TEXAS UNDERUTILIZES MOTOR FUEL TAX, DESIGN-BUILD PROCESS
Texans are generally eager for traffic congestion solutions. But a recent legal opinion on toll roads has left some feeling unenthused.
At issue is whether the Texas Transportation Commission can use money that voters dedicated to the State Highway Fund for projects that have both tolled and nontolled elements. The act of comingling voter-approved funds with toll road projects raises a difficult question.
Seeking to clarify things, a top lawmaker late last year asked the Texas attorney general to determine if the practice was permissible. The AG’s office came back with an answer earlier this month, but it was somewhat inconclusive.
While officials reaffirmed that the Texas Constitution prohibits using dedicated funding for toll roads themselves, they weren’t quite sure about the nontolled element. “The absence of a definition of ‘toll road’ in the constitutional provisions, statutes or case law leaves us unable to determine whether the [Texas Transportation] Commission may use Proposition 1 and Proposition 7 monies on nontolled portions of toll projects,” said the agency.
As such, the practice exists in a sort of gray area, and projects are likely to proceed, albeit cautiously. But the issue begs for clarity and lawmakers will need to weigh in next session. That’s fine, because there are a few other transportation tools that need fixing as well.
Take the motor fuels tax problem, for example.
Every time a commuter fills up his or her car with gasoline or diesel fuel, that person pays a state tax of 0.20¢ per gallon. Logic dictates that those particular tax dollars should be spent on road construction and the like — but the fact is that a good chunk are diverted elsewhere.
For several decades, a provision in the Texas Constitution has dedicated one-fourth of the motor fuels tax to the Available School Fund (ASF), a fund setup to support public education. Hence, 25 percent of the taxes that you pay at the pump go to help fund K-12 activities — even though there’s no direct relationship there, and plenty of other sources available for schools.
What do this diversion look like in dollar terms? In fiscal year 2017 alone, the ASF received $873 million in motor fuels tax revenues. Since 2010, the amount of transportation tax dollars diverted into the public education has grown to a staggering $6.5 billion.
Allowing this diversion to persist is not sound policy. And while no one is arguing that funding for public education shouldn’t be a priority, it’s not transparent or reasonable to siphon away tax dollars earmarked for one purpose so that they can be spent on another.
Another potential problem to address involves the use of the design-build process for large projects, or lack thereof.
The more traditional approach to building a road or a bridge is for a government official or a contractor to design it first and then request other contractors to submit their bids to build the design. But there’s a better, more efficient way to get the job done.
Under the design-build process, the same contractor is assigned the dual task of designing and building the project. This has the benefit of both streamlining the process and minimizing future costs incurred via change orders.
The process has a solid track record, too. It’s been shown to generally reduce costs over traditional contracting by as much as 29 percent while decreasing project completion times by an average of 14 percent.
To its credit, the Texas Department of Transportation already uses the design-build process in a limited fashion. But the agency, taxpayers and commuters could all benefit from a robust implementation.
The next Texas Legislature has a golden opportunity to tweak some of these transportation finance-related tool and maximize the amount of available funding for highways, roads and other needed infrastructure. That’s especially important in light of how many people, goods and businesses are pouring into the Lone Star State every day.
All that’s needed now are the sound policy prescriptions to keep Texas moving in the right direction.