Special Section on Prop 1 - Fallout as oil bust means less money for roads

Prop 1 special section

Link to article here.

Doubts about Prop 1 loom in light of oil bust
By Terri Hall
January 4, 2015

When Texas lawmakers punted on road funding with passage of Proposition One last year, they never anticipated the Texas oil boom would abruptly crater. It took three special sessions to round up the two-thirds majority needed to place a Constitutional amendment on the ballot for Texas voters to decide if they wanted to raid half of the state’s oil and gas severance tax (a tax on new oil wells) and divert those revenues to the State Highway Fund. With the promise that the new funds could not be used to build or support toll roads, Texas voters gave the green light. But the euphoria lawmakers felt after getting away with gaining new highway funds without ending diversions of the gasoline tax has quickly turned to doubt as the plummeting price of gasoline has severely tempered oil production in the Lone Star State.

Outgoing Texas Governor Rick Perry made building toll roads the centerpiece of his transportation legacy, particularly the advent of public private partnerships (or P3s). From the controversial Trans Texas Corridor toll road network that would have confiscated over 580,000 acres of private property and conferred it to a private toll road developer with direct ties to the Governor’s office, to slapping tolls on most every freeway in metro areas and building tolled outer loops around most semi rural and even rural communities, Perry’s toll road network has proven to be one of the most unpopular and most expensive new taxes ever conceived. Tolls in urban areas are now based on congestion, not the cost of building the lanes and retiring the debt, and can be as high as 50 cents a mile to use them during peak hours or over 80 cents a mile when the toll lanes are privatized using P3s.

So it’s no wonder Texans voted for more highway funding. They thought it would mean fewer toll roads. Yet several local planning boards set-up by federal law known as Metropolitan Planning Organizations (MPOs), in Dallas-Ft. Worth and San Antonio, quickly announced that Prop 1 funds freed-up other money in the highway fund to enable them to push urban rail and other public transit projects. They also promised more toll roads.

So far, Prop 1 will not be used for major congestion relief projects as legislators intended and the Transportation Commission affirmed in its December meeting. Many Johnny-come-lately projects that appeared out of thin air are snagging the new road funds while all the current toll projects continue full steam ahead - and there are hundreds currently on the books. In San Antonio, the MPO board specifically promised that if new funding became available, they would turn toll lanes back to free lanes on US Highway 281. Not only is US 281 not getting Prop 1 funding, the Alamo Area MPO just added over 70 miles of new toll lanes to its plans in December. So Texas voters are already feeling betrayed by the broken promises and road funding bait and switch that never seems to come to an end.

Gas tax diversion problem

Like many other states, Texas diverts a portion of the state gasoline tax to non-road purposes. Twenty-five percent gets sent to public schools per the Texas Constitution, and an additional 10-15% gets diverted to fund the Department of Public Safety and other state agencies, mostly to shore-up public pension funds. But some diversions have gone to enhancing benefits in the Attorney General’s office or for things like tourism promotion or computers in the Comptroller’s office.

The state highway fund routinely gets plundered to plug holes in the budget. Budget writers made some modest improvements in the 83rd session in 2013, but by and large, the gas tax diversion problem has yet to be fixed. Texas taxpayers only saw $534 million of $1.2 billion in non-education diversions returned to roads, with a heavy reliance on more toll roads to fill the $4 billion (now magically claimed to be a $5 billion) annual funding gap.

All taxes and fees levied on vehicles and trucks should be going to the highway fund, period. Over $3.3 billion in sales taxes on rental cars and new and used vehicles get dumped into the general fund, not the highway fund, annually. Many lawmakers see this as the answer to road funding shortfalls, yet the least volatile, most affordable, and most efficient user fee to fund roads, the state gasoline tax, has remained fixed at 20 cents a gallon for over 20 years. Any talk of increasing it to keep pace with inflation has been dead on arrival.

Prop 1 was another get-out-of-jail-free card played by the legislature, and now the promise of oil and gas severance tax gold has deteriorated into the proverbial lump of coal. Unlike oil and gas production that’s tied to the price of oil, the state gas tax is a fixed amount and doesn’t vacillate as easily. With the next legislative session starting in just a few days, Texas lawmakers need to engage in some real introspection and start dealing with the road funding shortfall without more unproven gimmicks nor the reliance on volatile, unpredictable revenue sources that aren’t directly tied to usage of the road.

Many argue tolls are the ideal user fee, however, there are no more Texas toll projects that can pay for themselves with just the toll users. All require massive taxpayer subsidies, which is double taxation. So the best user fee remains the gasoline tax. End all gas tax diversions, institute sweeping changes in how road funding gets allocated (ie - all road funds go to roads only, not transit or rail boondoggles paid for at auto users’ expense), and fix the structural road funding shortfall without delay. That’s a pro-taxpayer prescription to get Texans moving again.

