DALLAS – A plan to tap Texas’s rainy day fund for transportation funding died in the Legislature’s regular session, but two key state senators want to revisit the proposal in the current special session.

The special session that got under way Monday is currently limited to redistricting, but Senate Finance Committee chair Tommy Williams, R-The Woodlands, and Transportation Committee chair Robert Nichols, R-Jacksonville, have asked Gov. Rick Perry to open the session to include the highway funding plan.

If they are successful, Texas voters would decide at the Nov. 5 election whether to divert almost $1 billion a year into the transportation trust fund rather than depositing it into the Economic Stabilization Fund as currently required.

Senate Joint Resolution 2, sponsored by Williams and Nichols, proposes a constitutional amendment splitting the revenue generated by state oil and gas production taxes between the two funds.

The Legislative Budget Board estimated the plan would generate $845 million for each fund in fiscal 2014. Deposits are expected to total $879 million in fiscal 2015 and $932 million in fiscal 2016, the analysts said.

The proposed amendment stipulates that the revenue would be used for “the payment from the state highway fund of the principal and interest on certain highway improvement bonds.”

Perry seems to be receptive to the funding idea, said Gary Scharrer, Williams’ communications director.

“We’ve been talking with his (Perry’s) staff and we’re pretty hopeful,” Scharrer said Thursday.

Perry was supportive of more money for transportation at a Tuesday news conference, but remained noncommittal about including the proposal in the session that began Monday night.

“I think it’s a little bit premature, with less than 24 hours since we’ve called this special (session), to be addressing whether we’re going to be adding anything to the call or not,” he said.

The additional revenue would provide much-needed funding to Texas Department of Transportation, Williams said.

“This would provide a very robust funding source,” he said. “It takes us a long way to where we need to be on transportation.

“We’ve got a good idea here that can provide funding without raising any new taxes.”

TXDOT received an additional $400 million for general spending in the fiscal 2014-2015 budget, but the department said it needs an additional $4 billion over the next two years just to maintain the current highway inventory. TXDOT also received $450 million to build and repair roads damaged by increased oil and gas production activity.

“If we start to choke on our own gridlock, that would be detrimental to our own economic growth,” Williams said.

An additional $1.5 billion coming in over two years from the proposed diversion would leverage $15 billion of highway work, Williams said.

“To maintain a robust economy, you have to have a transportation system to move people and goods and services,” he said. “You have to spend money on things that will make a difference in the state’s economy, and this is one of those things.”

Lawmakers passed a biennial spending plan in the regular session that takes $3.9 billion from the rainy day fund for a water development bond program and public education, but balked at including transportation funding in the mix. The state’s savings account is expected to total $7 billion at the end of fiscal 2015.

Congested and deteriorating highways will hamper the state’s economic growth, said Bill Hammond, president and CEO of the Texas Association of Business. “Major transportation funding is one of the things that unfortunately did not happen during the regular session,” Hammond said.

“We must have a way to fund new roads to deal with our growing traffic problem,” he said. “Without these new projects we risk our economic edge in attracting new investment, jobs, and business to this state.”

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.