Highway Funding Highlights of the 84th Texas Legislature

Written by  Thomas L. Johnson

• $1.2 billion per year from Prop 1
• $700 million per year after ending diversions from Highway Fund
• $2.5 billion per year from the state’s general sales tax revenue—if voters approve a constitutional amendment in the Nov. 3, 2015 election. Transfer of the money to the highway fund can only be made after the sales tax revenue reaches $28 billion. The threshold is expected to be reached.*
• $432 million per year—beginning with the 2020 fiscal year, anticipated yield from 35 percent of the motor vehicle sales tax revenue exceeding $5 billion. This number will increase as the tax revenue from vehicle sales increases.**

* The ballot number is Proposition 7; the annual $2.5 billion dedicated revenue for the highway fund will continue for 15 years. At that point, the Legislature can vote to extend the dedicated revenue in 10-year periods.
** The Legislature will review the 35-percent motor vehicle sales tax revenue dedication after 10 years. Legislators can extend the dedicated revenue source for highways for another 10 years.

A chief architect of a hefty highway-funding proposal visited AGC Chapter headquarters in early June and thanked members for helping to educate Texans about the state’s struggle to handle increasing traffic congestion and safety issues.

Sen. Robert Nichols, R-Jacksonville, was still beaming two days after the Texas Legislature adjourned. And the Senate’s transportation expert had a simple reason for his good mood: He helped craft a legislative deal that would provide the largest single transportation funding increase in Texas history if voters ratify the package in the November election. It could result in a $75 billion highway funding increase over the next 15 years.

“It’s the biggest highway program in the nation. It’s the biggest single one ever in the state of Texas,” Sen. Nichols told AGC members. “I’m excited.”

“I get a lot of credit, but I’m not the one who should get all the credit. You guys should get a lot of credit,” he added.

Nichols and other state leaders credit the overwhelming success of Prop 1 in last November’s election for grabbing the attention of Texas legislators. AGC of Texas took the lead role in developing and executing a campaign blitz to help voters understand the dire straits of highway funding and the growing consequences of traffic congestion, poor roads and less safe driving conditions.

Nearly 80 percent of Texas voters supported Prop 1. It’s the same sort of super support for a ballot issue typically only seen for such measures as property tax breaks for widowed spouses of veterans.

“We’re here because of the public telling us,” House Transportation Chairman Joe Pickett told colleagues in the final hours of the legislative session—and moments before the final vote on SJR 5 (the massive highway funding measure). “Eighty percent said Prop 1 was important, so we’re riding off of the initiative of that success. Eighty percent!”

The whopping 80 percent sent a loud, screaming message to legislators and state leaders. Texans have become weary of wasting time in traffic congestion, they don’t like toll roads, and they don’t want to add to the state’s $31 billion highway debt.

“It doesn’t matter if you are an R (Republican) or a D (Democrat), when you are stuck in traffic,” Sen. Nichols reminded AGC members.

It took eight votes during the 2013 legislative sessions before the House mustered the necessary 100 votes to put Prop 1 on the ballot. This year, only one legislator among 181 Texas lawmakers voted against the new highway funding proposal.

Realizing the huge support for highway funding, Chairman Pickett and other state leaders decided to advance the election for the next round of highway funding to this November instead of November 2016 as previously planned. The change was inspired by many lawmakers who want to campaign for the issue this fall when they will have time and flexibility to do so. Most will be running their own campaigns a year later, making it harder to wrap themselves around the popular highway issue.

AGC members financed an ambitious campaign last summer and fall to highlight the importance of Prop 1. They continued the campaign for additional investment throughout the legislative session, with AGC staff and members continuously visiting legislators and testifying before committees. Scores of AGC members flooded the Capitol on the “legislative fly-in” day in February.

Robert Nicholes

Senate Transportation Chairman Robert Nichols, R-Jacksonville, spoke to AGC of Texas members Tuesday (June 2) at the monthly membership luncheon at chapter headquarters. The senator credited AGC members with helping push Prop 1 election numbers to 80 percent last fall. That huge show of public support grabbed the attention of Texas lawmakers, who approved additional highway funding measures in the just-concluded legislative session.

