TxDOT: Promising proposal for additional funding

[MaxConcrete]

http://www.bizjournals.com/houston/morning_call/2015/02/billions-more-for-texas-roads-maybe-vehicle-tax.html

This idea has been talked about for many years, but this proposal is very significant because it has the support of Lt. Governor Dan Patrick, who is the leader of the Senate. Patrick, new to this position after last November's elections, is a strong tea party type and his support is crucial. In short, it permanently dedicates $1 billion per year ($2 billion over the biennium) from the vehicle sales tax to highways.

The article also discusses a separate $5 billion for the next biennium, with $2.6 billion already allocated from proposition 1, $1.2 billion from stopping diversions, and an addition $1.2 billion one-time transfer from the motor vehicle sales tax.

Of course, it is very difficult to get bills through the Texas legislature, so we'll see what happens. But a best-case scenario is for the Texas legislature to deliver and a new big funding boost at the federal level, which appears to be gaining favor but of course will also be difficult to achieve.

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Billions more for Texas roads (maybe): Vehicle tax proposal boosts transportation funding sources

The final piece of the Senate's transportation solution fell into place Feb. 4 as Lt. Gov. Dan Patrick and his Transportation Committee Chair, Sen. Robert Nichols, unveiled bills to divert vehicle sales tax revenue to a permanent funding stream for transportation.

The Senate's proposed components to fund transportation this biennium include what is now $2.6 billion out of the state's Rainy Day Fund; the end of $1.2 billion in diversions out of state's motor vehicle fuel taxes; and $1.2 billion out of vehicle sales tax. That puts new transportation funding this session at roughly $5 billion.

Nichols, R-Jacksonville, is a one-time Texas Transportation Commissioner. As he promised at last month's Texas Transportation Forum, Nichols delivered on his promise to create a permanent, predictable, stable, long-term funding stream. His bills, upon voter approval, would carve $2 billion in revenue each biennium out of vehicle sales taxes, which typically tops $4 billion per year.

The key word in Nichols' proposal, which is filed as Senate Bill 5 and Senate Joint Resolution 5, is "dedicated." That means the $2 billion set aside for transportation, once the vehicle sales tax revenues reach $2.5 billion, cannot be co-opted for other purposes, which is often the case with general revenue.

.....

[MaxConcrete]

This proposal appears to be gaining momentum

http://trailblazersblog.dallasnews.com/2015/02/support-builds-for-plan-to-boost-txdot-funding-with-vehicle-sales-tax-revenue.html/

Support builds for plan to boost TxDOT funding with vehicle sales tax revenue
Tom Benning Email tbenning@dallasnews.com
Published: February 24, 2015 1:06 pm

Updated at 2:33 p.m.: The full-court press continued Tuesday afternoon on an effort to round up support for a proposal to boost TxDOT's funding with vehicle sales tax revenue.

A bevy of key business groups gathered at the Capitol to declare their support for the idea. Among them were the Texas Association of Business, the Texas Association of Realtors, the Texas Trucking Association and the San Antonio Chamber of Commerce.

And Lt. Gov. Dan Patrick, who had previously touted the idea, underscored his backing of the plan.

"If we are going to continue to create jobs, then we need to address the transportation issues that are before us today,"  he said. "You have my 100 percent passionate, full commitment to move this forward."

Original post: AUSTIN — Top state leaders and key business groups on Tuesday rallied behind a plan — an old idea with a new twist — to boost the cash-strapped Texas Department of Transportation's annual budget by $2 billion or more.

The unified support for a proposal to constitutionally dedicate a portion of the sales tax revenue from vehicle purchases to the state highway fund came a day before the Senate Transportation Committee will consider two measures to achieve that goal.

And that broad backing could prove critical.

Prior attempts to pursue the funding strategy were quashed by budget writers concerned about creating a devastating hole in the state's general fund. But Senate Transportation chairman Robert Nichols tweaked his approach this time to allay some of those worries.

And Gov. Greg Abbott, signaling his support for such a proposal, emphasized on Tuesday his "historic and unwavering commitment to building more roads in the state of Texas."

....
 

[MaxConcrete]

The bill has been approved by the Senate. This was a very fast approval by the standards of the Texas House or Senate, since bills usually don't make progress until May. The House still needs to take action on the funding subject.

http://www.dallasnews.com/news/politics/state-politics/20150304-senate-oks-2.5-billion-boost-to-txdots-annual-funding.ece

Senate OKs $2.5 billion boost to TxDOT's annual funding

By TOM BENNING tbenning@dallasnews.com

Austin Bureau
Published: 04 March 2015 10:54 PM
Updated: 04 March 2015 10:54 PM

AUSTIN – The Senate put transportation funding squarely in the fast lane Wednesday, approving as its first legislation of the year two measures that could generate an additional $2.5 billion annually for Texas roads.

