Texas Transportation Funding Amendment, Proposition 1 (2014)

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Proposition 1
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Type:Constitutional amendment
Constitution:Texas Constitution
Referred by:Texas State Legislature
Topic:Transportation
Status:Approved Approveda
The Texas Transportation Funding Amendment, Proposition 1 was on the November 4, 2014 general election ballot in the state of Texas as a legislatively-referred constitutional amendment, where it was approved.

The measure diverted half of the general revenue derived from oil and gas taxes from the Economic Stabilization Fund (ESF), also known as the Rainy Day Fund, to the State Highway Fund for the purpose of providing transportation funding for repairs and maintenance of public roads. It was anticipated that this would result in approximately $1.2 billion per year going toward transportation funding instead of the Rainy Day Fund. The measure will take effect immediately, once the votes were certified, and will apply to transfers the comptroller made after September 1, 2014.[1][2][3]

Election results

Below are the official, certified election results:

Texas Proposition 1
ResultVotesPercentage
Approveda Yes 3,213,483 79.86%
No810,38220.13%

Election results via: Texas Secretary of State Office

Text of measure

Ballot title

The official ballot title was as follows:[4]

The constitutional amendment providing for the use and dedication of certain money transferred to the state highway fund to assist in the completion of transportation construction, maintenance, and rehabilitation projects, not to include toll roads.[5]

Ballot language

The text of the measure appeared on the ballot as follows:[6]

TX2014measuretext.png

Constitutional changes

The ballot measure amended Section 49 of Article III of the Texas Constitution as follows, with the underlined text added and the stricken text removed:[7]

A JOINT RESOLUTION proposing a constitutional amendment to provide for the transfer of certain general revenue to the economic stabilization fund and to the state highway fund and for the dedication of the revenue transferred to the state highway fund.

BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 49-g, Article III, Texas Constitution, is amended by amending Subsections (c), (d), and (e) and adding Subsections (c-1) and (c-2) to read as follows:

(c) Not later than the 90th day of each fiscal year, the comptroller of public accounts shall transfer from the general revenue fund to the economic stabilization fund and the state highway fund the sum of the amounts described [prescribed] by Subsections (d) and (e) of this section, to be allocated as provided by Subsections (c-1) and (c-2) of this section. However, if necessary and notwithstanding the allocations prescribed by Subsections (c-1) and (c-2) of this section, the comptroller shall reduce proportionately the amounts described by Subsections (d) and (e) of this section to be transferred and allocated to the economic stabilization fund to prevent the amount in that [the] fund from exceeding the limit in effect for that biennium under Subsection (g) of this section. Revenue transferred to the state highway fund under this subsection may be used only for constructing, maintaining, and acquiring rights-of-way for public roadways other than toll roads.
(c-1) Of the sum of the amounts described by Subsections (d) and (e) of this section and required to be transferred from the general revenue fund under Subsection (c) of this section, the comptroller shall allocate one-half to the economic stabilization fund and the remainder to the state highway fund, except as provided by Subsection (c-2) of this section.
(c-2) The legislature by general law shall provide for a procedure by which the allocation of the sum of the amounts described by Subsections (d) and (e) of this section may be adjusted to provide for a transfer to the economic stabilization fund of an amount greater than the allocation provided for under Subsection (c-1) of this section with the remainder of that sum, if any, allocated for transfer to the state highway fund. The allocation made as provided by that general law is binding on the comptroller for the purposes of the transfers required by Subsection (c) of this section.
(d) If in the preceding year the state received from oil production taxes a net amount greater than the net amount of oil production taxes received by the state in the fiscal year ending August 31, 1987, the comptroller shall transfer under Subsection (c) of this section and allocate in accordance with Subsections (c-1) and (c-2) of this section [to the economic stabilization fund] an amount equal to 75 percent of the difference between those amounts. The comptroller shall retain the remaining 25 percent of the difference as general revenue. In computing the net amount of oil production taxes received, the comptroller may not consider refunds paid as a result of oil overcharge litigation.
(e) If in the preceding year the state received from gas production taxes a net amount greater than the net amount of gas production taxes received by the state in the fiscal year ending August 31, 1987, the comptroller shall transfer under Subsection (c) of this section and allocate in accordance with Subsections (c-1) and (c-2) of this section [to the economic stabilization fund] an amount equal to 75 percent of the difference between those amounts. The comptroller shall retain the remaining 25 percent of the difference as general revenue. For the purposes of this subsection, the comptroller shall adjust the [his] computation of revenues to reflect only 12 months of collection.
SECTION 2. The following temporary provision is added to the Texas Constitution:
TEMPORARY PROVISION. (a) This temporary provision applies to the constitutional amendment proposed by the 83rd Legislature, 3rd Called Session, 2013, to provide for the transfer of certain general revenue to the economic stabilization fund and to the state highway fund and for the dedication of the revenue transferred to the state highway fund.
(b) The amendment to Section 49-g, Article III, of this constitution takes effect immediately on the final canvass of the election on the amendment. If, between September 1, 2014, and the effective date of that constitutional amendment, the comptroller of public accounts has transferred from general revenue to the economic stabilization fund amounts in accordance with Subsections (c), (d), and (e) of that section, as those subsections existed at the time of the transfer, as soon as practicable after the effective date of the amendment, the comptroller shall return the transferred amounts from the economic stabilization fund to general revenue and transfer from general revenue to the economic stabilization fund and the state highway fund amounts in accordance with the amended provisions and in accordance with general law, notwithstanding the requirement of Subsection (c) of that section that the transfers for that fiscal year be made before the 90th day of the fiscal year beginning September 1, 2014.

