell its electric cars directly to Texans on Texas soil; allowing transit buses to drive on highway shoulders, and motorcycles buzz in between slow-moving cars; and, in general, putting the brakes on toll roads. All no.
Given the negativity inherent in the process, that makes what happened with transportation funding this session even more startling, and worth examining.
 The Legislature, after 20 years of voting against new revenue sources for Texas highways, in 2013 had passed a proposed constitutional amendment to redirect oil and gas severance taxes from a state reserve account to Tx-DOT. Voters approved it by almost 80 percent of the vote in November. Lawmakers this session could have stood pat with the $1 billion or more (it will fluctuate with the oil business’ fortunes) that measure provides for highways.
 Instead, both the House and Senate in this session’s  waning days overwhelmingly passed Senate Joint Resolution 5, which starting in two years — if voters approve it in November — would give TxDOT an additional $2.5 billion a year (and growing with the economy) in sales taxes, money currently being spent on other state functions. Beyond that, earlier in the session lawmakers approved a budget that will end “diversion” of about $650 million annually in gas taxes from other departments.
Those two measures (again, assuming voters approve SJR 5), along with the 2013 amendment, mean that by 2020 or so TxDOT will have something close to $5 billion more a year in spendable cash than it had in fiscal 2014. That would be a jump of close to 50 percent in just six years.

A game changer for Texas highways, in other words. And in its effect on the daily lives of Texans, arguably, far more meaningful than the more high-profile wrangling this session over smallish tax cuts, or who can or can’t carry a Beretta on his or her hip.

Why now? Why did the Legislature bestir itself to a “yes?”
Start with the premise that most legislators like getting roads built in their district for the simple reason that almost all voters like that as well. That has been the case for decades.
But it is particularly true in a state experiencing feverish growth and traffic congestion that is both frustrating to constituents and, if left unaddressed, potentially ruinous to the state’s vaunted economic engine. No legislator could have missed that message from home, or from the business lobby.
The Legislature, historically conservative and averse to tax increases, has hardened that position over the past couple of decades. Aversion has become something closer to an outright prohibition of anything resembling a new tax. Toll roads and other debt financing of road building, when former Gov. Rick Perry began pushing them 15 years ago, for a good while seemed like a crafty way to wire around that stance.
Tolls would be a user fee, not a tax, payable only by those who choose to use what would be faster roads. But build enough of them in such places as Dallas, Houston and Austin, as has occurred over the past decade, and it no longer feels like a choice.   Something of an urban backlash began.
And as for three other debt programs (all of them approved by voters last decade as constitutional amendments), once TxDOT borrowed the $18 billion or so authorized by them, the agency suddenly found itself spending about 10 percent of its budget — $1.2 billion a year — just on debt payments. Water from that well suddenly seemed very sour.
Enter state Sen. Robert Nichols, R-Jacksonville, and his Democratic running buddy, state Rep. Joe Pickett of El Paso. The two transportation committee chairmen, given their years immersed in highway issues, have accumulated tremendous respect and personal capital in the Legislature. Nichols, with his engineering background and years on the Texas Transportation Commission, is the no-nonsense wonk. Pickett, who has a history   of challenging TxDOT management, has cred as an honest broker.

Together, they sold the 2013 amendment, first to the Legislature and then to editorial boards and voters in a two-man, bipartisan road show around the state before the November election. This session, Nichols, who had tried to pass SJR 5’s idea of using vehicle sales taxes for TxDOT in 2013, brought back a modified version. Pickett countered with a different bill using general sales taxes. The final version blends their two ideas. Both have the virtue of being neither a tax nor fee increase, but rather a reshuffling of existing revenue.

SJR 5 turned out to be a multibillion-dollar idea with the right timing, and the right legislators pushing it. Only the voters can say “no” now.