Voters pass Proposition 1

TxDOT photo

Nov. 1, Texas voters passed Proposition 1, the amendment authorizing annual disbursements from the state’s oil and gas production tax collections to the State Highway Fund — an estimated $1.7 billion in the first year alone. In Jefferson County, the proposition passed with 84 percent for and 15 percent against.

The measure diverts half of the general revenue derived from oil and gas taxes from the Economic Stabilization Fund (ESF), also known as the Rainy Day Fund, to the State Highway Fund for the purpose of providing transportation funding for repairs and maintenance of public roads. The measure will take effect immediately and will apply to transfers the comptroller made after Sept. 1, 2014.

Although a substantial majority of voters were in favor of the proposition, which was approved by legislators last year, do they really know what they voted for?

The ballot text voters read was, “The constitutional amendment providing for the use and dedication of certain money transferred to the state highway fund to assist in the completion of transportation construction, maintenance, and rehabilitation projects, not to include toll roads.”

Proponents of the measure said Prop. 1 would reduce crashes, ease congestion, decrease injuries and even save lives, according to texansforprop1.com. It would reduce wear and tear on vehicles and create jobs, all for no new fees, taxes or debt.

“The funding mechanism set out by the proposed amendment and its enabling legislation will result in a steady stream of additional highway money that could be used for long-term planning by transportation administrators,” proponents of the proposition said in a prepared statement of the Texas Legislative Council.

Not everyone sang the proposition’s praises, however.

Opponents of the proposition, such as District 81 Texas State Rep. Tryon Lewis, spoke out against the measure, arguing that fuel taxes should pay for the highways.

“The proposition violates the ‘users pay’ principle of financing our highways: The reason Texas had the best highway system in America in the last half of the 20th century is that we utilized a ‘users pay’ system in which those who use the highways pay for them through a constitutionally dedicated fuel tax,” Lewis writes in a guest column for the Odessa American. “That finance system is fair, dependable and adequate to build and maintain highways. The legislature does need to adjust the fee from time to time to account for inflation, on average every 10 years. The last time this was done was 1991. Instead of making those adjustments, which should have been done at least twice, the legislature has resorted to gimmicks, first using borrowed money through bond issues and now proposing a raid on our state’s emergency reserve account.”

Other opponents agree with Lewis that the proposition is “raiding the Rainy Day Fund,” pointing to a similar action in 2013, which saw Proposition 6 look to the fund for $2 billion to support water infrastructure projects.

Another argument Lewis makes in the column is out-of-state drivers would get a free ride with Proposition 1 passed.

“Our major highways are choked with traffic from other states and a seeming endless line of trucks going to and from Mexico,” Lewis writes. “With fuel tax funding, those drivers’ fuel purchases help pay for some of the damage they are doing to our roads. But under Proposition 1, which gets its funding from severance taxes on natural gas and oil production, these out-of-state drivers will not have to contribute one dime to the additional funding.”

Despite arguments against the proposition, it passed overwhelmingly statewide by a vote of 79.78 percent in favor and 20.21 percent against.

After the proposition passed, TxDOT CFO James Bass responded in a video, attempting to answer questions voters might have about what the next steps will be in implementing the legislature. Bass serves as chief financial officer, overseeing the agency’s Finance Division, Toll Operations Division, and Innovative Financing and Debt Management Office.

“Voters sent a strong statement that (they) consider transportation a priority in their daily lives and passage of Proposition 1 was a very strong and first step in solving our transportation funding needs,” he said, pointing out, However, that the proposition “doesn’t fully solve our transportation needs because while proposition 1 is big, our transportation needs are even larger.”

Lawmakers estimate that although the State Highway Fund will receive approximately $1.2 billion annually from oil and gas taxes with Proposition 1 passed, the transportation agency requires at least an additional $4 billion per year.

Bass said that the next step is to meet with state legislators to decide how the money will be allocated and distributed across the state.

“Drivers across the state will begin to see increased mobility projects, enhanced safety and improved maintenance across the areas,” Bass said.

The ESF cap for 2014-15 biennium is $14.1 billion.

For more information, visit www.tlc.state.tx.us/const_amends.htm.

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