(c) This temporary provision expires January 1, 2017.

SECTION 3. This proposed constitutional amendment shall be submitted to the voters at an election to be held November 4, 2014. The ballot shall be printed to permit voting for or against the proposition: "The constitutional amendment providing for the use and dedication of certain money transferred to the state highway fund to assist in the completion of transportation construction, maintenance, and rehabilitation projects, not to include toll roads."[5]


Background

See also: Texas state budget

Rainy Day Fund

The Economic Stabilization Fund (ESF), colloquially referred to as the Rainy Day Fund, was established by voters in 1988. At the time of Proposition 1's approval, the fund allowed the state to save money and allocate excess revenue that could be used during times of financial stress. It could assist in balancing the budget, safeguard against unexpected economic downturns and prevent the state from slipping into a deficit. Each year, the fund received revenue from 75 percent of any oil and gas production taxes that are greater than the amount collected in fiscal year 1987. It also received half of any balance remaining in the general revenue fund at the end of a fiscal biennium.[8][3]

State Highway Fund

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At of the time of Amendment 1's approval, the State Highway Fund, also known as Fund 6, financed highway needs by gathering revenue from federal reimbursements, state motor fuel taxes, vehicle registration fees and other general fees.[3] It has been estimated that the State Highway Fund will receive approximately $1.2 billion annually from oil and gas taxes formerly appropriated to the Rainy Day Fund. However, Proposition 1 may not be a complete solution, as the transportation agency requires at least an additional $4 billion per year.[9]

Enabling legislation

Proposition 1 was placed on the ballot via SJR 1. However, House Bill 1 was the enabling legislation for SJR 1. Enabling legislation is a bill passed into law by the Texas Legislature that authorizes an exemption for prior contracts or bids.[10] The goal of HB 1 was to protect the Rainy Day Fund by implementing a committee that is tasked with determining a "minimum balance" that must be maintained within the fund before any money can be allocated to roads and transportation funding. This proposed minimum balance must then be agreed upon by two-thirds of the Texas Legislature. If this proves to be impossible, the number proposed by the committee will be used. Under HB 1, the Texas Department of Transportation must identify $100 million worth of savings within the department to apply towards its debt. Read more about enabling legislation here.[9]

