Texas public policy foundation
Finding More Money for Roads
 
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These days, the buzz around the Capitol is that the state needs more money for roads, presumably to accommodate the influx of new residents, jobseekers, and businesses fleeing other high-tax states. But, do we need to raise new revenue for roads, or, is there money in the budget for it already? Consider the following solutions:

End diversions--$1.2 billion in 2012-13

As the Foundation has noted in the past, a lot of gas tax revenues are being diverted every year out of the State Highway Fund to pay for non-transportation-related expenses, like border security, counterterrorism, and crime labs. For the current budget, this figure amounts to approximately $1.2 billion.

Ending diversions and redirecting those needed resources back to building and maintaining roads should be the first thing lawmakers do to address transportation funding.

Speaking of diversions… 

End the education diversion--$1.5 billion in 2012-13

Article VIII, Section 7-a of the Texas Constitution requires that 25 percent of all motor fuels taxes are deposited in the Available School Fund (ASF), with the remaining 75 percent deposited into the State Highway Fund.

Public education is obviously an important priority, but it makes little sense to fund K-12 with revenues generated by the sale of gasoline, diesel fuel, and liquefied gas. The taxes levied on these items, after all, are closely associated with the use and maintenance of public roadways but have little to no relationship with educating schoolchildren. And the money at stake is no small matter.

The Legislative Budget Board estimates that for the current budget a total of $1.5 billion in motor fuels taxes will be deposited into the ASF, bringing the total diverted from the State Highway Fund since fiscal 2006 to over $6 billion.

Take the city of San Antonio, for example. Up until recently, the residents of San Antonio elected to use only some of their available 2-cent local sales tax capacity to fund city operations (1-cent), parks and the environment (.125 cents), and transportation (.75 cents). Residents, in their wisdom, chose not to direct more money to roads and the like with the remaining one-eighth local sales tax capacity, choosing instead not to tax themselves the full load—that is, until the most recent election when residents voted to create and fund a pre-K program with remaining capacity.

The point is that if we are really in a transportation funding crisis, then the Legislature should consider restricting how and what local sales taxes can be used for. Wants like pre-K programs or needs like roads? It might not be politically popular, but it is definitely an option to consider.

Prioritize state spending—Unrestricted

Contrary to what some might say, there is a lot of excess in the state budget. And if the state is really facing a transportation funding crisis, then it is critical that we re-direct the state’s resources to the areas that truly need them. 

Here are just a few of the 100+ agencies and programs that we think lawmakers could eliminate, consolidate, or reduce funding for and direct those resources at the state’s transportation needs:

Encourage local governments to prioritize and use the tools they have—Unknown

Local communities have a part to play in funding roadways too via their ability to commit a portion of their local sales tax revenues to transportation (see here for more). However, locals have not always been willing to step up to the plate and use the tools they have to tackle this “crisis.”