The proposals – each passed on a 28-2 vote – would tie part of the taxes collected on vehicle sales to the Texas Department of Transportation. The idea could help unclog the state's congested roadways and discourage the proliferation of tolled roads.

The proposal, like most other efforts to boost funding for the highway department, had failed to gain traction in earlier years. This time, it passed despite concerns that it would hamstring future lawmakers. And to allay other worries, senators amended the bill Wednesday to ensure it protects some future funding for education.

The measure still needs to pass the House, where leaders haven't yet outlined their preferred approach to enhancing transportation funding. Since it would alter the state Constitution to dedicate money to roads, it would ultimately need approval from voters as well.

But with new taxes and fees already deemed political nonstarters, the proposals might offer the most realistic option to tackle Texas' traffic congestion.

"We are one step closer to providing relief to our ailing transportation infrastructure,"  said Lt. Gov. Dan Patrick, who presides over the Senate.

The Transportation Department has highlighted an additional $5 billion it needs each year to keep congestion from getting worse and to maintain the current physical condition of the state's roadways.

That gap has developed in part because the state gas tax – paid at the pump – has remained at a flat 20 cents per gallon since 1991. Inflation, rising road construction costs and vehicles' increasing fuel efficiency have reduced the spending power of that revenue.

...

WHAT'S NEXT

The legislation heads to the House. Prospects there are unclear, as leaders haven't yet outlined a preferred strategy for boosting roads funding. The constitutional amendment would require approval of two-thirds of House members.

Gov. Greg Abbott would have to sign the enacting measure into law. The idea closely matches his plan to enhance transportation funding.

Voters would ultimately decide on the matter in a statewide election to be held next year.

[nolia_boi504]

Is there a list (or better a map) of projects currently approved for Prop 1 funding? I've seen one for Fort Bend County on Community Impact which shows 3 approved projects, but I can't find anything for the rest of the Houston area.

[Grzrd]

Is there a list (or better a map) of projects currently approved for Prop 1 funding?

This page may provide you with what you need:

http://www.txdot.gov/apps-cq/prop1/project_info.htm

[MaxConcrete]

The situation is looking very good for increased funding. The House has approved a bill which dedicates $3 billion annually in sales tax revenue for highways. The already-approved Senate bill sets aside $2.5 billion from vehicle sales taxes.

So I'm thinking the final bill out of conference will be in the $2.5-3 billion range. Combine those funds with proposition 1, and the $5 billion annual funding gap is around 75% fixed. (Prop 1 funds are variable and will drop due to low oil prices.)

******
http://trailblazersblog.dallasnews.com/2015/04/house-gives-tentative-ok-to-boosting-txdot-budget-by-3b-annually.html/

AUSTIN — The Legislature is poised to give a multi-billion-dollar boost to the cash-strapped Texas Department of Transportation, potentially allowing the state to at least draw even in the uphill battle to maintain its expansive roads network.

The House on Thursday voted 138-3 in favor of shifting more than $3 billion in existing revenue to non-tolled roads. The action came after the Senate in March approved a similar transportation enhancement of $2.5 billion or more each year.

That overwhelming, two-pillared support marks a major milestone for transportation-minded lawmakers, who struggled in years past to rally enough enthusiasm in either chamber to provide that kind of infusion to the state's aging highway infrastructure.

...

Pending the House's final approval, expected as early as Friday, the House and Senate would still need to reconcile their approaches.

But the two proposals, which both focus on sales tax revenue and would both require voter approval, are not too far off from each other. And unlike in the past, the efforts to move more money to roads have the key backing of both chambers' top budget-writers.

...

Texas' underfunded roads have come into focus in recent years, after TxDOT said it needed an additional $5 billion each year to keep congestion from getting worse and to maintain the current condition of the state's roads.

Such a shortfall was a long time coming. The state gas tax — paid at the pump — has stayed flat at 20 cents per gallon since 1991. And with inflation, vehicles' increasing fuel efficiency and other factors, the gas tax money doesn't go as far as it once did.

Texans helped fill that gap last year by approving a ballot measure that shifts some taxes on oil and gas production — $1.7 billion this year — to transportation. And lawmakers have sought to aid TxDOT's highway fund by eliminating diversions to other agencies.

...
 
 
 

[MaxConcrete]

The House and Senate bills have been reconciled and the plan for additional funding is defined. It requires voter approval in 2016, and the funds would not start flowing until 2018. And the money does not start flowing until certain thresholds are met. In the long run these thresholds should easily be met due to population growth and inflation, but in the early years it is not necessarily a sure thing. Voter approval is almost certain since there is no tax increase.