Support

Supporters

The group Move Texas Forward supported the measure.[11] The measure was sponsored in the legislature by Rep. Joe Pickett (D-79) and Sen. Robert Nichols (R-3).[12][13]

Officials

The following public officials supported Proposition 1:[14]

  • Judge Ed Emmett – Harris
  • Judge Clay Jenkins – Dallas
  • Judge Glen Whitley – Tarrant
  • Judge Mark Allen – Jasper
  • Judge W.J. Bang, M.D. – Reeves
  • Judge Darrell Cockerham – Hood
  • Judge Dan A. Gattis – Williamson
  • Judge Jerry Hogan – Rockwall
  • Judge Larry Isom – Reagan
  • Judge Danny Pierce – Walker
  • Judge Alan B. Sadler – Montgomery
  • Judge Bill Stoudt – Gregg
  • Judge Penny Golightly – Floyd
  • Judge Robert E. Hebert – Fort Bend
  • Judge Mary Horn – Denton County
  • Judge Glenn Hughes – Wise
  • Judge Craig McNair – Liberty
  • Judge Loyd Neal – Nueces
  • Judge Souli A. Shanklin – Edwards
  • Judge Nelson Wolff – Bexar
  • Judge Fritz Faulkner – San Jacinto
  • Judge Joe King – Brazoria
  • Mayor Mike Rawlings – Dallas
  • Mayor Annise Parker – Houston
  • Mayor Ron Jensen – Grand Prairie
  • Mayor Betsy Price – Fort Worth
  • Mayor Larry Martinez – Alice
  • Mayor Nelda Martinez- Corpus Christi
  • Mayor Robert N. Cluck, M.D. – Arlington
  • Mayor James A. Thompson – Sugar Land
  • Mayor Sam Fugate – Kingsville
  • Mayor Alan Hooks – Blue Mound
  • Mayor Oscar Trevino – North Richland Hills
  • Mayor Carl Sherman - DeSoto
  • Mayor Brian Johnson – Kennedale

Organizations

The following organizations and groups supported Proposition 1:[15]

  • South Texans' Property Rights Association
  • Regional Transportation Council
  • Texas Forestry Association
  • Tarrant Regional Transportation Coalition
  • Dallas Regional Mobility Coalition
  • Alvin-Manvel Area Chamber of Commerce
  • Bay City Chamber of Commerce
  • Texas Sheep and Goat Raisers Association
  • McKinney Chamber of Commerce
  • Earthmoving Contractors Association of Texas
  • Texas Poultry Federation and Affiliates
  • Oak Cliff Chamber of Commerce
  • San Antonio Mobility Coalition
  • Central Texas Regional Mobility Authority
  • American Society of Civil Engineers, Texas Section
  • Frisco Chamber of Commerce
  • Dalhart Area Chamber of Commerce
  • Texas Retailers Association
  • Texas Independent Producers & Royalty Owners Association
  • Bryan/College Station Chamber of Commerce
  • Dallas Region Chamber of Commerce
  • Arlington Chamber of Commerce
  • Fort Bend County
  • Rio Grande Valle Chamber of Commerce
  • Real East Texas Longview Chamber of Commerce
  • Fort Worth Chamber of Commerce
  • North Dallas Chamber of Commerce
  • Transportation Advocacy Group Houston Region
  • Texas Travel Industry Association
  • Texas Food & Fuel Association
  • Texas Association of Manufacturers
  • Transportation Advocates of Texas
  • Texas Trucking Association
  • Texas Oil & Gas Association
  • Texas Infrastructure Now
  • Texas Economic Development Council
  • Texas Association of Business
  • Texas Association of Builders
  • Ports-to-Plains Alliance
  • Mission Economic Development Corporation
  • Keep Texas Working
  • Greater San Marcos Partnership
  • Greater Irving-Las Colinas Chamber of Commerce
  • Associated General Contractors of Texas
  • American Council of Engineering Companies of Texas

