TX: Vehicle Sales Tax To Be Dedicated For Highways?

[Grzrd]

This article on the Alliance for I-69 Texas website reports that Robert Nichols, chairman of the Senate Transportation Committee, plans to submit for approval by Texas voters a constitutional amendment that would allow a gradual shift of all state sales tax revenue from new and used vehicle purchases to a fund dedicated to the construction and maintenance of the state highway system, and to pay off general revenue transportation related debt:

The Nichols plan would not raise current fees.  Over a period of 10 years it would gradually shift all state sales tax revenue from new and used vehicle purchases to a fund dedicated to the construction and maintenance of the state highway system, and to pay off general revenue transportation related debt.  The sales taxes paid by Texans now go into the General Fund.
Chairman Nichols proposes to make the change through adoption of a constitutional amendment by the voters which will prevent future legislatures from diverting these transportation funds to other non-transportation uses.
He has said that Texas needs transportation sources that are predictable, constitutionally dedicated, transportation related, independent of fuel source and continually adjusted for inflation.
The enabling legislation for the proposed Nichols amendment would incrementally dedicate the sales tax by 10% each year starting in 2016.  That very slow process would allow time for the General Fund to adjust to the removal of the vehicle sales tax increments .... By the tenth year the revenue will be near $3 billion with a debt payment of $718, leaving a net of about $2.2 billion for transportation.  For comparison, TxDOT contract lettings have totaled about $4 billion each year over the past decade.

Nichols argues that it makes intuitive sense. Would Texas voters agree?

[Road Hog]

It'll never happen. Every dedicated tax or fee has been co-opted for the general fund. Remember the lottery that was supposed to go toward education? Or the ticket surcharge to benefit trauma centers from 10 years ago?

[Chris]

Many European countries have a vehicle sales tax (usually on top of the regular sales tax). It has the potential to generate billions in revenue, although it's chiefly a general budget cash cow in Europe, and not necessarily dedicated to the highway network.

I think other options like these should be considered as a new source of funding, considering the ever increasing shortfall of regular gas tax funding. It won't be long until the gas tax can only fund maintenance and rural projects.

[Grzrd]

This article reports on recent testimony about a bill that would direct growth in future vehicle sales tax revenues to highway construction projects:

Testimony on CSHB 479 was taken by the Appropriations Subcommittee on Budget Transparency and Reform chaired by Rep. Myra Crownover ....
CSHB 479 would cap the amount of vehicle sales tax flowing to the state General Fund at $2.5 billion per year. Growth in vehicle sales tax revenues above $2.5 billion would flow to the State Highway Fund starting in FY 2016. The amount in the first year is estimated to be approximately $1.2 billion with that amount expected to grow over time. The proposed legislation also prohibits diversions from the Highway Fund starting in FY 2016. This provision would be subject to approval by Texas voters in a constitutional amendment election in November ....
Those speaking in favor included representatives of TAoT, the Greater Houston Partnership, the Alliance for I-69 Texas, the San Antonio Tea Party, the City of Denton, Texas TURF, the Texas Association of Realtors and Texas Future, a new coalition of business associations.

Texas voters will be able to vote on this issue.

[ShawnP]

Biggest problem is the localities that have gotten used to that revenue. In theory the money should go to roads since the vehicles bought would be used on roads but too many others as usual have gotten their hands on money intended for roads and other transportation modes.