Friday, January 07, 2011

"For new construction, TxDOT is spending this year and next a total of $2.71 billion, of which fully $2.01 billion will come from issuing more debt"

House transportation chair: Public education should not be funded through gas tax receipts


Michael Lindenberger/Reporter
Dallas Morning News
Copyright 2011

Is it good policy to give public education one-fourth of every penny collected by the state motor fuels tax?

Every gallon of gasoline sold in Texas carries a 20-cent state tax, but the Texas Constitution permits only 15 cents of that money to go to transportation, reserving a nickel per gallon off the top for public education.

pickett2.jpegThat's too much, and Texas' underfunded highways need that money too bad to let it be sent to pay for our schools, said Rep. Joe Pickett, D-El Paso, the House transportation chairman. (Photo: Joe Pickett.)

Speaking at a gathering of transportation advocates, engineers, state wokers and others Wednesday, Pickett said public education is already funded by roughly $50 billion a year -- once local, state and federal funds are included.

"I think our schools could survive without it," he said, emphasizing the small role the gas tax funds play in the overall education budget. He stopped short of saying he would actually push for such a change this session, a nod to the political odds against it.

How much are we talking? According to the FHWA, the motor fuels tax generated about $3 billion for the state of Texas in 2009. If a quarter of that went straight to education, that's $750 million.(Here's the FWHA chart.

That would be serious money for transportation, though probably not enough to solve all of its funding problems. For one thing, of the approximately $2.25 billion in gas tax receipts left over for transportation, about $600 to $750 million per year are siphoned off for uses only tangentially related to our highways, including the Department of Transportation, which gets about $1.2 billion of its funding every two years from the gas tax.

Ending those diversions has proved very difficult, despite near unanimous agreement in the Capitol that DPS should not be funded with gas tax dollars. The problem, as Pickett noted Wedesday, is that everyone agrees the funding should change, but no one believes that DPS should go without. That means finding new money to replace the gas tax dollars, something that enjoys much less widespread support.

Plenty of conservatives would welcome the idea of ending the practice of diverting the nickel to education, just as they argue it shouldn't be used to pay state police. That's a philosophical position that basically argues that gas taxes should be used for things that support the activities that are taxed in the first place. If drivers are taxed for driving, then the money generated should be used to improve roads, for instance. That would make the gas tax more like a true user fee.

But few folks in that camp, and few state leaders, are willing to support new revenue to replace the funds restored to transportation. Without that new revenue, the idea of ending the diversions remains a pipe dream.

Thumbnail image for Thumbnail image for perry.JPG.jpegThat is, unless, you agree with Gov. Rick Perry, who says budgeting is all about making choices. If Transportation needs more money, he said, it should get it -- but only if lawmakers decide to take it from some other purpose that isn't so critical.

But he has typically stopped short in suggesting which areas should be cut, or from saying how much. And it will take that kind of hard-nosed cutting, or a willingness to raise new revenue, to make real any commitment to end the diversions, whether it's the smaller step of keeping the gas tax dollars away from DPS or the giant step of changing the Constitution to cut public education out of its nickel.

As for TxDOT's budget, it's going to need more money soon, or else it's going to have to stop doing a lot of the things that Texans have counted on it to do. That's the inescapable conclusion you reach once you look at its budget.

txdot budget graphic2.jpgPickett showed an interesting breakdown of TxDOT's budget. It's budget for 2010-2011 is about $16 billion, not counting the money it got from NTTA that is restricted for use in North Texas.

Of that total, though, Pickett points out that more than $10 billion is immediately spoken for -- either to make payments on previously issued loans (1.64 billion), to make continuing payments on mutli-year projects that have already begun construction ($3.1 billion), or to pay for maintenance on the sprawling network of aging highways and bridges ($5.65 billion).

That's two-thirds of its two-year budget gone, and not a single penny has been spent on a new highway or bridge. For new construction, TxDOT is spending this year and next a total of $2.71 billion, of which fully $2.01 billion will come from issuing more debt (meaning that the debt service figure quoted above will only rise in future years.) The department is spending just $700 million in cash on new construction.

The rest is tied up in a bundle of uses -- including about $1.6 billion on "project development costs" which presumably are design and right of way acquisition for future projects -- and a host of smaller items, from rail safety programs to rural public transit inititiatives.

So, another $750 million a year from the gas tax would mean a great deal to drivers who are looking for TxDOT to begin building more roads or who worry that it will soon begin robbing maintenance dollars to keep the construction program on life support.

That, of course, was the real point of both Pickett's comments and those made by Sen. Tommy Williams: Sooner or later, both men said, Texans will have to pay more for transportation. The chart below, presented by Pickett, shows how we compare with other states.
gas tax illustration txdot copy.jpg

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