Emerging Legislative Deal Could Shift at Least $2.5 Billion in State Funds to TxDOT

AASHTO Journal, 29 May 2015

Senior transportation lawmakers in the Texas Senate and House said they reached an accord that could generate billions of dollars more each year for the state Department of Transportation’s funding, by drawing immediately on general sales tax receipts and taking a portion of vehicle sales taxes beginning in 2020.


The Texas Tribune reported the deal calls for voters to amend the constitution to allow $2.5 billion a year in general sales taxes to go toward transportation infrastructure needs, plus a future share of motor vehicle sales taxes.

The Tribune said both Senate Transportation Chairman Robert Nichols and House Transportation Chairman Joe Pickett confirmed May 26 that they had struck the deal.

It said the accord includes trigger mechanisms that would halt the shift of both funding streams in case the Texas economy weakened.

Pickett told the newspaper the general sales tax revenue going to transportation could be stopped if revenue from that tax comes in below about $28 billion in a fiscal year, which the state collects now. “As long as you’re over $28 billion in any fiscal year, there will be $2.5 billion transferred,” Pickett said.

The story said the part of the deal that dedicates some future motor vehicle sales tax revenue to transportation dedication is more complex. Currently, it said, all of the 6.25 percent sales tax on automobiles goes into the budget’s general fund and generates about $4 billion a year. The accord would transfer 35 percent of the revenue stream beyond $5 billion starting in 2020.

TxDOT has warned that it needs to spend billions more each year to maintain the state’s highway system and head off more congestion as the population increases.

On top of this emerging deal, the Tribune said, budget writers also agreed to boost TxDOT’s spending during this legislative session, largely by ending $1.3 billion in diversions of motor fuel user charges to pay for budget uses other than road construction and maintenance.

And last fall, the story added, voters approved a ballot measure that allowed budget writers to allocate $2.5 billion more to roadways with funds from the state’s tax revenue from oil production.

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