Transportation Funding Plans in Texas, Massachusetts Still Face Hurdles After Passage

For supporters of increasing state funding for transportation, 2013 has been a busy year and there have been plenty of hard won victories across the country. None were perhaps more difficult than the ones achieved this summer in Massachusetts and Texas. But the road ahead for both states is still far from certain and even if the funding solutions come to pass as their supporters intend, the adequacy of those solutions is still very much in question.

Texas: A Day Late, A Few Billion Short, A Hard Sell Still Ahead

In the Lone Star State, it took a regular session and three special sessions of the state legislature for lawmakers to finally approve a transportation bill that ultimately punts the decision on new funding to Texas voters. The legislature adjourned its third special session Monday night after passing the measure, which would let voters decide in November 2014 whether to divert oil and natural gas tax revenue from a reserve account to increase transportation funding by about $1.2 billion in 2015.

Lawmakers avoided raising taxes or fees, which Gov. Rick Perry and many legislators opposed. They also avoided taking a difficult vote and will now leave the heavy lifting to others to make the case for the constitutional amendment ballot measure that would make the diversion possible in the months ahead.

While the victory was hard won and not yet even certain to fly with Texas voters, it also fell short of what the Texas Department of Transportation has said is needed just to maintain current congestion levels on Texas roads as the state’s population continues to grow. TxDOT has estimated more than $4 billion more is needed annually. The state currently spends about $10 billion annually on transportation.

Republican state Senator Robert Nichols called the proposed spending of this rainy day reserve fund a “Band-Aid.” “Everyone knows this is not a long-term fix,” he said before the bill passed, according to Bloomberg. Nichols had wanted taxes on the sales of cars to be used for roads but other lawmakers objected, arguing such a plan would take money away from schools.

Business groups had sought a $30 increase in annual vehicle registration fees, which would have raised more than $600 million annually, but the measure was opposed by Perry. The governor had expressed support for tapping state reserves, redirecting some vehicle sales tax collections and issuing bonds to help the state spend $41 billion over the next 20 years.

The plan approved by lawmakers would require them to vote in 2025 whether to continue the diversion of the oil and natural gas tax revenues. The legislature would also have to vote every two years to set a minimum balance for the rainy day fund. The plan also requires TxDOT to find $100 million in efficiencies over the 2014-15 biennium and put that toward paying off agency debts, The Texas Tribune reported.    

Massachusetts: One Step Forward, Future Uncertainty

The $800 million transportation bill passed in the Bay State last month was also long in the works and required the override of Gov. Deval Patrick’s veto to take effect. It contained a three cent-a-gallon gas tax hike, would index future increases in the tax to inflation, would raise the cigarette tax $1 per pack and would impose the state sales tax on computer software and services. In all, the bill called for $500 million in new taxes this fiscal year and about $800 million by 2018, according to the Associated Press.   

Patrick had vetoed the bill after lawmakers rejected his proposed amendment to increase the gas tax further if tolls on the western portion of the Massachusetts Turnpike come down as scheduled in 2017, when the debt is paid off on that portion of the road. Ending the tolls would mean $170 million in lost revenue for the state (TollroadsNews had a piece last week on the history of the Turnpike tolls). But Democrats in the legislature say the governor exaggerated the likelihood that the toll revenue will disappear and say there is little political will to end the turnpike tolls, The Boston Globe reported. Lawmakers also felt that now was the time to take action and any revenue shortfalls in the plan could be addressed in the future.

The package ultimately approved by the veto override doesn’t come close to the plan Patrick proposed in his State of the Commonwealth address in January, WBUR noted. Patrick had wanted to increase the income tax by 1 percentage point and expand taxes and fees by nearly $2 billion over time to allow massive new investments in both transportation and education.

Transportation advocates, while cheering for the hundreds of millions the approved plan will produce, say it only goes part way in addressing state transportation needs. They’re already reportedly gearing up for another go at additional transportation revenues, most likely in 2015.

But this week came word that a group of Republican state lawmakers and activists are hoping to place a measure on the 2014 ballot that would repeal the legislation’s provision to allow the inflation-indexed gas tax increases, which are scheduled to start in 2015, The Boston Globe reported. The activists would need to gather 68,911 voter signatures by November to get it on the 2014 ballot. As the three cent gas tax increase kicked in last week, Republican lawmakers joined a protest rally at a Dorchester gas station, The Globe reported.   

More State Transportation Funding Updates

  • Maryland: Gov. Martin O’Malley this week officially announced that the state will pursue delivery of the $2.15 billion Purple Line light rail project through Montgomery and Prince George’s counties as a public-private partnership (P3). As I previously reported, Lt. Gov. Anthony Brown let the cat out of the bag in June at the InfraAmericas conference in New York. In addition to passing expanded P3 legislation this year, Maryland’s General Assembly also approved a gas tax increase. The Washington Post reported last month on how Maryland’s new Secretary of Transportation, James Smith, is evaluating how to use the new gas tax funds.
  • Pennsylvania: Transportation Secretary Barry Schoch was talking last month in interviews, hearings and newspaper op-eds about the impact of the state legislature failing to pass a $2.5 billion transportation funding plan before leaving Harrisburg for its summer recess. “The loss of 12,000 good-paying jobs in the construction industry is a very real consequence of the legislature’s inaction on transportation funding,” he wrote in The Patriot-News. “Another is the missed opportunity to create 50,000 new jobs from the construction and repair that would have followed a transportation bill. And more ominously, we are faced with placing weight and traffic restrictions on as many as 1,200 bridges around the state.”
  • Utah: The Salt Lake Tribune reported last month on how a coalition of local officials and business interests appears to be coming together in support of increasing taxes for roads and mass transit despite the economic and political concerns of some legislators about making such a move.