Road funding bill moves to Senate floor

Link to article here.

Just do a simple graph that plots the rise in education spending versus road spending and you can’t even begin to make the argument Dick Lavine made during his testimony before the Senate Transportation Committee. Hands down, education and public health eat up over 80% of the budget. Roads ranges between 4%-10%. There is no ‘underinvestment’ in schools.

There’s an overzealous, loud and demanding education bureaucracy that eats up the dollars that should be sent to the classroom. There are 3 staffers for every teacher. But by starving the classroom (the part parents and students see), they can continue to claim that more money is needed for schools. Teachers should demand an end to the bureaucrats stealing their money and refusing to put money into teacher salaries and directly into the classroom (not the buildings) - but sadly, they’d rather use teachers as a political prop as an excuse to keep eating up the budget and starving other core functions of government, like roads.

State senate panel advances road funding plan
By Dug Begley | February 25, 2015
Houston Chronicle

A state senate committee moved forward Wednesday with a plan to use half the revenue from motor vehicle sales taxes for road improvements, but some senators expressed concern about unintended consequences.

The plan, sponsored by Sen. Robert Nichols, R-Jacksonville, and with support from Lt. Gov. Dan Patrick, passed the Senate Transportation Committee 8-1 after two hours of discussion. Sen. Rodney Ellis, D-Houston, cast the lone dissenting vote.

The bill and associated constitutional amendment resolution now go to the Senate floor, then possibly the House, where their prospects are unclear.

The proposal would direct the first $2.5 billion of sales taxes on cars, trucks and other vehicles to the general fund. The next $2.5 billion would go directly to road spending. Any revenue above $5 billion would be evenly split.

In the last fiscal year, motor vehicle sales tax collections totaled $4.1 billion, according to the comptroller's office. This amount is expected to increase as vehicle values rise and more people buy cars in Texas.

Nichols' bill would make the change for the current biennium. The Legislature would then call for a November 2016 vote on a constitutional amendment that would make the revenue split permanent.

After years of inadequate investment in state roads as the population grew rapidly, it is imperative lawmakers give the Texas Department of Transportation predictable and adequate funding, Nichols said.

"It is a core function that has been short a long time," Nichols said.

Nichols said the proposal clearly states the money cannot be used for tolls, reflecting growing concern about the state's reliance in the past decade on tolling to avoid tax increases.

Ellis and Sen. Troy Fraser worried the proposal would guarantee money for roads at the expense of other priorities. Fraser voted to support Nichols' bill, but said he would explore alternatives to avoid dedicating the money.

Education advocates voiced similar concerns, while agreeing roads are underfunded.

"The problem is there has also been consistent and persistent underinvestment in higher ed and public ed," said Dick Lavine, senior fiscal analyst for the Center for Public Policy Priorities, a left-leaning think tank based in Austin.

Nichols and others argued the poor condition of Texas roads is hurting business and the state's quality of life. Improve highways without tolls, many said, and all sales tax revenues increase due to a booming economy.

"There isn't a greater issue than the traffic issues we are seeing," said Sen. Lois Kolkhorst, R-Brenham, who represents portions of northwestern Harris County. She said the Harris County Toll Road Authority "does a great job, but there is a real value and need in Houston getting this money for free roads."

If less money is in the general fund, Ellis said, lawmakers have less ability to shift priorities when needed. That flexibility, he said, is better than carving out permanent, dedicated money for each priority.

"As important as transportation is .. if we don't invest in education you will have people getting on the freeways and not know which way to go," Ellis said.
Link to article here.

Nichols' Car Sales Tax Plan Moves to Senate Floor
By Aman Batheja
Texas Tribune
February 25, 2015

A state Senate committee on Wednesday voted in favor of a proposal to dedicate some of Texas' vehicle sales tax to improving roads, but not before lawmakers expressed reservations that will likely re-emerge when the measure reaches the floor next week.

The Senate Transportation Committee voted 8-1 in favor of both Senate Bill 5 and Senate Joint Resolution 5, which together would boost transportation funding by billions of dollars.

Texans pay a 6.25 percent state sales tax on automobiles. Currently, all of the vehicle sales tax collected — about $4 billion annually — goes into the state's all-purpose general revenue fund.

Before the vote, Senate Transportation Chairman Robert Nichols, R-Jacksonville, laid out a revised version of the bill that would allocate the first $2.5 billion in annual car sales tax revenue to the state’s general fund, with the next $2.5 billion collected going to the state highway fund. Any revenue collected beyond $5 billion a year would be split evenly between the general fund and the highway fund. All of this would be spelled out in a constitutional amendment that voters would be asked to approve in 2016.

