Texas bills focus on transportation funding

Transportation funding is a regular topic of conversation at the Texas statehouse. As legislators prepare for the start of the 2025 regular session, bills on the subject are already being filed for consideration.

The Lone Star State relies largely on vehicle taxes and fees, as well as tolls, to help cover costs for road construction and maintenance.

The state’s 20-cent fuel tax rate has remained unchanged for over three decades. As a result, state lawmakers have been forced to look elsewhere to help bolster transportation funding.

During the previous regular session in 2023, Gov. Greg Abbott signed into law a bill to impose an additional fee for the registration and renewed registration of electric and hybrid vehicles.

At the time, supporters said action was needed because fuel tax revenues cannot keep pace with vehicle use and rising road construction costs. They added that the increasing popularity of more fuel-efficient and electric vehicles will only widen that gap.

Fuel tax increase pursuit

Efforts to raise the state’s fuel tax rate are not unique at the statehouse. Two years ago, multiple transportation bills were introduced to increase the tax rate. The increases sought ranged from doubling the 20-cent rate to letting the rate be indexed to inflation, which would allow for regular increases.

With the onset of the 2025 regular session approaching, one House bill calls for indexing the excise tax to the highway cost index. The change would authorize the tax to be adjusted annually.

According to the Texas Comptroller, the tax rate has remained unchanged since October 1991.

Sponsored by Rep. Ray Lopez, D-San Antonio, HB326 would authorize the rate to increase or decrease each Jan. 1 based on the cost of certain highway projects.

Lopez has said that indexing would allow the tax rate to keep pace with the rate of rising costs of highway construction and would add long-term stability.

High-speed rail

Another bill would permit the state to address congestion concerns without relying on existing funding sources.

Rep. John Bucy, D-Austin, has filed legislation, HB483, to allow the Texas Department of Transportation to enter into a comprehensive development agreement with a private partner to build a high-speed rail line from Dallas-Fort Worth to San Antonio. The rail line would follow along the Interstate 35 corridor.

Texas law prohibits the use of state funds to build a high-speed rail line linking North Texas and Houston.

The bills await assignment to committee for the regular session that convenes Jan. 14, 2025. LL

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