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On behalf of Americans for Prosperity Foundation and Texas taxpayers, I am pleased to have been invited to testify today.
I appreciate the challenges facing Texas as we are the most dynamic state in the country, the fastest growing state, and have created more jobs than all other states combined during this recession.
Texans have long been proud of our highways and road systems. The majority of us depend on our cars for transportation, and we would all agree we have some heavily congested roadways.
We at AFP Foundation have concern that some of the proposed solutions to congested roadways is misplaced and reckless.
Today, I want to address three issues:
• Raising the gas tax
• Use of public funds to lobby and advocate
• Diversions of transportation dollars which signify current spending priorities; and
• Our opposition to any additional taxing authority for local governments.
First, I would like to address the issue of raising the gas tax.
One gubernatorial candidate recommended gas tax of 8 cents and implementing automatic increases in the gas tax annually from 2012 forward based on increases in the Highway Cost Index. That is the wrong way to go. We had a gas tax surplus in the late 1970’s when the legislature proposed the constitutional amendment to divert 25% of the gas tax revenue to education. Let’s not do that again. It’s time to end the diversions, direct all gas taxes to roads and not consider a gas tax increase until all diversions are ended.
Second, we also see our road dollars being misused when TXDOT and other government entities are using tax dollars to lobby in support of higher taxes.
It has long been a concern that TXDOT has lobbied the legislature and spent our tax dollars to advocate. That is inappropriate use of our tax dollars and we will propose further legislative remedies or sanctions to end that practice.
Also, thanks to the good investigative work of the Lone Star Report, we have learned that transportation lobbyists last session asked local entities as well as public universities to write letters in support of the local option tax. If not illegal, this is an outrageous use of influence and public resources and must not happen again.
Letters from the University of North Texas and from The University of Texas at Arlington are attached, both of which advocate for higher transportation taxes. At a time when parents are struggling to pay ever-increasing tuition taxes, it is particularly inappropriate for university officials to be advocating for higher taxes. It is outrageous to us as a taxpayer group that the lobbyists and the university officials would think this is acceptable.
Third, we recognize that significant transportation dollars are siphoned off for other purposes. If legislators and local government officials agree that transportation is a priority, we should end those diversions – all of the diversions – before we consider any additional taxing authority.
Diversions include the constitutionally-approved gas tax funding which is going to education. The taxpayers approved that diversion when we had more transportation dollars than were needed to build and maintain roads. If that is not the case now, then we should go back to the taxpayers and ask them to end or to begin to decrease our education diversion from gas taxes until the diversion is ended.
Some would argue we don’t have the funding to make up the education dollars which are coming from the gas tax, but we believe that truth in taxation would suggest we could and should redirect gas taxes to transportation and begin to fund those education dollars from other sources, if all the funds were deemed necessary.
Finally, we oppose any new taxing authorities for local governments. Local governments have grown four times faster than Texans’ paychecks and local government debt has grown five times faster than Texans’ ability to pay. We are setting ourselves up for a meltdown if we don’t take a closer look at local government growth.
The 63rd legislature in 1973 authorized cities and counties to set up Metropolitan Transit Authorities and provide for a one-cent sales tax dedicated to transportation.
Today, according to the Comptroller's Office, there are " six metropolitan transit authorities (MTAs), two city transit departments (CTDs), one county transit authority (CTA) and one advanced transportation district (ATD) that impose sales and use tax."
Not all have imposed the full cent and not all who have are dedicating that full cent to transportation. (see December 2009 Houston Chronicle Q&A below)
We should not consider additional taxing authority until that which has already been granted is being fully utilized.
Here's a link to the list of transit taxing entities, it includes when each tax was imposed: http://www.window.state.tx.us/taxinfo/local/mta.html
Here's another link that tracks the changes in the transit tax rate in each locality over the years: http://ecpa.cpa.state.tx.us/taxrates/RateHist.jsp
some localities which use the Houston Chronicle Q&A:
Here's an excerpt from an interview with the outgoing Houston Metro chairman in December 2009, wants to get more of the transit sales tax money (link: http://www.chron.com/disp/story.mpl/metropolitan/6755259.html):
Q: If Metro needed more money, where could it get more?
A: For Metro to have restored to it the funding that the taxpayers originally voted in 1978, which is the full one-cent sales tax. No other transit authority in the country has its sales tax diverted (by one quarter) to build roads, and this is something I believe should never have happened.
Q: How much more a year would Metro get if it had the full one-cent sales tax, and didn't have to divert 25 percent of that back to its member municipalities for roadwork?
A: Over $100 million a year.
-In 2003 the Houston Metro Authority launched an "education" campaign concerning a proposed light rail expansion, which was criticized by opponents of being an illegal political advertisement. Link: http://web.archive.org/web/20040315163934/http://www.texansfortruem...
Finally, we give local taxing entities authority to raise taxes now. They have the property taxes. It is our position that many localities don’t set spending priorities, use local dollars on non-priorities, then squeal that they need more transportation dollars.
We will oppose any efforts to raise the gasoline tax, index the tax, or provide additional taxing authority to local governments until the gas tax diversions are ended and all the current transportation taxing authority is used and directed toward transportation.