Arguments

The House Research Organization published a focus report examining Proposition 1. The following are excerpts from the report detailing arguments in support of the measure:[3]

  • Proposition 1, in combination with its enabling legislation, HB 1 by Pickett, would take a key step toward securing critical funding for transportation projects in Texas. While far from a cure-all, the proposed resolution would present a viable means to secure a portion of the funding Texas needs to maintain roadway congestion at current levels, given population and economic growth.
  • Proposition 1 would dedicate an additional, much-needed funding stream to constructing and maintaining public, non-tolled roads. If approved, the amendment would represent a departure from relying on debt and toll roads as primary mechanisms for funding highways.
  • While Proposition 1 would authorize a dedicated funding stream for transportation projects, it also would allow the Legislature to take necessary means to ensure a minimum balance in the rainy day fund was available to respond to natural disasters and fiscal emergencies. HB 1, the amendment’s enabling legislation, calls for the appointment of a House Research Organization Page 3 committee of legislators to determine a sufficient balance for the rainy day fund under which no general revenue would be transferred to Fund 6.
  • Proposition 1, in combination with HB 1, would provide an assurance that a sufficient balance remained in the rainy day fund, while granting each Legislature license to address the needs of the time.
  • Contrary to claims otherwise, dedicating a revenue stream for key transportation infrastructure would help the state retain its strong credit rating. Instead of insisting on a particular number or percentage in reserve, credit rating bureaus look for a balance between maintaining a healthy amount in reserve for unexpected events and using reserve funds for critical needs such as infrastructure and water. Proposition 1 would strike this balance by appropriating funds for transportation only when there was a legislatively determined substantial balance in reserve for emergencies.[5]

—House Research Organization, [3]

The Texas Legislative Council published a voter's guide on Proposition 1. The guide detailed arguments in support and opposition of the measure. The supporting arguments were as follows:[16]

Comments by Supporters. A marked need for additional transportation funding has been created by a number of factors, including the growth of the state's population and economy and the attendant increase in the number of vehicle miles driven on public roadways; erosion in the relative value of the state gasoline tax as a result of inflation and improvements in vehicle fuel economy; maintenance requirements of an aging highway system; and the added strains placed on public roadways by increased oil and gas exploration and production. The funding mechanism set out by the proposed amendment and its enabling legislation will result in a steady stream of additional highway money that could be used for long-term planning by transportation administrators.

The funding mechanism affects only deposits to the economic stabilization fund; it does not raise taxes or fees and has no effect on money coming out of the fund. With the proposed amendment's passage, the economic stabilization fund will still have a robust balance despite recent appropriations from the fund and anticipated future appropriations. Furthermore, the funding mechanism gives legislators a voice in its operation and provides what is effectively a 10-year expiration date if the process does not meet expectations.

—Texas Legislative Council

SJR 1 "Yes" votes

The following members of the Texas Legislature voted in favor of placing Proposition 1 on the ballot.[17][18]

Note: A yes vote on SJR 1 merely referred the question to voters and did not necessarily mean these legislators approved of the stipulations laid out in Proposition 1.

Senate

House

Opposition

Arguments

Texas Constitution
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Preamble
Articles
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3 (1-43)3 (44-49)3 (50-67)
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The House Research Organization published a focus report examining Proposition 1. The following are excerpts from the report detailing arguments against the measure:[3]