Additional funding is $2.5 billion per year from the general fund (after the $28 billion sales tax revenue threshold has been reached) and, starting in 2020, 35% of the motor vehicle sales tax after a $5 billion threshold has been reached. So in the best case scenario this will generate $2.5 billion in FY 2018.

Until 2018, the legislature appropriated only an extra $600 million per year (not mentioned in this news report). So funding will remain lean until 2018.

http://www.dallasnews.com/news/politics/headlines/20150526-house-senate-deal-would-boost-texas-road-fund-by-billions.ece


House, Senate deal would boost Texas road fund by billions

Published: 26 May 2015 11:15 PM
Updated: 27 May 2015 12:05 AM

AUSTIN – The Legislature's two most influential transportation lawmakers have struck a deal to boost the annual road budget by a projected $3 billion or more, possibly putting Texas in a position to keep congestion from getting worse.

House Transportation Chairman Joe Pickett and Senate Transportation Chairman Robert Nichols said Tuesday the strategy would shift more money toward the construction and maintenance of toll-free roads.

The model, which would require the approval of voters in November 2016, relies on general sales tax and the motor vehicle sales tax. There would also be ways to limit the extra money to the Texas Department of Transportation, if the economy falters.

It is unclear how much money from such an approach will make its way to North Texas. But one guide might be the recent voter-approved $1.7 billion infusion from a shift of oil and gas production tax revenue, of which $367 million went to the greater Dallas area.

After pushing for years to get more money for roads – only to be blocked – both lawmakers cast the deal as significant.

"Getting something that was a "˜Hell, no' two years ago ... shows we've come a long way,"  said Pickett, D-El Paso.

Texas' road problems have come front-and-center across the state. TxDOT said two years ago it needed $5 billion more each year to keep congestion from getting worse and to maintain the state's roads.

And those funding woes have not been a surprise, since the state gasoline tax has stayed at 20 cents a gallon since 1991. The gas tax money doesn't go as far these days, because of inflation, vehicles' increased fuel efficiency and other factors.

Past efforts to boost roads faltered under concerns about blowing a hole in the state's general revenue budget. Although some of those worries remain, both the House and Senate voted overwhelmingly this year for earlier versions of the transportation agreement.

Under the deal, starting in 2018, TxDOT would get up to an additional $2.5 billion a year in general sales tax revenue once that pot reached $28 billion a year. The state collected a little over $27 billion in sales tax revenue last year, officials said.

That provision would last for 15 years, though lawmakers could vote every decade to extend the setup.

Starting in 2020, the highway fund would also get 35 percent of motor vehicle sales tax revenue over $5 billion a year. Pickett estimated that cut would produce more than $250 million a year at first and then be in a position to grow.

That element would expire after 10 years, though lawmakers could also vote to extend in decade increments.

To allay budget writers' concerns that the state's general revenue budget could suffer in tough economic times, Pickett and Nichols created a fail-safe option. Any Legislature, by a two-thirds vote, could reduce either funding method by 50 percent.

"We needed to have a way during crisis periods to be able to pull some of those dollars back,"  said Nichols, R-Jacksonville.

The proposal's conference committee must wrap up some paperwork before the House and Senate can vote on the deal. The Senate must also pass the proposal's enabling House legislation, which would also provide more transparency and oversight to TxDOT.

[wxfree]

The text of the bill is finally available.  It's only in PDF at the moment.

The general sales tax portion is a fixed amount and does not correct for inflation.  Just like the fuel tax, this is setting up future shortfalls when the dollar amount loses value.  The vehicle sales tax portion is a percentage of the revenue and will correct for inflation, but this is a relatively minor portion of the revenue transfer.

I like the ability to reduce the transfer up to 50% with a supermajority vote, but I don't care for the expiration.  The automatic devaluation through inflation and ability to reduce the amount should be enough of a safety valve to maintain budget flexibility.

The fiscal note is not yet available for this version, but it'll be informative.  Does anyone know where the enabling legislation is?  SB 5 hasn't made any progress in the house.

http://www.legis.state.tx.us/BillLookup/Text.aspx?LegSess=84R&Bill=SJR5

[MaxConcrete]

The Senate has approved SJR 5, and now House approval is needed. Since the session ends Sunday, time is short, and there is always the risk of some kind of procedural maneuver which blocks voting on all remaining business.

In terms of the budget, the Dallas Morning News is reporting that regular funding for TxDOT is increased by $1.3 billion over the two-year budget cycle,

So increased TxDOT funding is
1. $650 million per year from the budget increase
2. Proposition 1 money, which was $1.7 billion last year, which is expected to be much lower due to low oil prices, probably more like $1 billion this year.
3. SJR 5, which would start with up to $2.5 billion in FY 2018 if passed by the House, signed by the governor and  approved by voters.

