Transportation Committee Takes on Tough Budget Math
The story of Texas government is, by and large, the story of robbing Peter to pay Paul, and then promising to pay Peter back with Polly or Pedro’s money. The Legislature finds it pretty easy to hack money out of the budget in hard times, but balks at restoring funding during flush times.
So, how to pay for urgent needs? In those good times, like now, the Legislature goes looking for Peter to shake down. Today’s hard choice comes in the form of Senate Bill 5 and Senate Joint Resolution 5, both authored by state Sen. Robert Nichols (R-Jacksonville), the chair of the Senate Committee on Transportation. Both passed out of Nichols’ committee 8-1 today.
Nichols’ legislation would take about half of the taxes generated by the sale of motor vehicles and give it to the state highway fund. Normally this money goes into the general revenue fund, which is the giant pot of money the Legislature uses to pay for education, health care and almost anything else that state agencies do. (The highway fund would actually receive a little less than half at first—the tax generates about $4 billion a year, and his proposal would have the first $2.5 billion go to general revenue, the next $2.5 billion go to the highway fund, with both funds taking half of whatever comes after.)
The Texas Department of Transportation badly needs the money—the agency has estimated it requires $10 billion in additional funding each biennium just to handle the current level of congestion in the highway system. And, as Nichols said in his opening remarks, TxDOT needs to know the money will be there. “They need to have reasonable assurances six, eight, 10 years out how much money they’re going to count on, so they can begin the process for these big projects require,” Nichols said,
Nearly every legislator would like TxDOT to be made whole, if for no other reason than almost everyone uses the state’s transportation network—unlike, say, public schools and state health services. And an impressive coalition of movers and shakers has coalesced behind Nichols’ plan. On Wednesday, a press conference with Lt. Gov. Dan Patrick also featured the kind of panel of besuited white businessmen that convene at the Capitol when something big is about to happen.
But there was also some discomfort at today’s committee hearing, from both the left and the right. State Sen. Bob Hall (R-Edgewood) said that the new funding for TxDOT amounted to a drop in the bucket—he’d like to see more of the auto sales tax receipts go to road funding.
But others on the committee worried primarily about the opposite—the effect that pulling money from general revenue would have on the rest of the budget. State Sen. Rodney Ellis (D-Houston), in particular, asked how redirecting billions of dollars from the general revenue fund was complementary with the Legislature’s tax cut ambitions.
“If we take that out, how do we make it up? I know we say, it’s good not to raise taxes,” said Ellis. “How do we pay for this? It’s a very important concept, and something we do need to do. But I saw everybody yesterday feeling real good about giving some of our money back in property tax relief.”
He’d said he’d prefer that his personal property tax rebate be reinvested in infrastructure. “I guess my home might be worth a little bit more than the average cost of a home in my district, but I’d get my $180 and put it back into roads, to be honest with you,” Ellis said. “I’m just wondering how we do it all.”
Gov. Greg Abbott and Lt. Gov. Dan Patrick are hell-bent on passing tax cuts large enough that people notice—part of their compact with GOP primary voters. That’s what makes Nichols’ proposals difficult. If the state had plenty of money, connecting TxDOT to a steady revenue stream would be a no-brainer. But the Legislature’s current budget proposals are packed with spending items, and some of the tax cut proposals legislators are floating would restrict the ability of the state to take in revenue in the future.
In a recent editorial calling for the Legislature to fund real needs before cutting taxes, the San Antonio Express-News collected legislators’ competing budget promises and declared that “even a Ginsu knife might not be able to slice this budget fine enough.”
State Sen. Troy Fraser (R-Horseshoe Bay), no flaming liberal, voted for Nichols’ plan but said he was wary of tying the hands of future legislators, who might need the money for something else.
“I have a huge reservation about the dedication of funds and the lack of the Legislature’s discretionary ability,” says Fraser. Nichols’ SJR 5 would ask voters to enshrine the rerouting of the vehicle sales tax in the Texas Constitution, something that would be difficult to undo. Fraser said he would “continue to explore whether it’s good public policy to dedicate” funds, he said. “But I’m going to vote for this bill to move this process along.”
Freshman state Sen. Don Huffines (R-Dallas) was having none of it. “We’ve had 30 years … to put money into highways and we haven’t done it,” he said. “The only way we’re going to make a forced savings plan is to put it in a constitutional amendment.”
That irked Fraser a bit. With “respect,” he told Huffines, “you’ve only been here about a month. Some of us have been here for a long time.” There’s a “learning curve of institutional knowledge” to be acquired. Huffines laughed amiably.
Transportation has been named one of the governor’s emergency items, meaning the Senate can take up Nichols’ plan immediately. On Wednesday, Patrick said he expected the Senate to pass the bills as early as next week.