Ballot Proposition

Texans Overwhelmingly Approved Proposition 1

Texans passed a constitutional amendment on November 4, 2014 that will provide $1.7 billion in the first year alone – without new taxes, fees or debt.  Your support will Move Texas Forward.

What is the proposition and what does it do?

The November 2014 statewide ballot proposition is a constitutional amendment authorized by SJR 1, which legislators approved last year. The amendment would authorize annual disbursements from the state’s oil and gas production tax collections to the State Highway Fund. An estimated $1.7 billion would be transferred in to the State Highway Fund in the first year alone. The amendment would provide a significant step toward meeting the unmet funding needs for transportation projects in Texas. The ballot language for the proposition reads:

“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.”

How can the funds be used?

If approved by voters, the measure authorizes additional Texas transportation funding – without new taxes, tolls or fees – that can only be used for construction, maintenance, rehabilitation, and acquiring right-of-way for public roads. These funds cannot be used for toll roads. HB 1, a related bill that was also approved by the Texas Legislature in 2013, put these requirements in place.

Where does the money come from?

The additional transportation money would come from directing a portion of the state’s annual oil and gas production tax collections to the State Highway Fund. Currently, the state’s Economic Stabilization Fund (ESF) receives 75 percent of the state’s annual oil and gas production tax collections that exceed the amount collected in fiscal year 1987, when it was created. If approved by voters, half of the money currently destined for the ESF would be dedicated to the State Highway Fund. The remaining half would continue to build the unspent balance of the ESF. According to estimates from the Texas Comptroller, if voters approved the Constitutional Amendment $1.7 billion would be transferred in to the State Highway Fund in the first year alone.

What else is in the legislation?

Related legislation also passed in 2013 requires TxDOT to identify $100 million in savings, which it must use to reduce its long-term debt. These savings could come from operational efficiencies, cost reductions, or cost savings, but could not reduce the amount of funding available for transportation projects. The legislation also calls for the Lieutenant Governor and the Speaker of the House and to appoint five Senate members and five House members to a select committee to determine a “sufficient balance” of the ESF for a state fiscal biennium. In determining such a balance, the committee will consider the history of Fund balances; the history of transfers to the Fund; estimated Fund balances during that fiscal biennium; estimated transfers to the Fund to occur during that fiscal biennium; information available to the committee regarding state highway congestion and funding demands; and any other information requested by the committee regarding the state’s financial condition.

Does this solve the transportation funding problem in Texas?

The constitutional amendment would provide significant progress in addressing the state’s unmet transportation needs by providing $1.7 billion in the first year alone. However, this amendment alone does not “solve” Texas’ transportation funding challenge. Experts say Texas has at least $5 billion in unmet transportation needs each year. This measure is expected to provide $1.7 billion annually to address these transportation needs.