Alamo planning board hastily obligates Prop 1 money, adopts more toll roads

Passage of Prop 1 opens door to fixing 281 without tolls

Link to article below here.

Alamo Area MPO Votes Yes on Toll Roads, Says Streetcar is “Paused”
by Greg Harrison
Empower Texans
December 12, 2014

In their meeting this past Monday, the Alamo Area Metropolitan Planning Organization approved Mobility 2040: their long range transit plan.  Allocating 10 years worth of funds from Proposition 1, which voters approved this November, Mobility 2040 will add nearly 40 new transportation projects.

Voters will recall adopting Proposition 1 in November: a measure which diverted transfers to the Economic Stabilization Fund into the State Highway Fund to be used for construction, maintenance, and rights-of-way acquisition for non-tolled, public roadways.  In order to help sell the proposal, voters were told explicitly that these funds would not be used for toll roads.

As we have observed, this gives rise to the officially unaddressed concern that a sudden infusion of cash into unaccountable Regional Mobility Authorities (RMA’s) would “free up” other funds, which can then be spent on toll roads, essentially violating the spirit of their promise to voters.

Unfortunately for San Antonio residents, these promises are often a distinction in name only; recently demonstrated through Bexar County Judge Nelson Wolff’s irresponsible “swap” of $92 million with TxDOT to avoid restrictions on fund usage promised to voters.  Voters will recall having approved the Advanced Transportation District on the premise that funds would not be used for the streetcar project.

As a workaround, Wolff swapped those funds with TxDOT in order to do just that, and in the process, cost the county the ability to leverage nearly $500 million in matching state and federal highway funds.  San Antonio officials seem to have a tendency of not letting pesky promises to constituents get in the way of funding their unpopular pet projects, and the AAMPO’s vote Monday was more of the same.

Well, San Antonio residents have been lied to again. Now, Proposition 1 funds will be going towards toll roads with the AAMPO’s approval of Mobility 2040.  Allocating $605 million in toll projects, the AAMPO plan adds toll lanes to I-10, Highway 151, and I-37/US 281, in addition to already existing toll projects on US 281, Loop 1604, I-10, and I-35.

Contradictorily employing the phrase “complete streets,” the AAMPO plan also includes $48 million to be spent on bike lanes, which ultimately decrease roadway car capacity.

Critics, many of whom were in attendance, expressed their disapproval during public comment, referring to many of Mobility 2040’s unpopular aspects, including broken promises, double-taxation, and social engineering to get people away from driving cars. 

Despite many constituents voicing these concerns, their criticism fell on deaf ears when only Councilman Mike Gallagher voted against the plan.

More interesting, however, is the fact that by the MPO’s own admission, an even more controversial measure remains up for discussion, despite being shot down and fought at every turn. 

After their vote on Mobility 2040, the board presented slides regarding future projects and appropriations, which included the overwhelmingly unpopular streetcar proposal, referring to it simply as “paused.” 

Despite the impressive friction put forward against the proposal by engaged citizens, central planners in San Antonio won’t give up on their pet boondoggles easily.

Link to article here.

Planners Doubling Down on Proposed Toll Roads
By Jim Forsyth
WOAI Radio
Monday, December 8, 2014

  Barely a month after Texas voters overwhelmingly agreed to free up as much as $1.5 billion more a year for road construction, the Alamo Area Metropolitan Planning Organization today is set to approve a new long term transportation plan that doubles the number of roads which will involved 'managed lanes,' which is government-speak for toll roads, News Radio 1200 WOAI reports.

  "So here we go, round two, more toll roads, even though we voted to give nearly $2 billion a year to TxDOT in what we were told would be a way to get out of our hole and away from all these toll projects," Terri Hall, the founder of Texans Uniting for Reform and Freedom and an anti-toll activist, told News Radio 1200 WOAI.
  In addition to the toll lanes which have already been proposed on 281 from Loop 1604 to the Comal County Line, Loop 1604 from Bandera Rd. to Interstate 35, I-10 from 1604 to Boerne Stage Road, and I-35 from downtown to the Guadalupe County line, the new plan also includes the following toll projects:
I-10 from 410 on the East Side to the intersection with State Highway 130 in Marion
Highway 151 from Loop 410 to Loop 1604, past Sea World.
US 281 from southeast San Antonio to downtown
and I-10 from Boerne State Rd to the Kendall County line.

  The MPO points out that the money from Proposition One, which would allow a portion of the state's Rainy Day Fund, has not yet been obligated.  A spokesman says the proposals being debated today cover the years through 2040, and are being placed on the agenda so environmental impact studies and other measures can begin in what is always a lengthy construction period.  They say no funding mechanism has been determined as yet, and the projects are being listed as 'managed lanes' because of that.

  "Until a project is listed within  Transportation Improvement Program, we do not have funding committed for the project," MPO spokesman Leroy Alloway said.  "Decisions as to specific funding for each project are made as funds become available and are assessed against regional priorities and needs."

