Restrictions on Funding for Highway Projects With Tolled and Non-Tolled Elements Remain Unresolved

May 2018

It seems like a simple question: Can funding from voter approved Proposition 1 or Proposition 7 be used to pay for constructing the non-tolled elements of a highway project that includes optional tolled managed lanes like those now in place or under construction in Dallas, Fort Worth, Austin and west Houston?



That question was put to the Texas Attorney General's Office by State Representative Joe Pickett of El Paso, who sponsored and campaigned for Propositions 1 and 7 which are now part of the Texas Constitution. Prop 1 specifically provides that the resulting funds can be used for constructing and maintaining public roadways "other than toll roads." Prop 7 says revenue must be used to fund "nontolled roads."


In the end Texas Attorney General Ken Paxton concluded in his advisory opinion that neither the Constitution nor the law define the term "toll roads" and that no case law has occurred that would fill in the blanks. "We cannot determine whether a court would construe Propositions 1 and 7 to allow those monies to be used for ‘toll projects’ when those provisions refer to ‘toll roads,’" the opinion reads.


This question surfaced in transportation circles shortly after the propositions were passed in 2014 and 2015 with some TxDOT watchers feeling strongly that the mixing of restricted and unrestricted funds had been ruled out to get the two-thirds votes from lawmakers needed to put the propositions on the ballot.


The problem came to a head when TxDOT and the Texas Transportation Commission last year contemplated combining Prop 1 and Prop 7 money with other money on highway expansions that include tolled lanes but with specific plans to carefully divide the projects and project accounting so that none of the restricted funds were applied to the tolled lane elements.

Toll road opponents criticized that approach arguing it would lead to a constitutional violation.

Pickett, a member and former chairman of the House Transportation Committee, often points out that he is both in favor of toll roads and against them depending on the situation and in recognition that lawmakers have shown no willingness to otherwise fund highways at the level required to meet the state's growing needs.

The AG opinion writers left the door open to TxDOT doing such side-by-side projects. But the AG said TxDOT could not do so “with no mechanism for ensuring that it spends the funds as constitutionally required, that is, only on non-tolled roads.”


In a letter to the Transportation Commission after Paxton's opinion, Rep. Pickett suggested the commission adopt a policy on how to handle projects that are in the Unified Transportation Program. "The Legislature may have their own opinion within a year or so, but I feel it necessary to take action before then if possible," he wrote.

Paxton's opinion notes that, for the moment at least, the question is not urgent. Shortly after Pickett made his request for the AG opinion, first Lt. Gov. Dan Patrick and then Gov. Greg Abbott made public statements indicating that they wanted TxDOT to refrain from committing to any new toll road projects. The Transportation Commission then reversed course and voted to remove the tolled components from several of its long-term construction projects. That move is expected to result in some multi-year delays as projects wait for pay-as-you-go funding.


Optional managed tolled lanes like the North Tarrant Express and the SH 183 Airport Freeway project have been paid for with borrowed money to be paid back with toll revenue, a funding tool that allows projects to be advanced much more rapidly.