Falling gas prices could cut Texas highway funding

The approval of Proposition 1 last month was expected to bring the Texas Department of Transportation as much as $1.7 billion a year in funding.

But falling gas prices and the plummeting value of oil could mean a lot less money for roads in the state.

No one is complaining about lower gas prices, but with Prop 1 tied to gas prices, it may mean fewer funds for Texas roads, although the El Paso state representative who pushed the passing of the proposition is confident it will all balance out in the end.

“It’s a concern, but it’s going to be a short-lived concern,” said El Paso State Rep. Joe Pickett, pointing out he likes the fact that gas prices have fallen drastically, although it could mean less funding for TxDOT in the short run. “It could be nothing next year, but we’re already ahead of the game and this is not a one-time deal. This is a revenue source into perpetuity, unless somebody wants to change it.”

With funding from Prop 1 retroactive to 2014 and gas prices higher throughout most of this year, funding projections were nearly doubled in the first year TxDOT will receive the additional money. Plus Pickett is confident gas prices will rise again.

“You and I like the low gas prices, but you really think its going to be two dollars a gallon two years from now?” Picket said. “Probably not.”

One of Pickett’s bills deals with diversions. That’s the term used for money that could go to the Texas Highway Fund that is instead diverted to agencies like the Department of Motor Vehicles and the Department of Public Safety. It’s estimated more than $600 million a year that could go to TxDOT goes to other agencies instead.

“Even the speaker has said he wants to end the diversions through the process,” Pickett said. “The problem with that is, you don’t end them, you just postpone that. And if there’s a legislature that needs to dip into the well, so to speak, that’ll be the first thing they go back to after. So I’d rather see them ended by statute.”

In the long run, Pickett believes due to Prop 1’s passage and despite falling gas prices, El Paso drivers will benefit greatly.

“For El Paso, the first year it’s going to mean another $40 million to our area right here that was not part of what we are planning,” Pickett said.

With more than $20 million registered vehicles in Texas, Pickett said lower gas prices could mean people drive more. And that could increase the separate gas tax revenues in the state, since it is set at 20 cents per gallon. He said if people drive as little as 10 percent more, that could be worth an additional $80 to 100 million for Texas roads.