News & Press: Public Policy Update

ACEC Texas Public Policy Council - A Little History

Thursday, October 16, 2014  
Posted by: Michael Hancock
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ACEC Texas Public Policy Council


October 16, 2014





The transportation funding battle last session was and appears to be next session a fight between proponents of general revenue spending versus user fees. A little history . . . .


The Governor proposed to dedicate three-quarters of the motor vehicle sales tax to the highway fund as well as the state's portion of sales taxes on tires and auto parts. Another part of the bill limited the annual amount of money that could be appropriated from the highway fund to DPS.


The bill passed the House with the support of Dallas, Houston, and San Antonio Chambers of Commerce and other groups then ran into opposition in the Senate from teacher and education groups, who testified that money from the Treasury surplus for highways should be considered alongside all other priority demands. One statewide official said that he thought the most logical approach to solving the highway funding dilemma was passage of an increase in the state gasoline tax, among the nation's lowest, although he conceded it was probably not practical.


Sound familiar? The year was 1977 and the personalities were Dolph Briscoe, Bill Hobby, and Bob Bullock.


That year the Legislature ultimately passed legislation providing for an annual transfer of state general revenues sufficient to make up for the impact of inflation on the highway program. (HB 3)


The problem continued. "The problem is that revenue used to repair deteriorating roads and implement new projects currently is being threatened by declining tax receipts and skyrocketing maintenance costs. . . . There are several reasons why highway revenue is leveling off. . . . Smaller vehicles use less gasoline and that means an ultimate drop in revenue derived from the state's motor fuels tax and the federal fuel tax. . . . Since the bulk of receipts from these taxes is designated for highway funding, that means a squeeze on that program." (Tyler Morning Telegraph, August 30, 1980)


And, of course, in the midst of all this "the State Department of Highways and Public Transportation has instructed all its districts to make a 90-day study of their workloads and financial operations" to deal with the department's growing financial worries. (Fort Worth Star-Telegram, July 23, 1975)


"[The Texas Good Roads Association] has approved a resolution asking the Legislature to approve additional money to maintain highways for areas of the state with 'energy impacted' roads. Many roads in Central and East Texas have been damaged by the development of oil and gas wells and lignite mining, [executive director of the organization Eugene] Robbins said." (Houston Chronicle, December 29, 1980)


As the drain on state general revenues grew to (the then astronomical sum of) $400 million per year, the state's Republican Governor Bill Clements along with Speaker Bill Clayton and Lt. Governor Bill Hobby proposed indexing or increasing the fuel tax. "This is a user tax," said Clements. "The philosophy is that people who use the highways should pay for the highways. Dipping into the general revenue fund in place of the user tax is wrong," he said. (Fort Worth Star Telegram, March 6, 1981)


"Even lawmakers who share the view that highway taxes should be increased concede that they might have trouble selling their argument at a time of surplus revenues and high gasoline costs. 'I think there be some opposition to increase a tax during a period of surplus because gasoline is already expensive,' said Sen. Babe Schwartz." (Dallas Times-Herald, October 21, 1979)


The motor fuel tax was increased to ten cents per gallon in 1984 and 15 cents per gallon in 1986.


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