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Transportation Funding a Priority

Rick Thompson
Senior Legislative Liaison

Transportation funding and infrastructure development and maintenance have moved back to the top of the list for many state leaders in large part due to the road damage caused by the increase in oil and gas production in Texas. A good example of the level of attention transportation issues have drawn was Governor Perry’s State of the State address, which called for the end of diverting transportation funds for unrelated state expenses and suggested using $1.7 billion of the Rainy Day Fund for transportation. 

Identifying additional funding sources for the maintenance of our state and local roadways is essential. The increase in the state’s population and traffic combined with the increase in heavy vehicles traveling our roadways makes our current funding system insufficient, and our roads are rapidly deteriorating.

While the State of Texas is reaping a multi-billion dollar boom from severance taxes and royalties, the need for good county roads has been mostly ignored by the state and the amount has remained unchanged since 1954.

Since 1991, Texans have paid a 20-cent-per-gallon state tax. Five cents goes to help pay for public education and the remainder, about $2.2 billion annually, helps finance the state's transportation system. The gas tax is bringing in less money for road maintenance and construction because more fuel-efficient cars are on the roadways. The county portion of the 2012 gas tax collections is $7.3 million , which is divided among all 254 counties.

Counties have limited authority to raise funding for road construction and maintenance. Although it seems the county has many options, counties receive only a small portion from limited funding sources, which include vehicle registration fees, overweight vehicle fees, vehicle sales tax, a few optional fees and road and bridge tax.

Over the last couple of years, the Legislature has offered some revenue-generating proposals that include raising the gas tax, making all drivers pay the same fee to register their cars and raising the registration fee. Should any of these revenue-generating proposals pass, increasing funding to counties would be at the Legislature’s discretion.

To date, a number of bills pertaining to transportation issues have been filed. Listed below are a few of the bills counties are watching:

Uses for the state highway fund (Fund 6)

HB 106 by Larson – requiring money in the state highway fund to only be used for improving the state highway system and removing DPS as an allowable expenditure from the state highway fund.

HB 479 by Harper-Brown – requiring the comptroller to deposit a certain amount of the funds generated from the motor vehicle sales tax in the general revenue fund, with the remaining amount credited to the state highway fund.

HB 514 by Harper-Brown – cutting back diversions from the state highway fund by first eliminating in FY 2013 all diversions to the foundation school fund. Also beginning in FY 2013, diversion percentages are decreased from the highway fund to the state general fund beginning at 25 percent and decreasing 5 percent each year until 2018 when 100 percent of funds are dedicated to the state highway fund.

HB 782 by Phillips/HJR 68 by Phillips/SB 287 by Nichols/SJR 20 by Nichols – dedicating the 6.25 percent motor vehicle sales tax revenue to the state highway fund incrementally over the next 10 years. The amount dedicated to the fund would increase by 10 percent each year until 100 percent is dedicated. These funds would be dedicated to pay off bonds and increase the maintenance budget.

HB 1105 by Harper-Brown – dedicating the remaining 75 percent of the unclaimed refunds of taxes paid on motor fuel used in motorboats to the state highway fund.

HJR 22 by Pickett – capping the amount of motor fuel tax and registration fee revenue that can be used for any purpose other than right-of-way, construction and maintenance of roads and eliminating the use of net revenue from these fees and taxes used for the payment of principle and interest on certain county road and district bonds.


Road damage legislation

HB 563 by Guillen/ HJR 63 by Guillen – allowing two or more counties that contain a portion of shale formation to create a shale transportation district to plan, coordinate and provide financial assistance for road projects by issuing bonds from severance taxes. The Texas Department of Transportation will have oversight and final determination over the shale transportation district.

HB 777 by White – allowing timber, wood chips or woody biomass haulers an increase in the maximum allowable gross load carried on any tandem axle of the vehicle to 44,000 pounds.

HB 1336 by Keffer – creating the Transportation Infrastructure Grant Program, which is partly funded by $1.4 billion from the Rainy Day Fund, for transportation infrastructure projects including construction, reconstruction, or maintenance of transportation infrastructure intended to alleviate damage caused by the exploration, development or production of oil and gas. The program will be administered by the Texas Department of Transportation, which will make available grants for state and county roads affected in areas of increased energy production. Consideration will be based on a couple of factors including proportionality to the number of oil and gas well completions performed in that county during the previous two years.

SB 300 by Uresti – establishing the transportation infrastructure grant program in the state general revenue fund to be used only to administer a program to make grants to counties for transportation infrastructure projects and directing the comptroller to transfer a portion of state funds received from oil production taxes to the new transportation infrastructure fund.