Nichols' original proposal would have dedicated any vehicle sales tax revenue beyond $2.5 billion annually to the state's highway fund.

Nichols stressed the importance of his measure in providing a reliable revenue stream to the Texas Department of Transportation (TxDOT) that will grow over the long term. TxDOT has said it needs about $5 billion more in funding annually to keep traffic from getting worse as the state’s population grows.

“We’ve all been looking for something to dedicate to transportation, whether it be a new revenue or an existing revenue,” Nichols said.

At a press conference Tuesday, Lt. Gov. Dan Patrick said he expected to bring Nichols' measures to the Senate floor next week.

State Sen. Rodney Ellis, D-Houston, voted against the measure, expressing concerns that the measure would allocate so much taxpayer revenue toward transportation while other concerns remain underfunded, particularly education. He noted that lawmakers won’t have much money left to work with for other issues if they pass both Nichols’ transportation plan as well as tax cuts Patrick championed on Tuesday.

“I’m just not sure we’re looking at the whole picture,” Ellis said. He added later, “I’m going to vote ‘no’ today because I hope it does encourage dialogue.”

Ellis found an unlikely ally in state Sen. Troy Fraser, R-Horseshoe Bay, who voted for Nichols' bill but said he was worried about tying the hands of future legislatures.

“I have a huge reservation about the dedication of funds and the lack of the Legislature’s discretionary ability,” Fraser said.

But state Sen. Don Huffines, R-Dallas, said lawmakers have had decades to appropriate enough funds to road funding and have never done it. He said funding other areas, including education, is irrelevant if the state's transportation system is unusable.

“There’s no reason to worry about the schools if you can’t get there,” said Huffines, who voted for the bill.

Fraser warned Huffines that he should listen more carefully to those with more experience than he has.
“You’ve only been here about a month,” Fraser told Huffines. "There's a learning curve here, and institutional knowledge."

State Sen. Bob Hall, R-Edgewood, also voted for the bill but said he didn’t think it went far enough. He expressed interest in seeing more of the sales tax collected on vehicle sales be dedicated to roads — rather than the general fund. 

“This split we’re talking about here won’t even keep up with inflation in road construction the way the work is currently being done,” Hall said. “That’s my concern.”

Link to article here.

Governor Greg Abbott is right. This is about truth in taxation. money collected on road users, those who own vehicles and the tax they pay to the state on the sale of vehicles, is ROAD money, not to be squandered on other government services. When road funding has been in crisis for nearly two decades, it’s not only common sense to dedicate the vehicle sales tax to roads, it will restore the public’s trust in road funding after years of road tax diversions to other purposes. 

Texas has spent years looking for money to bolster roads
Associated Press
February 21, 2015 
AUSTIN, Texas — Texas lawmakers have been trying for years to find ways to fill the gap between what the state spends to build and repair roads and what it really needs to do the job right.

When lawmakers slashed $15 billion from the state budget in 2011, they still pumped extra money into roads. Two years later, they approved diverting piles of cash from the state's Rainy Day Fund to transportation.

Despite the extra funding, though, transportation officials have said they won't have enough to build new roads and bridges and fix old ones that are struggling to cope with Texas' population growth and the heavyweight truck traffic from the recent oil boom.

From new Gov. Greg Abbott on down, the state's new conservative leadership has pledged to pump billions more into transportation — without raising taxes or adding toll roads — to help Texas avoid a major congestion problem.
In his first state-of-the state address on Tuesday, Abbott declared transportation funding an "emergency item" for the legislative session, allowing lawmakers to accelerate efforts.

"Tax dollars raised for roads should be spent on building more roads," Abbott said.

Like most other states, Texas has been forced to find ways to build new roads or fix old ones while federal money for such projects either stagnates or declines.

Figures compiled by The Associated Press show the amount of money available to Texas from the Federal Highway Trust Fund has leveled off during the five-year period ending in 2013, the latest year for which numbers were available.

When factored against Texas' growing population, which stands at more than 26.5 million people, that created a nearly 9 percent drop in per capita federal highway money for Texas.

Texas lawmakers in 2013 drafted the plan to annually put a portion of money from the Rainy Day Fund, the state's savings account which is filled with oil and gas tax revenue, toward roads. It was later approved by voters statewide and the first gusher of money was about $1.7 billion.

But transportation officials had already warned that wouldn't fill even half of their need for $5 billion more every year.

And the Rainy Day Fund threatens to be fluid. The end of the oil boom is likely to shrink collections at least temporarily, leaving road planners uncertain of how much money they will get in the future.

