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Follow TURFTwo state leaders seek oil & gas taxes to fund roads
These tone-deaf politicians just don't get it. We collect $4 billion in existing road taxes (from gas taxes and vehicles sales tax) that isn't being allocated to roads and is being spent on funding general government. Yet the only options they push involve grabbing new revenues - money Texas needs for a emergencies. Dedicate existing road taxes to roads before we heist more tax money just to placate budget writers who prefer a spending spree...
Senators devise another road-funding plan: use oil and gas taxes
By Kate Alexander and Ben Wear
Austin American Statesman
Tuesday, May 28, 2013
Looking to dredge up more money for transportation, two leading state senators hope to pass a measure that would ask voters to direct close to a billion dollars a year in oil and gas taxes to highways rather than the state’s rainy day fund.
The idea from Sens. Tommy Williams, R-The Woodlands, and Robert Nichols, R-Jacksonville, first surfaced at the tail end of the regular legislative session, which came to a close Monday. But it was too late to get House buy-in, so the senators are pushing to persuade Gov. Rick Perry to add the issue to the agenda for the newly called special session.
If that barrier is cleared, they’ll likely have to overcome vigorous opposition from fiscal hawks inside and outside the Legislature who argue that the Republican-controlled body spent too much money in the two-year budget now awaiting Perry’s signature.
Williams, chairman of the budget-writing Senate Finance Committee, and Nichols, who runs the Senate Transportation Committee, Monday submitted Senate Joint Resolution 2, a proposed constitutional amendment. If voters were to approve it in November, it would take about half of the $1.7 billion annually in severance taxes that goes to the fund and instead direct it to the Texas Department of Transportation. The rainy day fund would still get the other half.
Legislative estimates show the additional money for TxDOT would grow from $845 million in the 2013-14 fiscal year to $932 million two years later.
“It is a very robust funding source,” Williams said Tuesday, one that doesn’t require raising taxes or fees and instead spends an existing funding source on “everyday needs of the state” rather than putting them in a huge savings account.
The rainy day fund is projected to have about $8 billion in it by the end of the next biennium because the Legislature this session used about $4 billion of it for water projects and public education.
“You have to have a transportation system that’s going to allow goods and services to move around the state,” Williams said.
Perry, asked Tuesday about putting transportation funding on the special session agenda, said that the state had made considerable progress on transportation over the past decade.
“Is it enough?” Perry said. “From my perspective, no. Again, I think it’s a little bit premature, with less than 24 hours since we called the special (session), to be determining whether we’re going to be adding anything to the call or not.”
Many legislators, including Nichols and Williams, have said TxDOT needs to rely less on debt — which now tops $16 billion — and more on a predictable revenue source.
TxDOT officials early in the regular session said that, aside from maintaining the agency’s nearly $10 billion annual budget, it needed up to $4 billion more a year just to keep urban congestion from getting worse and to maintain existing state highways. And they asked for an additional $1.6 billion to repair and reinforce roads damaged by heavy trucks in the state’s booming oil and gas areas.
What TxDOT got was an extra $850 million, including $400 million for general spending by discontinuing using that much gas tax and vehicle registration money on the Texas Department of Public Safety, and $450 million for oil patch road repairs.
Williams dismissed as “bunk” the argument from activists and some legislators that the rainy day fund should remain off-limits to bolster the state’s credit rating.
“The rainy day fund is an important component of that, but it’s not some holy grail,” Williams said, who added that a robust economy fostered by a good transportation system is also an important component of the credit rating.
Authorized by voters in the wake of the state’s economic collapse in the late 1980s, the rainy day fund was intended to to smooth over the ups and downs of state revenues that came from big fluctuations in the economy. It was never expected to accumulate billions, as it has since the oil and gas boom began in 2008.
But some conservatives say using any of that accumulation is fiscally irresponsible, which irks Williams.
“I just saw a lot of demagoguing going on about this rainy day fund business, and I just don’t think that they really know what they’re talking about,” Williams said.
Williams took particular issue with budget information being proffered by the Texas Public Policy Foundation, a conservative policy organization with close ties to Perry.
“I’m a fiscal and social conservative, and what I would say about the Texas Public Policy Foundation is that they’ve squandered a lot of their political capital with misinformation this session,” Williams said. “It’s fuzzy math, and it’s fuzzy math they’re using to enhance their fundraising.”
Brooke Rollins, president and CEO of the organization, said she has the utmost respect for Williams but sometimes even allies disagree.
“We have disagreed on several things in this past session, but it’s important to note that we also have a long record working together in seeing Texas prosperous and free. Whatever our differences now, I know Senator Williams always has that priority first in his heart — and that’s the common ground that matters in my book,” Rollins said.