Texas House Wants $3.6B For Highways From State Sales Tax

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DALLAS - The Texas House approved up to $3.6 billion of general sales tax revenue for non-tolled highway projects, providing a broader revenue base for transportation than a Senate version of the measure.

The version of Senate Joint Resolution 5 approved by the Senate dedicates only a portion of motor vehicle sales tax revenue to transportation projects. Backers estimated that revenue at about $2.5 billion per year in the first years.

"It's important that we have a clear dedicated amount of money," said Rep. Joe Pickett, D-El Paso, sponsor of the House substitute version. "This is spread over a very broad base. It's less volatile. This is going to be a great way to plan transportation and provide a dedicated funding source."

Some House Democrats expressed concern about dedicating the general sales tax to a specific purpose while economic uncertainty and a court case involving school funding remain unresolved.

""At a time when diminished oil prices threaten the future growth of our economy, and in a week where we have already voted to reduce sales tax and franchise tax revenue while rightfully limiting our ability to use General Revenue Dedicated funds for certification, SJR 5 seems to be a display of well-intentioned but ill-conceived promises that steer us onto a path of fiscal irresponsibility," said Rep. Donna Howard, D-Austin.

The House has already voted to reduce the state sales tax for the first time in history as part of $4.9 billion of tax relief. That measure conflicts with the Senate's $4.6 billion tax cut that reduces property taxes.

In either the House or Senate form, SJR 5 would require approval by Texas voters to become part of the state constitution.

The amendment would require the state Comptroller to set aside?$3 billion of sales tax revenue, along with another 2% of net revenue from the sales tax.

Pickett said the sales tax formula is preferable to an increase in the state's fuel tax, which has not been raised since 1991.

"It's not politically feasible at this time," Pickett said. "I'm a realist. Even if we were to propose a gas tax, that would start waning very quickly."

The Senate's version of SJR 5 by Sen. Robert Nichols, R-Jacksonville, would allocating the first $2.5 billion in annual car sales tax revenue to the general fund and the next $2.5 billion to the highway fund. Some of the revenue collected beyond $5 billion would also go to the highway fund. Texans pay a 6.25% sales tax on automobiles, which provides about $4 billion a year going into the state's all-purpose general revenue fund.

Resolution of the two versions of SJR 5 will come as a House-Senate Conference Committee works out $1.6 billion of differences in the two houses' budgets. The Senate approved the higher $211 billion spending plan for the next two years beginning Sept. 1.

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