The total amount of new highway money will reach $75 billion over the next 15 years, he said.

Nichols reminded members that he tried to run with a motor vehicle sales tax revenue-dedication-bill for highways during the 2013 session. Senate Finance Chairman Tommy Williams, R-The Woodlands, blocked him. Williams later resigned from the Senate to become a vice chancellor at Texas A&M University.

“I had no idea that Tommy Williams did all of us the greatest favor by saying, ‘No, you cannot do it. So I said give me the ground rules. He said ‘no new taxes; no new fees; you can’t have any school money; you can’t have any money in the Rainy Day Fund. So other than that, go help yourself.’“

Legislators ended up in special sessions and the end result was Prop 1.

“Had (Tommy Williams) not told us no (to the motor vehicle sales tax) we would have never done Prop 1,” Nichols said. “Prop 1 is big, and it gets bigger in the years to come 5-10-20 years out because every decade the oil and gas severance tax goes up,” Sen. Nichols said. “Even in down cycles, we’re at $1.2 - $1.3 billion. But we would not have gotten that if we had done the motor vehicle sales tax because you can’t do two big ones in a year. Had we done the motor vehicle sales tax, no one would have supported the other one, so it’s a blessing in disguise.

AGC Highway Funding Task Force Chairman Johnny Weisman of Hunter Industries emphasized the importance of stable and predictable highway funding during appearances before legislative committees.

Texas needs to invest at least $5 billion more per year on highways and bridges simply to keep traffic congestion at current levels, according to a study by Texas A&M’s Texas Transportation Institute. Prop 1 will provide a projected $1.2 billion per year over the next two years, which comes from a share of the state’s oil and gas severance tax revenue.

Sen. Nichols credited the overwhelming Prop 1 support for making it easier for lawmakers to end the $700 million-a-year diversion from the highway fund. Voter approval on the constitutional amendment (the ballot number will be decided later in June) will result in an additional $2.5 billion for highways starting in 2017 (FY18) and another chunk starting in 2019 (FY20), with a portion of the sales tax revenue on motor vehicles estimated at more than $400 million a year. The amount will keep growing as the vehicle sales tax increases.

AGC President Doug Walterscheid of J. Lee Milligan wants the Chapter to “again spearhead a massive education and advocacy program to ensure overwhelming passage of what will amount to an increase in available roadbuilding money averaging $5 billion a year for 15 years.”

AGC of Texas members contribute a modest fee for the chapter’s Infrastructure and Education Fund, which finances public awareness and advocacy campaigns. The Chapter loaned $400,000 last year to help making the Prop 1 campaign a winning success.

The AGC Board of Directors voted unanimously to temporary increase the IEF dues in an effort to finance the new campaign, pay off the $400,000 debt and to create a reserve of at least $2 million.

The Texas Realtors Association plans to spend $6 million this year to promote three ballot priorities for the real estate industry, including the highway funding issue.

“We need to have a war chest,” Bob Lanham (Williams Brothers) said. “We have regulatory battles. They will become more numerous and more expensive. If we don’t have a war chest, we will get left behind.”

Joe Picket

House Transportation Chairman Joe Pickett, D-El Paso, used a “personal privilege” speech in the final days of the session to provide colleagues a background on transportation funding and an update on efforts this session to achieve consensus on increasing investments for highway infrastructure.

The rarely used “personal privilege” speech allowed Pickett to have the full attention of his colleagues as members are required to take their seats during such action.

He then moved to SJR 5 - the funding measure that would dedicate $2.5 billion of highway money per year from a portion of the state’s general sales tax revenue. Pickett told members “we are here because of the public telling us” they want more investment in highways after voting for Prop 1 last year by a whopping 80 percent.

“We are riding the momentum of that initiative,” Pickett told his colleagues.

Rep. Donna Howard, D-Austin, (in the photo) asked Pickett several questions. She was one of two House members who opposed the measure in an earlier form but supported the final resolution, which will go to voters in the Nov. 3 election.

The dedicated highway funding measure passed the House, 142-1 and 31-0 in the Senate.

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