The $3.8 billion tax relief bill was the largest recipient of available funds.

http://www.dallasnews.com/news/state/headlines/20150529-best-texas-budget-ever-dan-patrick-says-but-others-disagree.ece
At a glance: Texas' new budget

Increases by category:

PUBLIC SCHOOLS: $1.5 billion, over and above extra money to cover 80,000 new students annually

HIGHER EDUCATION: $1.5 billion

BORDER SECURITY: $332 million, for a total of $800 million

TRANSPORTATION: $1.3 billion, by no longer using gas taxes and vehicle registration fees to pay for state troopers

WHAT'S NEXT: It goes to Gov. Greg Abbott. He has the power to erase individual spending items, through a line-item veto, but he is expected to approve the overall plan.

SOURCES: Legislative Budget Board; Dallas Morning News research

[MaxConcrete]

The House has approved SJR 5.

http://www.capitol.state.tx.us/BillLookup/History.aspx?LegSess=84R&Bill=SJR5

With the expected approval from Governor Abbott, it will be up to the voters in November.

[wxfree]

Constitutional amendments don't go to the governor.  Passage of the resolution requires a two-thirds affirmative vote of the membership of each house, after which the proposed amendment is filed with the secretary of state, who sends a copy to each county clerk.  The proposal goes to an election on the date specified by the legislature, generally in the resolution.

[MaxConcrete]

The Dallas Morning News reported on the passage of the bill. Senator Huffines is quoted at the end of the article that the funding is still not enough and more is needed, but I think it will be difficult to get additional state-level funding approved.

http://www.dallasnews.com/news/politics/headlines/20150530-formula-to-boost-highway-funding-headed-to-abbott.ece

Formula to boost highway funding headed to Abbott

Austin Bureau
Published: 30 May 2015 10:30 PM
Updated: 31 May 2015 03:20 AM

AUSTIN – The Legislature has approved a multibillion-dollar annual boost to the state's long-insufficient budget for roads, checking off an item deemed a top priority by Gov. Greg Abbott.

The House voted, 142-1, on Saturday for a two-pronged effort to provide the Texas Department of Transportation the means to at least keep congestion from getting worse. The Senate approved the measure Friday, 31-0.

Voters would still need to approve a constitutional amendment in a statewide election in November.

"Not everybody gets everything that they wanted,"  said House Transportation Chairman Joe Pickett, D-El Paso. "But we have a really good mixture of what we can proudly vote for and ask the public [for] their support."

The proposal is projected to provide, by 2020, an additional $3 billion annually for the construction and maintenance of nontolled roads.

The boost – combined with another transportation funding stream approved by voters last year – gets TxDOT close to the $5 billion more annually that it has said it needs to keep congestion from getting worse and to maintain the state's roads.

"If passed by the voters, this legislation will be the largest single increase in transportation funding in Texas history,"  Senate Transportation Chairman Robert Nichols, R-Jacksonville, said in a written statement.

Lawmakers found it difficult in years past to get traction for such a substantial increase. And though some remain worried about taking off the table funds that could be used for education and other needs, lawmakers took steps to allay those concerns.

Under the deal, starting in 2018, TxDOT would get up to an additional $2.5 billion a year in general sales tax revenue once that pot reached $28 billion a year. The state collected a little over $27 billion in sales tax revenue last year, officials said.

Then, starting in 2020, the highway fund would also get 35 percent of motor vehicle sales tax revenue that exceeds $5 billion a year. Officials estimated that cut would produce more than $250 million a year at first and grow from there.

Both components would expire after several years, though lawmakers could then vote to extend them. And in tough economic times, any Legislature, by a two-thirds vote, could reduce either funding method by 50 percent.

Even with the big funding boost, some lawmakers cautioned that there's still work to be done.

Pickett lamented that he felt forced to kill a transportation oversight bill, after the Senate added to it at the last minute a statewide ban on red-light cameras. And others pointed out that the additional highway funds still aren't enough to wean the state off tolled roads.

"It's not enough money,"  said Sen. Don Huffines, R-Dallas. "And we're going to have to come back and deal with this issue in the future."
 

[wxfree]

The fiscal note is available.  It predicts the full 2.5 billion starting in 2018 and an increase to near 3 when the motor vehicle tax portion becomes active in 2020.  The additional funding before 2018 is statutory and not part of the resolution, so it isn't included.

http://www.capitol.state.tx.us/tlodocs/84R/fiscalnotes/html/SJ00005F.htm