Proposition 1 On Texas Ballots

Proposition 1, on November 4th ballots, asks Texas voters to approve an amendment to the Texas Constitution, “providing for the use and dedication of certain money transferred to the state highway fund to assist in the completion of transportation construction, maintenance, and rehabilitation projects, not to include toll roads.

If Texas voters approve Prop 1 on November 4th, roughly $1.7 billion will be available for road work, next year. After that, the available money will vary annually, depending on oil and gas production.  Typically, $1.2 billion in revenue can be expected, year to year. The measure authorizes additional Texas transportation funding – without new taxes, tolls or fees – that can only be used for construction, maintenance, rehabilitation, and acquiring right-of-way for public roads.

The low tax philosophy of conservatives in control of the Texas legislature has caused the state to built up over $23 billion in road construction and maintenance bond debt over the past decade. In other words, conservative legislators used the credit card, rather than allocate adequate tax revenue to fund Texas road construction.

Texas transportation debt accumulated to date commits Texas taxpayers to spend an estimated $31 billion to service and retire that debt, over two decades.

Texas has reached its credit limit and cannot borrow by issuing more bonds to fund transportation projects. Without passage of Proposition 1, the state will likely have to postpone new road projects, possibly for several years.

The burgeoning transportation infrastructure debt, combined with Texas’ rapid population growth, is why advocates now urge Texas voters to approve Ballot Proposition 1.  Texas continues to lead the nation in domestic migration; it is the number one destination for people moving from one state to another. The Texas Association of Realtors’ 2014 Relocation Report says Texas gained 584,034 people from out-of-state in 2013. The state that new Texans most often left behind was California. Texas is expected to add 18 million people by 2040. That’s in addition to the  27 million residents today. Based on the current 1.1 registered vehicles per citizen, that means another 18 million additional vehicles on Texas roads by 2040

Proposition 1 does not fully address the state’s transportation funding problem,  Texas needs an additional $4 billion to $5 billion annually to keep current traffic congestion from getting worse, as the population grows over the next two decades, according to statements from Texas Transportation Department of Transportation officials.  Additional legislative action is needed to fully fund needed to build and maintain Texas’ roads and bridges!

Additional Background:

If Prop 1 is approved by voters, the additional transportation funding would come from directing a portion of the state’s annual oil and gas production tax collections to the State Highway Fund.  Currently, the state’s Economic Stabilization Fund (ESF), also known as the Rainy Day Fund, receives 75 percent of the state’s annual oil and gas production tax collections that exceed the amount collected in fiscal year 1987, when it was created. Half of the money currently destined for the ESF would be dedicated to the State Highway Fund. The remaining half would continue to build the unspent balance of the ESF.

On Aug. 5, 2013 legislators approved HB (House bill) 1 and SJR (Senate joint resolution) 1 (Third Called Session, 83rd Legislature). These pieces of legislation could provide an estimated $1.7 billion* to the State Highway Fund in the first year of implementation. SJR 1 proposes a constitutional amendment that authorizes this deposit of funds. HB 1 outlines the details of when the funds are to be transferred and how they can be used. HB 1 will take effect only if voters approve the constitutional amendment on the ballot. The measure would divert half of the general revenue derived from oil and gas taxes from the Economic Stabilization Fund (ESF) to the State Highway Fund for the purpose of providing transportation funding for repairs and maintenance of public roads. It’s anticipated that this will result in approximately $1.2 billion per year going toward transportation funding instead of the Rainy Day Fund. If approved, the measure would take effect immediately, once the votes are certified, and would apply to transfers the comptroller made after September 1, 2014.   For additional information, please see the FAQs document.