  But Hall says the MPO and other city planning officials like VIA Metro Transit have repeatedly ignored the overwhelming wishes of the people to spend money as it comes available, from the Proposition One funding to the money that would have gone to build the downtown streetcar on highways.  But she says tens of millions of dollars in the MPO plan is dedicated to what she calls urban planners 'creepy obsession' with mass transit and bike lanes.

  "That is not the priority, one to three percent of the traveling public commutes by mass transit, the vast majority of us are in our cars," she said, adding that she doubts many members of the MPO will arrive at today's meeting by bus.

  "At the end of the day, they want us to do something they are not willing to do themselves.  When our elected officials start carpooling and using mass transit, then they can start to lecture us about changing our behavior."

  And Hall says, unlike previous debates about toll roads, there is now a function toll road in this area that planners can look to for an example of the success of toll roads in the area---the State Highway 130 project, which has had its bond rating downgraded to 'junk status,' and at one point this year even missed a bond repayment deadline.

  "State Highway 130 is the absolute poster child for the entire failed toll road policy," she said.  "It is a bankrupt policy."

  Toll road opponents also point to a study done by Commissioner-elect Tommy Calvert for the Regional Mobility Authority, when it first proposed the toll lanes along I-10, Loop 1604, and US281.  His study concluded that the average household income of people who live within a half mile of those routes and would be the most likely to take the highways is under $45,000 a year.  In effect, families which have no discretionary income to start paying what amounts to a $200 to $300 a month tax just to get to work.

  "These would be Lexus Lanes, roads for the rich, and everybody else, the great majority of people, will become second class citizens," she said. "That is unacceptable.  This is Texas, folks.”
Link to article here.

Officials debating how to spend Prop 1 money
By Aman Batheja - The Texas Tribune
November 28, 2014

Eighty percent of Texas voters approved a measure this month to increase transportation funding without raising taxes or fees. Proposition 1 is expected to add billions to the state highway fund by dedicating some of the tax revenue being collected from the oil boom to road construction and maintenance.

Toll Road opponents rallied in Greenville on October 14th. Proposition 1 authorized the use of additional funds for transportation projects. Supporters of the measure drew on increasing public opposition to toll roads.

The first payment, an estimated $1.7 billion, is likely to be deposited in the state highway fund in December.

In the meantime, lawmakers, state officials and local stakeholders are working out how they plan to spend the extra dollars. According to the language on the ballot, the money can go toward “the completion of transportation construction, maintenance, and rehabilitation projects, not to include toll roads.”

For state Rep. Joe Pickett, a Democrat from El Paso who chairs the House committee on transportation finance, those who backed the proposition are expecting spending on projects that address congestion on local highways.
“I wouldn’t like to see trolley projects, bike lanes, bike shares,” Pickett said at a recent hearing on transportation funding. “What I’m looking at is why people voted for this.”

The Texas Department of Transportation puts its annual budget shortfall at $5 billion. State officials have warned that Proposition 1 will, at best, perpetually relieve a fraction of that for as long as the drilling boom endures.

About half the money is likely to go toward transportation projects in the state’s large metropolitan regions of Austin, Dallas, Fort Worth, Houston and San Antonio, according to John Barton, deputy executive director for the transportation department. State officials have proposed spending 15 to 20 percent of the money in the oil field regions of South and West Texas, where drilling-related truck traffic has badly damaged rural roads and contributed to a spike in accidents.

In Austin, where voters approved the statewide proposition but rejected a local one that would have expanded a fledgling light rail system, the Capital Area Metropolitan Planning Organization has pledged its share of Proposition 1 funds toward relieving congestion on the city’s main artery, Interstate 35.

The Houston area will likely use the money on a variety of road projects to address congestion and reduce “our high vehicle crash rate,” said Alan Clark, director of transportation planning at the Houston-Galveston Area Council. Since the money is explicitly barred from going toward toll projects, none of it will pay for a portion of U.S. 290 that is being reconstructed with a toll lane, he said. However, some money could go toward work on other portions of the highway that would not have tolls.

Knowing how much money will be coming in under Proposition 1 could be a challenge, Clark said, given that the amount will vary with oil drilling activity.

“We’re a little bit unsure how we’re going to anticipate the availability of those funds and make sure that we have really high-value projects ready for their use,” Clark said.

State officials have had trouble accurately predicting how oil activity will change. In 2013, when the Legislature approved putting Proposition 1 on the ballot, supporters said the first payment from oil production taxes might total $900 million, about half of what officials are now expecting.

Supporters also originally predicted that the Proposition 1 payments would remain high for years, if not decades. Yet a recent drop in crude oil prices has raised concerns that drilling activity could slow down, leading to lower payments to the state highway fund in the future.

“I personally believe the money won’t be as much the next couple of cycles,” Pickett said. “So I would like to see us get some projects across the state of Texas up and running.”