  • Proposition 1 would not provide a solution to the state’s serious, ongoing highway funding shortage and would not adequately safeguard emergency reserves in the rainy day fund.
  • Because the proposed amendment would not authorize the collection of any additional revenue, in effect it would take money out of one fiscal pocket and move it to another. Proposition 1 would reduce the amount of general revenue flowing into the rainy day fund by dedicating it to transportation. While this might not cause problems in times of plenty, it could create a dilemma during a lean period.
  • Proposition 1 would provide no guarantee of a minimum balance in the rainy day fund before authorizing a transfer of funds to Fund 6. The amendment relegates this authority to each legislature, which is inevitably subject to the whims and political vagaries of any given legislative session.
  • The proposed amendment would dedicate funds to transportation that otherwise could be available to support other priorities. The state has pressing needs in many areas, including public education, and dedicating funds as prescribed by Proposition 1 would elevate needs in transportation above all others.
  • A large balance in the rainy day fund has been a great asset to the state, helping it retain a strong credit rating through the recession. Any measure that reduced the state’s savings account could directly or indirectly harm its credit rating down the road by leaving less revenue in reserve for emergencies.
  • Proposition 1 could create the impression among the general public that this measure would be a remedy for the state’s transportation funding woes. In truth, even with approval of Proposition 1, the state still faces a $4 billion gap in transportation funding.
  • Establishing a legislatively determined sufficient balance would mean that transportation planners could not count on receiving additional funds more than a year or two into the future because the receipt of those funds would depend on unpredictable factors, such as legislative appropriations for emergencies. As currently drafted, Proposition 1 would create a dedicated but not a reliable source of funding for transportation.[5]

—House Research Organization, [3]

The Texas Legislative Council published a voter's guide on Proposition 1. The guide detailed arguments in support and opposition of the measure. The opposing arguments were as follows:[16]

Comments by Opponents. Funding transportation is a key component of state government's complex appropriations process and, rather than being delegated to the voters through the proposed amendment, should be treated like any other part of that process.

While there may be widespread agreement that the state must find additional funding for its many current and future transportation needs, oil and gas production taxes are a volatile revenue stream that should not be considered as part of a long-term solution to transportation funding. In addition, the amount of funds that would be allocated to the state highway fund under the procedures contemplated by the proposed amendment and its enabling legislation constitute only approximately one-quarter of the funds that are needed to keep up with an increasing demand for transportation funding.[5]

—Texas Legislative Council

Other arguments against Prop 1 included:

  • Legislators should be funding roads via existing funds, not with revenues that normally go toward the state’s emergency fund, particularly since lawmakers just placed an amendment, Proposition 6, to raid the Rainy Day Fund for water infrastructure on the ballot last year.[19]

SJR 1 "No" votes

A pros and cons of Prop 1 list, provided by the group Empower Texans

The following members of the Texas Legislature voted against placing this measure on the ballot.[17][18]

Note: A no vote on SJR 1 meant that a legislator did not want to refer the question to voters and did not necessarily mean these legislators disapproved of the stipulations laid out in Proposition 1.

Senate

House

Media editorial positions

See also: Endorsements of Texas ballot measures, 2014

Support

  • The Austin American-Statesman said,
Approving Proposition 1 not only will help fund highways and roads but will help maintain Texas’ economic competitiveness and save and add jobs. Approval also could mean more than $90 million a year in additional road money for the Austin highway district.[5]

Austin American-Statesman, [20]

  • The Monitor said,
We don’t condone what appears to be lax management of taxpayer funds in the past. But we need to fix the problem now. And if voters step up and approve Proposition 1, we expect the Texas Department of Transportation to do its part and be more prudent with spending in the future. In fact, if passed, the department will be required to identify $100 million in savings and operational cost cuts. Also, a 10-member legislative committee — which Nichols last week was named to — will evaluate and determine a “sufficient balance” to maintain for the Rainy Day Fund, which was begun in 1988 and is nearing a capped amount set by a previous Legislature.[5]

The Monitor, [21]

  • The Dallas Morning News said,
Texas voters have only one statewide ballot proposition to decide in November, and this one’s an easy call. Proposition 1 would yield billions for Texas roadways without raising taxes a penny. The proposal would tap the spiking tax collections on oil and gas production and use a portion for highways. It wouldn’t solve the road-funding problem, but it would put a dent in it. Voters can support this constitutional amendment with no qualms.[5]

