Legislators Considering Compromise Road Plan

Updated, July 26, 3:30 p.m.: 

Members of the House sent a new proposal to the Senate on Friday afternoon that could pave the way for a compromise on transportation funding, according to sources close to the negotiations.

The proposal would partly mirror the Senate plan, asking voters to approve a constitutional amendment that would divert half of the future oil and gas production taxes currently earmarked for the Rainy Day Fund into the state's highway fund.

The key difference in the plan would be on the issue of including a so-called floor on the Rainy Day Fund. The Senate plan would place a provision in the state Constitution that would block the diversion whenever the fund's balance falls below $6 billion. A majority of House members opposed including that provision in the Constitution.

The latest House proposal would give the Legislative Budget Board the option of setting a floor for the Rainy Day Fund. The authority would be placed in state law rather than in the Constitution, sources close to the negotiations say.

Under the new proposal, the constitutional amendment election would be held in November of 2014 instead of this year. Estimates indicate it would raise $845 million for the Texas Department of Transportation in the 2015 fiscal year.

Sen. Kevin Eltife, R-Tyler, said senators were still reviewing the proposal and were giving it a serious look.

Original story:

Both chambers of the Legislature were filled with activity Thursday afternoon, but they ended up essentially where they had started: waiting on House and Senate negotiators to come up with a transportation funding plan most lawmakers could agree on.

There was little sign Thursday that the two chambers were any closer to finding common ground, even though Gov. Rick Perry has vowed to call them back for a third special session if they can’t get around the current impasse.

A majority of members in both chambers favor taking advantage of a spike in tax revenue from the ongoing oil drilling boom to boost funding for the Texas Department of Transportation. They remain divided on how exactly to use that tax revenue, currently earmarked for the Rainy Day Fund, and whether fears that that fund’s future balance may drop below a certain level need to be addressed.

“As you may have seen in the news, like any negotiation, this one has had its ups and downs,” House Speaker Joe Straus, R-San Antonio, told the chamber Thursday afternoon.

The House adjourned until Monday, suggesting negotiations could stretch into the weekend. Earlier in the day, Lt. Gov. David Dewhurst said he hoped Senators could be done by Friday.

“Based on conversations with our Senate conferees on the transportation bill, I am advised that we have had good discussions with the House members this week, but still have a couple of unresolved issues, which I am confident we can fix,” Dewhurst said in a statement. “After all, the substance of all the terms being considered by the working group have previously been voted on and passed out of the House chamber.”

Dewhurst was referring to the first special session, which ended last month with a transportation funding plan dying in the Senate as part of the collateral damage in the fight to pass abortion-related legislation. Though 105 members of the House approved the transportation measure then, leaders in that chamber opted for a different approach in this second special session.

The Senate has continued to back a close cousin of the plan they offered last month, which would divert some oil and gas production taxes to the state’s highway fund.

The current House plan is more complicated. Along with adding nearly $1 billion a year to the state’s highway fund, the House plan would end a long-standing diversion of a nickel of the state’s 20-cent-per-gallon gas tax to Texas public schools. The money currently earmarked for the Rainy Day Fund would ensure that education funding levels are not affected by the shifting of three different revenue streams.

Along with disagreements on whether education funding should be involved in the measure sent to voters, the two chambers also differ on the need for language protecting the Rainy Day Fund’s balance. The Senate plan would block the diversion of tax revenue from the Rainy Day Fund if the fund’s balance falls below $6 billion. House Democrats and some Republicans argue that such a provision would hamstring lawmakers’ ability to address the state’s vital needs.

Both measures would generate less than $1 billion to TxDOT, far short of the $4 billion in extra funding the agency has said it needs each year to maintain current congestion levels. Straus hinted at the larger problem Thursday while addressing the House.

“I appreciate all the hard work and suggestions from each House member on this problem, which begins to resolve only one-fourth of the transportation needs of our state,” Straus said.

Any potential compromise measure will end up in House Joint Resolution 2 and House Bill 16. Both chambers took the parliamentary maneuvers necessary on Thursday to insert an agreed-upon plan in those two pieces of legislation.

In the Senate, Dewhurst picked Senate Transportation Chairman Robert Nichols, R-Jacksonville; and Kevin Eltife, R-Tyler; Juan "Chuy" Hinojosa, D-McAllen; John Whitmire, D-Houston; and Tommy Williams, R-The Woodlands, to lead negotiations on both measures.

In the House, Straus tapped state Rep. Joe Pickett, D-El Paso; Linda Harper-Brown, R-Irving; John Otto, R-Dayton; Lyle Larson, R-San Antonio; and Senfronia Thompson, D-Houston to negotiate HB 16. For HJR 2, he selected House Transportation Chairman Larry Phillips, R-Sherman; and state Reps. Drew Darby, R-San Angelo; Charlie Geren, R-Fort Worth; Sylvester Turner, D-Houston; and Pickett.