State Wants Half of Oil & Gas Taxes to Build and Maintain Texas Roads

by DAVID A. DÍAZ
[email protected]

South Texans are being encouraged to vote for a statewide constitutional amendment in November 2014 that would allow half of the state’s oil and gas taxes to be used to build and maintain vital highway projects in Texas, including ongoing improvements to Interstate Highway 69 in the Valley, while still protecting the Rainy Day Fund for emergencies, says Rep. Terry Canales, D-Edinburg.

“As a result of significant new revenue coming from oil and gas taxes, Texas voters have the opportunity to invest in our state’s highways, which are the arteries of our economy,” said Canales. “In particular, money would continue to be available for expanding U.S. Expressway 281 and U.S. Expressway 83 now that they are officially part of the new Interstate Highway 69.”

I-69 is a 1,600-mile-long highway stretching from the Valley to Michigan. I-69 provides a non-stop, first-class route designed to seamlessly and more safely move passenger and commercial vehicles from the Valley to Michigan.

Canales said the Legislature’s approval on Monday, August 5, of the two meaures – Senate Joint Resolution 1 and House Bill 1 – is part of a statewide strategy to continue improving the economy of the Valley.

The House District 40 lawmaker said he would work with leaders in his legislative district to convey the importance of the highway funding constitutional amendment.

“Once Texas voters approve the new funding system for our highways, I will continue to work closely with state legislative leaders, including the Texas Transportation Commission and the Texas Department of Transportation, to make sure we continue to receive our fair share of this new revenue,” Canales promised.

The South Texas legislator said continuing to build and maintain the state highway system in the Valley will have as much of a positive economic impact on the region as the new state law that will merge the University of Texas-Pan American and UT-Brownsville, which will include the creation of a full-fledged UT medical school.

“I was a sponsor of the legislation that will unite UT-Pan American and UT-Brownsville into a new ‘Super University’, which also includes a UT medical school,” Canales said. “Just as that legislative measure is going to transform our region into a major economic and educational leader in Texas, the new funding for roadways in the Valley will be just as important.”

TEXAS PORTS ALSO TO BENEFIT

Sen. Juan “Chuy” Hinojosa, D-McAllen, also supported the two measures, which he said would fund transportation by $1.2 billion by 2018. HB 1 also includes a provision that allows funds from the Texas Mobility Fund to provide funding for projects at ports across Texas.

“Our Texas ports have created 1.4 million jobs, move 564 million tons of cargo a year, and represent 25% of the Texas economy. The ports provision in HB 1 is great for the Texas economy and our state transportation network,” Hinojosa said. “The ports amendment will allow ports across Texas, such as the Port of Corpus Christi, to apply for Texas Mobility Funds to address their needs.”
As a member of the committee in charge of negotiating a transportation agreement, Hinojosa’s input helped craft the final version of the bills passed by the Legislature.

The Legislature continues to make progress on our transportation funding needs.  Considering that TxDOT needs an additional $5 billion in order to maintain the current network, the passage of these bills will move Texas in a positive direction,” Hinojosa concluded.

The passage of SJR 1 and HB 1 represents the fourth try this year by the Legislature to find extra funding for the Texas Department of Transportation.

In the first special session, the plan passed the House and appeared to have the votes to pass the Senate. On the final day of the special session, the bill never came up for a vote. Over the objections of some senators, Lt. Gov. David Dewhurst chose to first bring up a controversial abortion bill, which was filibustered for 11 hours by state Sen. Wendy Davis, D-Fort Worth.

In the second special session, criticism arose in the House as members grew critical of language in the plan to block the diversion of revenue from the Rainy Day Fund if that fund’s balance fell below a certain level.

A compromise solution reached by negotiators from both chambers would have required the Republican-dominated Legislative Budget Board to periodically set a so-called floor for the fund, after which the diversions would be blocked. This compromise solution failed to reach the required 2/3 vote, which led to the governor calling a 3rd special session.

• OTHER HIGHLIGHTS

The state highway funding legislation features the following highlights:

SJR 1, which authorizes the statewide vote in November 2014, would take a key step toward securing critical funding for transportation projects in Texas, according to supporters of the legislation.

The related measure, HB 1, would allow the Legislature to take necessary measures to ensure a minimum balance in the so-called “Rainy Day Fund” was available to respond to natural disasters and fiscal emergencies. HB 1 calls for the appointment of a committee of legislators to determine a sufficient balance for the Rainy Day Fund.

In addition, HB 1 would require the Texas Department of Transportation to achieve savings of $100 million in administrative and operating efficiencies, not including transportation projects.
According to a bill analysis of both measures:

While far from a cure-all, HB 1, in combination with its associated constitutional amendment, SJR 1, together would present a politically viable means to secure a portion of the funding Texas needs to maintain roadway congestion at current levels, given population and economic growth. Although many options for highway funding have been discussed in the past three regular legislative sessions, these have not proved politically feasible.

• RAINY DAY FUND PROTECTED

HB 1 would allow the Legislature to take necessary measures to ensure a minimum balance in the Rainy Day Fund was available to respond to natural disasters and fiscal emergencies. The bill would call for the appointment of a committee of legislators to determine a sufficient balance for the Rainy Day Fund, below which no general revenue would be transferred to Fund 6. The committee would have to consider specific conditions in the bill and would base their decision on the comptroller’s revenue projection for the Rainy Day Fund.

The sufficient balance provision in House Bill 1 would strike a compromise between an automatic Fund 6 transfer, irrespective of the status of the Rainy Day Fund, and a constitutionally established floor under which no transfer would be made. Without a floor, a combination of unforeseen events could leave the Legislature with insufficient funds to finance emergency spending needs. A constitutionally designated floor, on the other hand, might not provide the Legislature sufficient flexibility to meet varying needs each session.

HB 1 would provide an assurance that a sufficient balance remained in the Rainy Day Fund while granting each Legislature license to address the needs of the time. In addition, it would enable the Legislature to adjust a sufficient balance determination within the first 60 days of a regular session and ensure proper legislative oversight in determining what the state should maintain as a reserve fund.