That has Abbott and state lawmakers looking elsewhere. One target: taxes collected on vehicle sales.

Those taxes now go to general revenue where they can be split and picked apart by state lawmakers needing money for other things. Abbott wants more than $2 billion of those sales taxes re-routed to the state highway fund every year.

A similar plan by Senate Transportation Committee Chairman Robert Nichols, R-Jacksonville, would spend that money on roads starting in fiscal year 2018.

Under Nichols' plan, the first $2.5 billion collected by the motor vehicle sales tax would still go to general revenue, with an estimated $2 billion or more annually sent to roads. The amount would likely increase as the Texas population grows and likely sees more car sales.

Nichols' plan would require voter approval he wants to prohibit the money from going to toll roads or bridges. Former Gov. Rick Perry once proposed the Trans-Texas Corridor, a massive tangle of privately built and managed toll roads and shipping lanes across the state.

The move sparked an early wave of public-private partnerships for about 500 miles of toll lanes, but the Trans-Texas Corridor was officially scrapped after a fierce public backlash.

Consistent budgets will help plan future road projects, Nichols said.

"(Texas) needs to know six years out, eight years out so we can do the long-term projects that are needed in this state," he said.
Link to article here.

Great history and review of the road funding shortfalls on both the federal and state level.

As federal road money ebbed, Texas filled gap with borrowing
By Ben Wear & Jim Vertuno
Austin American Statesman & Associated Press
Sunday, Feb. 22, 2015

Texas transportation insiders saw this coming a mile away.

Or, more to the point, more than a decade away.

As an Associated Press review of federal transportation dollars shows, a federal gas tax that’s been stagnant for 22 years and the increasing congressional gridlock in the past few years have stanched the flow of Uncle Sam’s highway money to states around the country. In response, legislatures in many states are scrambling to increase gas taxes, or turning to other tax or fee increases to keep their highways and bridges in shape.

Over the past decade Texas borrowed money for aggressive highway projects across the state, including an expansion along about 90 miles of Interstate 35 between Salado and Hillsboro.

But in Texas — which has seen the same diminution of federal highway money — spending on state roads over the past decade has been the very definition of robust. Adjusting for inflation, total Texas spending per capita on highways has gone up almost 50 percent since 2003, from $388 per Texan in 2003 to $567 in 2013. And all of this, many Texas politicians like to brag, without raising the state gas tax.

But the picture is more complicated than that, and is changing.

“It’s credit card,” said state Rep. Joe Pickett, D-El Paso, chairman of the House Transportation Committee and one of the authors of Proposition 1, the state constitutional amendment overwhelmingly approved by voters in November that promptly gave the Texas Department of Transportation a $1.7 billion infusion.

“Over 10 percent of TxDOT’s proposed budget (for the next two fiscal years) is paying back what we borrowed,” Pickett said of the $2.4 billion in debt payments TxDOT anticipates in fiscal 2016 and 2017. “I think there’s a general consensus that we’ve been there, done that. We’re not going to borrow anymore.”

Early last decade, Texas transportation officials, led by then-Gov. Rick Perry and his close friend, Texas Transportation Commission Chairman Ric Williamson, steered Texas highway finance abruptly from the pay-as-you-go approach that had been the tack for about 85 years. TxDOT, along with the existing and newly created local toll authorities around the state, plunged neck deep into building tollways, which typically are financed by borrowing most of the construction cost and paying it back with tolls.

Beyond that, the Legislature, at the urging of Perry and Williamson (who died in 2007), pushed through three constitutional amendments that collectively allowed TxDOT to borrow about $18 billion for roads in less than a decade. That money funded aggressive highway expansions in urban areas all over the state, often tollways with generous portions of the construction paid by TxDOT funds, and an expansion of about 90 miles of Interstate 35 between Salado and Hillsboro.

Taking into account what the local authorities and even cities and counties threw into the state highway system, Texas spent almost $114 billion on major roads between 2004 and 2013. But with the state growing about 20 percent over that same time frame, with much of that growth in a half-dozen or so major metropolitan areas, even that bonanza hasn’t been enough, transportation officials say.

And if the rush of borrowing is in the rear-view mirror, and with both federal and state gas tax revenue losing ground to inflation, the Legislature this session is giving serious consideration to several measures that would direct several more billion dollars a year into TxDOT.

In that at least, Texas officials are in concert with their counterparts around the country.

State officials nationwide are accelerating their drive for new taxes, tolls and fees to repair an aging road system whose historical reliance on fuel taxes no longer is providing enough money to cover its costs.

