There’s talk in the Texas Legislature of raising the state’s fuel tax — and one of the lawmakers doing the talking is Killeen’s state Rep. Jimmie Don Aycock.
Even though raising the price of gasoline is a politically unpopular subject, Aycock is being a realist. Without an increase in revenue, the Texas Department of Transportation will be hampered in its ability to fund new road projects. As it is, TxDOT is reportedly $13 billion in debt.
That debt increases whenever the department constructs projects using pass-through financing, in which cities put up the money to get projects built, and the state then reimburses a portion of the project cost to the community over time by paying a fee for each vehicle that drives on the new highway.
In Killeen, both the State Highway 195 / State Highway 201 overpass and the Rosewood Extension projects are being financed using pass-through funding.
And with more than $150 million in TxDOT road projects on the books for Killeen over the next decade, it’s obvious that finding more revenue statewide must be a priority.
But is a hike in the state’s gas tax the best solution?
At present, Texans pay 20 cents in state fuel taxes per gallon of gas — a rate that has been unchanged for 22 years. That puts Texas in the middle of the pack, well above Alaska’s 8 cents per gallon but far below New York’s 51.2 cents. Texans also pay an 18.4-cent federal gas tax, making 38.4 cents in total fuel taxes per gallon.
A Republican state lawmaker, Rep. Kevin Eltife of Tyler, has proposed raising the state’s gas tax by at least a dime, though he has not authored any legislation in that regard.
Increasing the gas tax is equitable, since Texans who drive the most would pay the most in taxes. But raising the tax significantly would adversely impact individuals who must travel long distances for school or work, as well as businesses that are dependent on transportation.
Still, without some sort of revenue boost, the state will lack the money to build and maintain its highways. Several approaches have already been attempted, including building more toll roads and hiking transport fees.
Ultimately, a combination of funding sources are likely to be tapped to help address the revenue shortfall, including increases in registration and other fees, Aycock noted.
None of them are likely to be popular, but they all may be necessary. The state’s population is increasing at a rapid clip — a healthy 3.6 percent between April 2010 and July 2012. Consequently, the number of motorists is bound to increase accordingly. That’s a boon to tax revenue but also an added strain on nearly 80,000 miles of state-maintained roads.
However, no matter how serious the need, it would be ill-advised to consider pushing for a state fuel tax increase anytime soon. With the current sequestration crisis threatening area residents with lost jobs, reduced hours and diminished services, an increase in the price of gas would be a further, unnecessary hardship.
Fortunately, Aycock doesn’t believe a measure to raise the tax will come out of the current legislative session. Still, the subject is on the table.
For the short term, Texas lawmakers should focus on shoring up the state’s transportation revenue without a tax increase. One way would be to adopt legislation that would dedicate 100 percent of all state fuel tax revenues to transportation-related projects. At present, more than 40 percent of the revenue is diverted to other areas, including 24 percent to fund public schools — which should have their own dependable funding source.
Another way to maximize funding would be to push the state’s congressional representatives to seek a better return on Texas’ federal fuel tax proceeds.
According to 2009 figures from the U.S. Department of Transportation, Texas received just 83.5 percent of what it paid in federal fuel taxes. That’s based on a federal formula that gives revenue from some “donor” states and reapportions it to other, generally less populous states.
The 16.5 percent of Texas’ federal tax revenue that went somewhere else amounted to about $672 million in 2009. If Texas’ Washington contingent could help keep just 5 percent more of the state’s federal tax revenue at home, it would mean at least an additional $205 million.
Aycock is correct when he notes that more fuel-efficient cars and increasing construction costs make it impossible to fund transportation the way the state did in the past.
No doubt, some hard choices will need to be made in identifying new revenue streams.
But targeting the state’s motorists first is the wrong road to go down.