The Mobility Fund Switcheroo
Road fund is a bit short: $135 million
November 1, 2004
Ben Wear
Austin American-Statesman
Copyright 2004
By now, the Texas Mobility Fund was supposed to have about $175 million in it.
Instead, that fund, created by Texas lawmakers to be the primary seed money for toll roads, had just $39.7 million on hand as of late last month.
Oddly enough, however, that almost 80 percent shortage will have no effect on the ever-growing move in Texas towards turnpikes. Instead, it's more likely to affect prisons, or education, or children's health care, or any of the myriad other things that Texas government does besides build roads.
Hang on, this gets a little complicated.
Texas voters created the mobility fund in 2001 by approving a constitutional amendment. But the fund had no funds, or any way to get some, until the Legislature passed another law in 2003 to channel new, and then old, state money into it.
That flow of money was supposed to start in September 2003.
One thing you have to know to understand all this: The actual money going into the mobility fund was never intended for roads. Instead, the idea was to get a regular source of annual money, something like $250 million, and then go borrow $3 billion or so on the bond market.
That borrowed money is what would be spent on roads, including in Central Texas. The annual state revenue would then go to pay back the bondholders.
But bond investors are exacting, self-centered types who really like to be sure they'll get paid back.
So legislators knew that the money dedicated to the mobility fund would have to be pretty solid and predictable, revenue with a history of coming in like clockwork, or the bond market wouldn't lend the big money to the fund. They settled on fees that we all pay to the Department of Public Safety for driver's licenses, driver's records (our insurers tend to pay that) and vehicle inspections.
The problem is, those fees go into the state's general pot of money for all those other needs. If you take them for roads, you have to replace them with something.
So in 2003, the Legislature created two new sources of money, putting a $30 surcharge on all moving violations and creating something called the Driver Responsibility Program. That program, to be managed by the DPS, created another set of fines for drunken drivers, people with multiple moving violations and drivers without insurance or a valid license.
Backers of this law, but not the Texas comptroller's office, said these two sources of money would raise $138.7 million in fiscal 2004, which ended Sept. 30, and $211.8 million this fiscal year. Because the comptroller didn't agree, legislators agreed to channel that money to the mobility fund for these first two years, then switch to the more reliable old DPS fees in 2006.
What does all this mean? Well, starting next October, in fiscal 2006, the mobility fund will have its steady -- and bondholder-friendly -- source of money. The Texas Department of Transportation should have no trouble borrowing, or paying back, its $3 billion. Toll roads, here we come.
The general fund, meanwhile, will get that other money, you know, the fees that have fallen a wee bit short.
To be fair, the longer-term performance of those new fines should be better than what has happened so far. That $30 fee on moving violations, collected by local agencies and sent on to the state, was expected to have brought in about $80 million the first year. Instead, it brought all of the $39.7 million currently in the mobility fund, or about half of its target.
The Driver Responsibility Program, on the other hand, brought in bupkus: zero. That's about to change.
That program, unlike the $30 fee, required considerable work to get up and running. The DPS had to figure out how to keep track of it, to bill the offenders and enforce it.
The letters to the miscreants, 200,000 of them so far, have started going out only this past month. The DPS estimates that it is owed $73 million for fiscal 2004 under the program.
But the mobility fund, by law, gets only 49.5 percent of that money. And the DPS estimates it will be able to collect just two-thirds of what it is owed. That means that at best, the mobility fund will get $24 million or so for fiscal 2004 from that source. That's about 40 percent of the predicted number ($58.7 million).
The DPS has rosier predictions going forward, but the comptroller's office has yet to examine those figures.
In the short run at least, the two new revenue sources will be lucky to generate $100 million a year, far below the $223.2 million that the long-standing DPS fees brought in during fiscal 2004. The general fund, starting next year, almost certainly will take a significant hit.
Transportation leaders are likely to be unsympathetic to this state of affairs. Already, a quarter of the gasoline tax goes to schools, several hundred million dollars a year from that tax goes to fund the DPS, and other transportation-related fees go into the state general fund. Roads have been taking their own hit for a very long time to finance other state needs, they say.
But this mobility fund switcheroo was not supposed to be a way to redress that situation. It was supposed to be an even swap. That's not going to be the case, it appears, unless the next Legislature finds some more money. We'll see.
Getting There appears Mondays. For questions, tips or story ideas, contact Getting There at (512) 445-3698 or bwear@statesman.com.
