Traffic-Tied Texans Tap Oil and Gas Taxes for Transportation

Voters approved a constitutional amendment to increase transportation spending.
by | November 4, 2014

Texas voters approved an amendment Tuesday to increase state transportation spending by $1.2 billion to $1.7 billion a year.

The measure, called Proposition 1, passed overwhelmingly, with 80 percent of voters supporting the measure late Tuesday night.

There was no organized opposition to the proposal, but supporters hope that kind of lopsided victory will persuade Greg Abbott, Texas’ new governor-elect, and the state legislature to find even more money for transportation in the legislative session early next year. They say the ballot measure only covers a small part of the state’s transportation needs.

But Proposition 1 is a relatively painless way to increase transportation funding in the meantime. It will divert half of the state's oil and gas tax revenue that now goes into the its rainy day funds toward road improvements instead.

The amendment comes in response to two major forces in Texas’ economy: an oil and gas boom and increasingly congested roads.

Hydraulic fracturing, or “fracking,” unlocked petroleum deposits across the state, and oil production has doubled since 2010. That has led to an i tax revenues for the state, which has used some of the money for schools but the rest to deposit into its Economic Stabilization Fund.

The reserve fund had $6.2 billion at the end of June 2013 and, even with the ballot measure, it's expected to grow to nearly $8.4 billion by next June.

As Texas has added jobs and people, though, its transportation network has strained to keep up.

The state's population has more than doubled in the last 40 years, and the number of vehicles has tripled. But, according to Texas A&M University, the state's road capacity has only grown 19 percent in that time.

The additional cost of keeping the road network in good enough shape to maintain the current levels of congestion, according to state transportation officials, would be $5 billion a year. That includes $3 billion for new capacity, $1 billion to upgrade roads to handle heavy loads from the oil and gas boom and $1 billion for maintenance.

Toll roads in the state have proliferated since Republican Gov. Rick Perry took office in 2000. More than two dozen are in use now, and several more are planned.

But there are signs that Texans are souring on the heavy reliance on toll roads. The state Republican Party softened its support of toll roads in its party platform, and a Texas A&M Transportation Institute poll in September found that toll roads were the least popular option for relieving traffic congestion among voters in both urban and rural areas.