Figures compiled by the Associated Press show the total amount of money available to states from the Federal Highway Trust Fund has declined 3.5 percent during the five-year period ending in 2013, the latest year for which numbers were available. During that span, the amount of inflation-adjusted federal highway money dropped in all but two states, New York and Alaska.

The shortfall has led to rougher roads requiring more frequent, short-term repairs, suspect bridges and jammed commuter routes that simply have more vehicles than the roads were designed to carry.

Transportation funding increases could be on the agenda in as many as one-third of the state legislatures this year. That comes after roughly one-fourth of the states increased transportation taxes or fees during the past two years.

The state proposals stand in stark contrast to the inaction in Congress, where a temporary funding patch is scheduled to expire in May and lawmakers have been at odds over a long-term highway plan.

“You’re seeing states all across the country that are looking to do something, because they realize you can’t count on the federal government,” said Missouri state Rep. Dave Hinson, a Republican who supports the idea of raising the state sales tax for road improvements.

The annual amount available to states from the Federal Highway Trust Fund has hovered just above $40 billion between 2007 and 2012, before slipping below that threshold in 2013. Even though total state and federal road funding exceeded the general rate of inflation over the past decade, the pace has tapered off in recent years as the amount coming from the federal government declined.

“A lot of those facilities are in need of really massive rehab, almost reconstruction from the ground up,” said Jim Tyman, director of policy of at the American Association of State Highway and Transportation Officials.
The association estimates that annual road and bridge spending by all levels of government is falling $32 billion short of what is needed.

TxDOT officials in 2013 said they needed an additional $5 billion a year to properly maintain the state’s 80,000-mile highway system and fight traffic congestion to a draw. The proceeds from the Proposition 1 constitutional amendment that voters approved in November will provide a significant if wildly fluctuating portion of that — the money comes from oil and gas severance taxes and thus is sharply affected by energy price swings.

About 20 percent of the nation’s 900,000 miles of interstates and major roads are in need of resurfacing or reconstruction, and a quarter of its 600,000 bridges are rated as structurally deficient or functionally obsolete, according to federal data analyzed by the American Road & Transportation Builders Association.

The flat federal funding is having an impact because states rely on federal dollars for an average of about half their capital expenses for roads and bridges, according to the association. The rest is covered with state money, which typically comes predominantly from fuel taxes — the recent Texas borrowing binge notwithstanding.

Gasoline tax revenue has grown little since 2007, as vehicles have become more fuel-efficient and people cut back on driving.

To compensate, lawmakers in Maryland, Massachusetts, New Hampshire, Pennsylvania and Wyoming passed gasoline tax increases during the past two years.

But about half the states haven’t raised their gasoline taxes in at least a decade, and the federal gas tax has remained at 18.4 cents a gallon since 1993. In Congress, Republican leaders have said there aren’t enough votes to pass a gas tax increase.

Many states are now considering alternatives. Virginia recently scrapped its per-gallon gasoline tax in favor of a new tax on the wholesale price of gas and a higher tax on other retail sales.

Lawmakers in Minnesota, Utah and Missouri also are expected to consider proposals this year that could levy a sales tax on fuel, allowing the states to reap more money when the price of gasoline rises.

Texas voters did their bit in November with the approval of Prop 1. But some of what legislators have in mind this time — ending the use of gas tax dollars for state agencies other than TxDOT and diverting vehicle sales taxes from general government spending to TxDOT — likewise would require constitutional amendments.

Texas highway finance has bucked the recent national trend. The state’s voters, it appears, might be asked again this fall to keep Texas roads headed that direction.

What Texas has done
    •    Borrowed $18 billion over the past decade to build and maintain roads.
    •    Established regional authorities to build and operate tollways.
    •    Granted long-term leases to private companies to build and operate toll roads.
    •    Diverted to TxDOT, with voter approval in November, half of the gas and oil severance revenue that otherwise would have gone to the state rainy day fund, about $1.74 billion in the first year.

What proposals are on the table
    •    Diverting some of the sales tax revenue on vehicle sales to TxDOT, likely $2 billion a year and rising under proposed legislation.
    •    Ending the diversion of about $650 million a year of gas tax dollars to agencies other than TxDOT.
    •    Allowing Travis County commissioners to raise local car registration fees to pay for highway projects, likely $11 million to $22 million a year.

About this story
The Associated Press compiled figures showing the total amount of money available to states from the Federal Highway Trust Fund has declined 3.5 percent during the five-year period ending in 2013, the latest year for which numbers were available. American-Statesman reporter Ben Wear, who has covered transportation for the past decade, showed how Texas is using other funding sources to push road construction projects forward. Associated Press reporters David A. Lieb and Jim Vertuno also contributed to this report.