Abbott Plans to Add $4 Billion to Road Funding

Gov.-elect Greg Abbott has set himself a tall order for his first legislative session: nearly closing the Texas Department of Transportation’s $5 billion annual budget shortfall.

“I’ve outlined a detailed plan that will ensure that we add $4 billion more per year for building roads in this state without raising taxes, fees or tolls,” Abbott said at a press conference Monday.

Abbott's aspirations reflect strong interest by lawmakers to boost funding for road construction and maintenance. TxDOT has said it needs $5 billion more each year to keep traffic from getting worse in a fast-growing state.

Finding even $4 billion more each year will be tricky, but voters have already helped Abbott get partway to his goal. Abbott's office confirmed Monday that his count includes funds from Proposition 1, a measure approved by 80 percent of Texas voters last month to divert some oil and gas production tax revenue to the highway fund. The Legislature voted in 2013 to put the measure to voters.

TxDOT officials have said they expect the first cash transfer of $1.7 billion to occur before the end of the year. But the amount Proposition 1 generates for highways will be a perpetually moving target, ebbing and flowing with oil and gas production and prices. Recent drops in oil prices have raised concerns that future payouts may be lower than originally expected.

“That certainly leaves some doubt out there of what resources are going to be available,” TxDOT Executive Director Joe Weber said Monday. “We’re going to have to watch that very, very closely,”

Abbott expects to find more of his $4 billion target by dedicating most of the sales taxes collected on vehicle sales to road construction and maintenance. That revenue stream now flows into the state’s general revenue fund, where the Legislature has a shot at spending it. Under Abbott’s proposal, two-thirds of the sales tax collected, or more than $2 billion a year, would be re-routed to the highway fund.

Several lawmakers have already filed bills proposing the sales tax diversion, though some Democrats are approaching them with caution.

“The devil is always in the details,” state Rep. Trey Martinez Fischer, D-San Antonio, said in October. “We know that we have a finite amount of money in our general revenue system. We have a tremendous amount of needs. We’re not going to take money from one bucket to fund something else if we’re not going to improve the livelihood of all Texans.”

The third prong of Abbott's approach is to make sure more of the gasoline taxes Texans pay go to road construction and maintenance, though there may not be much money to tap there. Currently, 83 percent of the $10.9 billion in the state’s highway account goes to TxDOT. The bulk of the remainder, $812 million, goes to the Department of Public Safety. Abbott’s office doesn’t have plans to touch that portion, according to spokeswoman Amelia Chasse.

“Greg Abbott’s transportation plan keeps State Highway Fund appropriations in place for daily DPS operations, which pertain directly to policing Texas roads,” Chasse said Monday.

Weber said he was staying out of the debate over how to raise more money for roads, but expressed hope that lawmakers will find a way to close the agency’s shortfall for good next year.

“For me the real challenge is for the Legislature to come up with a permanent and consistent source of funding,” Weber said.