Voters pass Prop 1, securing billions in funding for Texas roads
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- Nicholas Sakelaris
- Staff Writer- Dallas Business Journal
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Taxes from the oil and gas industry will be a new source of revenue for cash-strapped Texas roads after voters overwhelmingly approved Proposition 1 Tuesday night.
The measure passed with 80 percent of the vote with 46 percent of the state's precincts reporting.
The constitutional amendment takes a portion of the severance tax paid by the energy industry that was going into the state's Rainy Day Fund and allocates it to the State Highway Fund.
Texas collected $3.8 billion in crude oil taxes and another $1.9 billion in natural gas taxes in the 2014 fiscal year, according to the Texas State Comptroller. For an idea of how fast this revenue source is growing, collections on crude oil taxes jumped 30 percent while natural gas went up 27 percent compared to the 2012 fiscal year.
But transportation experts and lawmakers say the additional revenue, estimated at $1.7 billion—won't be enough and that additional sources of revenue must be found in the 2015 Texas Legislative session.
Also, consider that crude oil is trading below $80 per barrel this week, which could lower that $1.7 billion figure even lower if that trend continues.
"The fund only gets funded based on levels of where oil and gas are priced at," said Sen. Kelly Hancock, R-North Richland Hills, at a transportation forum Oct. 31. "We've been very fortunate to see crude priced at $100 a barrel for quite some time. It's going to change the amount of revenue flowing in for Proposition 1."
The constitutional amendment includes conditions, such as the revenue can't be used on toll roads, and the revenue stops flowing to the State Highway Fund if the Rainy Day Fund, the state's savings account, gets too low.
Nicholas covers the energy, manufacturing, aviation and transportation beats for the Dallas Business Journal. Subscribe the Energy Inc. newsletter
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