Texas Lawmakers Let Voters Decide on Transportation Funds

Texas lawmakers agreed to let voters decide whether to raise highway funds by diverting some oil and natural-gas tax revenue from reserve accounts in a state where spending on roads and bridges hasn’t kept pace with growth.

The financing increase won final passage in the House of Representatives and Senate yesterday. To become law, it must be signed by Republican Governor Rick Perry and approved by voters next year. Under the proposal, transportation funding would rise about $1.2 billion, or 12 percent, in 2015, state forecasts show.

The vote “moves our state closer to securing a strong economy well into the future by providing more resources for building and maintaining a transportation system that will keep our economy growing and our population moving,” Perry said yesterday in a statement.

Texas, whose population of 26.1 million makes it the second-largest state, added 5.21 million residents from 2000 to 2012, worsening traffic congestion and prompting business leaders to press for more money for roads. Texas spends about $10 billion annually on transportation and needs an additional $5 billion a year to keep up with growth and repairs, according to the state Transportation Department.

‘Emergency Situation’

“If voters don’t approve this in November 2014, it puts us in more of an emergency situation,” said state Representative Joe Pickett, an El Paso Democrat who sponsored the bill. “We should now let the public decide.”

Texas spent $427 per capita in fiscal year 2011 on highways, compared with $391 per capita in California, the largest state by population, according to the most recent available data from the Tax Policy Center in Washington, which researches tax and budget matters. That includes state, local and federal money.

A gas tax of 20 cents a gallon, dedicated to roads, hasn’t changed since 1991, and efforts to increase vehicle-registration fees failed this year, reflecting opposition to levy increases by Perry and the Republican-led legislature. Perry has said he supports more highway spending.

“We are increasing funding for transportation without raising taxes, which sends an incredibly strong message that Texas is committed to keeping the wheels of commerce turning, while protecting taxpayers,” Perry said about the bill.

The state has issued or guaranteed more than $15 billion of road-related bonds over the past decade and lawmakers are averse to additional debt, said Vic Suhm, executive director of the Tarrant Regional Transportation Coalition, a Fort Worth group that favors additional spending.

Production Taxes

The plan approved by the legislature would redirect half of oil and gas production-tax revenue now sent to state reserves.

“It’s a significant bump, although we don’t think it is nearly enough,” said Lawrence Olsen, executive vice president of the Texas Good Roads and Transportation Association, an Austin-based group representing businesses.

The measure would let a committee of 10 lawmakers reduce the flow of oil-tax money for roads if they conclude the reserve fund isn’t at an adequate level.

Opponents of the bill said use of the so-called rainy day fund should be restricted to emergencies and that withdrawals, in the form of diverted revenue, may hurt the state’s credit rating. Backers said the fund would retain at least $5.8 billion over the next two years, making a credit downgrade unlikely.

To contact the reporter on this story: David Mildenberg in Austin at dmildenberg@bloomberg.net

To contact the editor responsible for this story: To contact the editor responsible for th William Glasgall at wglasgall@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.