Dallas Morning News, [22]

  • The Waco Tribune said,
Texans shouldn’t delude themselves about the magnitude of such problems as transportation funding. State highway officials say that to just maintain what we have now would require some $5 billion more in funding a year. But Proposition 1 would see that some of that oil and gas industry tax revenue windfall would not sit in savings but improve road conditions in Texas. (What’s currently in the Rainy Day Fund would not be touched, at least for this purpose.) [...] Texans once prided themselves on the best roads in the nation. It’s time to return to that standard. Vote for Proposition 1 this election.[5]

Waco Tribune, [23]

Path to the ballot

See also: Amending the Texas Constitution

A two-thirds vote in both chambers of the Texas State Legislature was required to refer this amendment to the ballot. Texas is one of sixteen states that requires this. On July 30, 2013, the Texas Senate approved SJR 1 by a vote of 22 to 3. On August 5, 2013, the Texas House of Representatives approved the bill by a vote of 106 to 20.[17]

Senate vote

July 30, 2013, Senate vote

Texas SJR 1 Senate vote
ResultVotesPercentage
Approveda Yes 22 88%
No312%

House vote

August 5, 2013, House vote

Texas SJR 1 House vote
ResultVotesPercentage
Approveda Yes 106 84%
No2016%

See also

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Suggest a link

External links

Support

Additional reading

References

  1. AGC of America, "Texas Legislature Passes Transportation Funding Measure," August 12, 2013
  2. Bloomberg, "Texas Lawmakers Let Voters Decide on Transportation Funds," August 6, 2013
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 House Research Organization, "Constitutional Amendment on November 2014 Ballot," May 29, 2014
  4. Texas Secretary of State, "Proposition Ballot Certification," August 26, 2014
  5. 5.0 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  6. Texas Secretary of State, "Sample Ballot," accessed September 15, 2014
  7. Texas Legislature, "H.J.R. No. 1," accessed September 17, 2014 (timed out)
  8. The Texas Tribune, "TRIBPEDIA: Rainy Day Fund," accessed September 15, 2014
  9. 9.0 9.1 MySanAntonio.com, "Third time’s a charm: Texas lawmakers finally pass transportation funding bill," August 6, 2013
  10. Texas Secretary of State, "Texas Administrative Code: Title 34, Part 1, Chapter 3, Subchapter O," accessed October 25, 2013
  11. Move Texas Forward, "Homepage," accessed September 15, 2014
  12. Texas House of Representatives, "House Joint Resolution 1," accessed August 6, 2013
  13. OpenStates.org, "SJR 1: Texas Senate Joint Resolution," accessed October 25, 2014
  14. Move Texas Forward, "Local Officials," accessed September 17, 2014
  15. Move Texas Forward, "Partners," accessed September 17, 2014
  16. 16.0 16.1 Texas Legislative Council, "Analysis of Proposed Constitutional Amendment," accessed October 25, 2014
  17. 17.0 17.1 17.2 Senate Journal, "FIRST DAY (Tuesday, July 30, 2013)," accessed October 25, 2014
  18. 18.0 18.1 LegiScan, "Vote: SJR 1Third Reading House," accessed October 25, 2014
  19. Examiner.com, "Issues for Texans to consider when voting on Prop 1," October 12, 2014
  20. Austin American-Statesman, "Support road-funding proposition," September 6, 2014
  21. The Monitor, "EDITORIAL: Texas voters should support Proposition 1 in fall," August 31, 2014
  22. Dallas Morning News, "Editorial: We recommend a yes vote on state’s Proposition 1," September 1, 2014
  23. Waco Tribune, "EDITORIAL: Proposition 1 deserves your vote if you believe in the ‘Texas miracle’," October 23, 2014