Texas lawmakers once prided themselves in their pay-as-you-go philosophy. But bowing to economic pressures of fast growth and political pressures to not raise taxes, we somehow got ourselves turned around. And in the past decade, we have racked up an extraordinary $25 billion debt to fund the building and maintenance of our roads. The result? More of our taxes are now going to servicing this debt.
That’s why we believe it’s in the best interest of our state for voters this November to support Proposition 1, a constitutional amendment that would help fund new transportation projects while allowing the state to pay down that debt.
If approved, Proposition 1 would amend the state constitution to allow Texas to split a portion of oil and gas severance tax revenues between the state’s Economic Stabilization Fund (Rainy Day Fund) and a state transportation fund.
Currently, 25 percent of this collected severance tax, from our booming oil and gas industry, goes to education; the remainder, 75 percent, goes into the Rainy Day Fund. If voters approve Proposition 1, then 37.5 percent of the oil and gas severance tax revenue would go to a State Highway Fund; 37.5 percent to the Rainy Day Fund, and 25 percent would continue to fund Texas education costs.
It’s expected that $1.7 billion per year could go into the State Highway Fund, with annual fluctuations based on the oil and gas markets.
In essence, we’d be cutting by half the amount that our state puts into savings, but as state Rep. Joe Pickett, a Democrat from El Paso, told The Monitor’s editorial board last week, what is the point in having so much in savings — more than $8 billion currently — if we have so much in debt?
Pickett, along with state Sen. Robert Nichols, a Republican from Jacksonville, co-authored this proposition. They came to McAllen on Thursday to pitch what they call the best solution to our state’s transportation debt.
And while, if passed, no new oil and gas severance tax revenue would actually go toward paying transportation debt — it would only go toward new road construction, road maintenance and right of way road property purchases — the philosophy behind this plan is that our state would pay for new construction projects and road upkeep using funds our state has on hand, not by borrowing.
How and when Texas lawmakers allowed our state to abandon its previous pay-as-you-go method on transportation projects seems to have eluded us all. Apparently it was triggered by legislation in 1987 that restricted the use of public-private partnerships and diminished the state’s ability to immediately finance projects, and thus led to massive borrowing. This has now caught up to us. Nichols says the state will flat out run out of money for new road construction and upkeep by 2016 if something isn’t done now.
We don’t condone what appears to be lax management of taxpayer funds in the past. But we need to fix the problem now.
And if voters step up and approve Proposition 1, we expect the Texas Department of Transportation to do its part and be more prudent with spending in the future. In fact, if passed, the department will be required to identify $100 million in savings and operational cost cuts. Also, a 10-member legislative committee — which Nichols last week was named to — will evaluate and determine a “sufficient balance” to maintain for the Rainy Day Fund, which was begun in 1988 and is nearing a capped amount set by a previous Legislature.
Responsible talks on such a fund balance, we’re told, have not occurred in the past, and we expect our lawmakers to take up this task with gusto. We also expect that, if voters are to sacrifice some of the state’s savings account, then TxDOT will be prudent with future projects and that future requests of this nature will not often be made of us.