© 2004 Austin American-Statesman: www.statesman.com
November 1, 2004
Ben Wear
Austin American-Statesman
Copyright 2004
By now, the Texas Mobility Fund was supposed to have about $175 million in it.
Instead, that fund, created by Texas lawmakers to be the primary seed money for toll roads, had just $39.7 million on hand as of late last month.
Oddly enough, however, that almost 80 percent shortage will have no effect on the ever-growing move in Texas towards turnpikes. Instead, it's more likely to affect prisons, or education, or children's health care, or any of the myriad other things that Texas government does besides build roads.
Hang on, this gets a little complicated.
Texas voters created the mobility fund in 2001 by approving a constitutional amendment. But the fund had no funds, or any way to get some, until the Legislature passed another law in 2003 to channel new, and then old, state money into it.
That flow of money was supposed to start in September 2003.
One thing you have to know to understand all this: The actual money going into the mobility fund was never intended for roads. Instead, the idea was to get a regular source of annual money, something like $250 million, and then go borrow $3 billion or so on the bond market.
That borrowed money is what would be spent on roads, including in Central Texas. The annual state revenue would then go to pay back the bondholders.
But bond investors are exacting, self-centered types who really like to be sure they'll get paid back.
So legislators knew that the money dedicated to the mobility fund would have to be pretty solid and predictable, revenue with a history of coming in like clockwork, or the bond market wouldn't lend the big money to the fund. They settled on fees that we all pay to the Department of Public Safety for driver's licenses, driver's records (our insurers tend to pay that) and vehicle inspections.
The problem is, those fees go into the state's general pot of money for all those other needs. If you take them for roads, you have to replace them with something.
So in 2003, the Legislature created two new sources of money, putting a $30 surcharge on all moving violations and creating something called the Driver Responsibility Program. That program, to be managed by the DPS, created another set of fines for drunken drivers, people with multiple moving violations and drivers without insurance or a valid license.
Backers of this law, but not the Texas comptroller's office, said these two sources of money would raise $138.7 million in fiscal 2004, which ended Sept. 30, and $211.8 million this fiscal year. Because the comptroller didn't agree, legislators agreed to channel that money to the mobility fund for these first two years, then switch to the more reliable old DPS fees in 2006.
What does all this mean? Well, starting next October, in fiscal 2006, the mobility fund will have its steady -- and bondholder-friendly -- source of money. The Texas Department of Transportation should have no trouble borrowing, or paying back, its $3 billion. Toll roads, here we come.
The general fund, meanwhile, will get that other money, you know, the fees that have fallen a wee bit short.
To be fair, the longer-term performance of those new fines should be better than what has happened so far. That $30 fee on moving violations, collected by local agencies and sent on to the state, was expected to have brought in about $80 million the first year. Instead, it brought all of the $39.7 million currently in the mobility fund, or about half of its target.
The Driver Responsibility Program, on the other hand, brought in bupkus: zero. That's about to change.
That program, unlike the $30 fee, required considerable work to get up and running. The DPS had to figure out how to keep track of it, to bill the offenders and enforce it.
The letters to the miscreants, 200,000 of them so far, have started going out only this past month. The DPS estimates that it is owed $73 million for fiscal 2004 under the program.
But the mobility fund, by law, gets only 49.5 percent of that money. And the DPS estimates it will be able to collect just two-thirds of what it is owed. That means that at best, the mobility fund will get $24 million or so for fiscal 2004 from that source. That's about 40 percent of the predicted number ($58.7 million).
The DPS has rosier predictions going forward, but the comptroller's office has yet to examine those figures.
In the short run at least, the two new revenue sources will be lucky to generate $100 million a year, far below the $223.2 million that the long-standing DPS fees brought in during fiscal 2004. The general fund, starting next year, almost certainly will take a significant hit.
Transportation leaders are likely to be unsympathetic to this state of affairs. Already, a quarter of the gasoline tax goes to schools, several hundred million dollars a year from that tax goes to fund the DPS, and other transportation-related fees go into the state general fund. Roads have been taking their own hit for a very long time to finance other state needs, they say.
But this mobility fund switcheroo was not supposed to be a way to redress that situation. It was supposed to be an even swap. That's not going to be the case, it appears, unless the next Legislature finds some more money. We'll see.
Getting There appears Mondays. For questions, tips or story ideas, contact Getting There at (512) 445-3698 or bwear@statesman.com.
© 2004 Austin American-Statesman:
posted by Porkus Maximus Tex: at Tuesday, November 02, 2004
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