Equipment World Digital Magazine
Issue link: http://read.dmtmag.com/i/407095
November 2014 | EquipmentWorld.com 82 B y the time you read this Texas voters in all likelihood will have approved Proposition 1, which will take half the revenue going into the state's rainy day fund and put it toward highway construction and maintenance. Prop 1 will add about $1.7 billion to the TxDOT budget in 2015, a 17-percent boost to the state's road building funds. What makes this funding source unique is that it is not derived from gas and diesel taxes paid by consumers at the pump. Rather, the funds come from royalties paid by the oil and gas companies at the wellhead. Texas established its rainy-day fund in 1988, and made it hard for politicians to dip into. But the fund continued to grow even while Texas borrowed money to pay for highway programs. That makes about as much sense as taking out a loan and paying high interest rates on a car for which you could easily pay cash. What makes Prop 1 significant is that the law forbids the use of those funds for any- thing other than new road construction, road maintenance and right-of-way acquisitions. None of it can be used for toll roads, bike paths, light rail or other diversionary projects. This kind of shell game by politicians is what drives much of the anti-tax sentiment in this country, and make no mistake, Texas is one of our most anti-tax states. What's more, Texans are a tough lot to please when it comes to their roads. Voters shot down Governor Rick Perry's Trans-Texas Corridor in 2009, and today the state hosts a feisty anti-toll road movement. But having been offered a clearly written law with honest funding specifications, the voters of Texas, if the polls are correct, will overwhelmingly say "yes" to this new source of highway funding this month. The rest of the country should pay attention. Not every state has the oil and gas resources that Texas enjoys, but North Dakota is awash in new oil and gas. The Marcellus Shale boom touches West Virginia, Ohio, Pennsylvania and New York State. Colorado's energy sector is booming and California also has a lot of these resources if they'd let the drillers drill. Accord- ing to the United States Energy Information Administration there are almost two dozen states with shale gas reserves, not to mention vast off-shore fields in places like Florida and Virginia, where drilling is banned. Bottom line: the revenue is there, the will is there, and the public approves. But this only works if the politicians change their tune. They have to stop pandering to radical envi- ronmentalists, stop assuming the only solution is to raise taxes at the consumer level, and stop sneaking money into pet projects that should rightly go to highway programs. That's the formula, and Texas, the state that – thanks to its oil boom – leads the nation in job creation and equipment sales, has shown us the way. With Prop 1, Texas will break the logjam, spur innovation in highway funding final word | by Tom Jackson TJackson@randallreilly.com