Proposition 7 would  dedicate $2.5B of revenue for roads

Motorists drive down FM 646 in Santa Fe Wednesday, Aug. 26, 2015. A proposed project would widen the single lane road between Highway 6 and FM 1764.

A $2.5 billion annual increase in transportation funding that proponents say would ensure predictable financing for projects to improve Texas’ aging and increasingly crowded highway system is headed to voters in November.

The constitutional amendment, known as Proposition 7, would dedicate $2.5 billion of sales-tax revenue to be used for roads each year starting in 2018. 

After 2020, 35 percent of taxes collected from vehicle sales and rental tax would go to transportation, which is estimated at about $450 million, state Sen. Robert Nichols (R-Jacksonville) said. The measure would not raise tax rates. 

It would be the largest revenue increase in state highway funding in Texas history and be an integral part of a larger effort to make up an estimated $5 billion annual shortfall in the state’s transportation budget. 

“Without a good, safe and reliable transportation system we’re all going to suffer,” Nichols said. 

Pay as you go

Local transportation planners say redirecting a portion of the sales-tax revenue to roads would help the area move forward on necessary, and long sought, transportation projects. 

Proposition 7, in combination with two other recently approved measures, would come close to meeting the $5 billion gap, Nichols said. 

Even that amount would only keep congestion at current levels, according to the Texas Department of Transportation.

Nichols and state Rep. Joe Pickett (D-El Paso) led efforts in the Legislature to develop the policy and get necessary lawmaker approval to bring it to voters. 

In Texas, much of the highway funding in the last two decades has been financed with borrowed money and alternative revenue streams, particularly toll roads, Nichols said. 

Proposition 7 would get the state back on a “pay-as-you-go” system and create a more predictable revenue stream that transportation planners need to take on major highway projects, he said.

The Lone Star State is not alone in searching for highway funding. States across the nation have passed measures this year that could raise billions of dollars for transportation infrastructure after decades of declining federal funding and mounting infrastructure maintenance costs.  

More road money ahead

Texas voters in 2014 overwhelmingly approved Proposition 1, which directs some oil and gas production tax revenues to the Texas Department of Transportation. The money must be used for highway construction and maintenance. 

In fiscal year 2015, which ends Aug. 31, Proposition 1 pumped an additional $1.7 billion into the state highway fund. The transportation department said the tax revenues added $1.2 billion to the pot for fiscal year 2016, a reduction brought on by declining oil and gas production. 

That injection of money has allowed transportation planners to move forward on local projects, including construction on FM 646, said Alan Clark, director of transportation planning at the Houston-Galveston Area Council. 

Also, starting next month, a provision in the budget approved by lawmakers this year would end “diversions” of gasoline tax and vehicle registration money. That money is currently going mostly to pay for state troopers, but would instead go to roads, under the new provision.

That budget change is expected to put an extra $700 million in the highway fund in the next year, Nichols said.  

Transportation department spokeswoman Veronica Beyer said the agency is expected to have $10.5 billion in fiscal year 2016 that can be spent on roads — about a third of that money comes from the federal government. 

“Without new state programs, such as Proposition 1, we would have expected a decrease in our overall funding due primarily to the consumption of state authorized borrowing programs,” Beyer said.

On down the road

Clark said the transportation department typically spends about 20 percent of its road construction and maintenance budget in the Houston area. 

The Houston-Galveston Area Council, which does much of the transportation planning for the area, has not finalized its plan for projects in the next fiscal year or the next five to 10-year planning period, David Wurdlow, transportation program manager at the Houston-Galveston Area Council, said. 

Two major projects within the county likely to advance in the next few years are Interstate 45 improvements and extending FM 646 between FM 1764 and state Highway 6, local planners said. 

Boosts in funding, including Proposition 7, would speed up construction on such projects and allow the area to advance on other project to alleviate traffic congestion, planners said.

“Even with Proposition 7 we’re not going to be able to get everything we want done. But it would advance some projects and speed things up,” Wurdlow said.

Contact reporter Marissa Barnett at 409-683-5257 or

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