DALLAS — After failing in previous sessions to find a reliable source of revenue for Texas' growing transportation needs, Republicans are studying options for raising fuel taxes or levying a new sales tax on vehicles and related products.
Sen. Robert Nichols, R-Jacksonville, and Rep. Larry Phillips, R-Sherman, chairs of the transportation committees in the Senate and House, filed bills to constitutionally dedicate the current motor vehicle sales tax to the transportation fund. "It is time to fundamentally fix our long-term transportation funding problem," he said.
"Transportation infrastructure is a core function of government and must be addressed," Phillips said. "What could make more sense than to dedicate the taxes that we currently pay for vehicles to the roads and bridges they are dependent upon?"
The 38.4 cents in state and federal taxes Texans pay per gallon of gas has not increased in 20 years and has failed to keep up with inflation and the increasing fuel efficiency of new vehicles. Some of that revenue has also been diverted to other needs, such as education and the Department of Public Safety.
Another member of the Senate Transportation Committee, Kevin Eltife, R-Tyler, is proposing raising the state's 20-cents per gallon fuel tax by 10 cents, then index the tax to inflation so Texas won't face another road funding shortfall in 20 years.
Eltife's proposal would bring in an extra $1.1 billion per year for highways, based on current fuel usage. The plan follows the failed bid of Sen. John Carona, R-Dallas, to index the fuel tax to inflation in a 2009 bill.
In 2011, Sen. Steve Ogden, R-Bryan, proposed putting a constitutional amendment before voters, who would decide whether to raise the fuel tax by 5 cents. GOP Gov. Rick Perry opposed both.
Senate Transportation Committee vice-chairman Ken Paxton, R-McKinney, has introduced a bill that would tap the state sales tax on auto parts and channel the money to the Texas Department of Transportation's $10 billion annual budget.
Revenue generated from transportation-related activities should be used for transportation-related purposes, Paxton said.
Texas Department of Transportation officials say the agency needs an additional $1 billion annually for maintenance and $3 billion more annually to expand the state's road system. Perry and others have called for diversions to end. Paxton's bill would strengthen those provisions.
The sales tax revenue on tires and other car parts would offer only $20-$25 million a year, projections. Other ideas to boost the highway fund include raising the annual vehicle registration fee by $50 and applying all of the gas tax to TxDOT.
"The funding source must be predictable over long periods of time, constitutionally dedicated, transportation related, independent of fuel source and automatically adjustable for inflation," Nichols said.