Could gas tax hike be ahead?
Dave McNeely

Some might call Sen. John Carona of Dallas the bottom-line equivalent of a Compassionate Conservative: he's a Responsible Republican.

He says raising the state's 20 cents per gallon gasoline tax is not a total solution for financing Texas' highway system, but should be part of it, since inflation has steadily eaten away at its buying power.

Carona, 51, is the chairman of the Senate Committee on Transportation & Homeland Security. In that role, he's chewed out Gov. Rick Perry's designated Toll Road Warrior, Texas Department of Transportation Chairman Ric Williamson.

Carona, who overlapped with Williamson for six years in the Texas House of Representatives, charged in a confrontation a few weeks ago that Williamson and Perry were over-relying on toll roads, practiced secretiveness in toll road contracts, and ducked meetings with Carona and other legislators about the state's transportation systems. Williamson has since met with Carona, and tempers have cooled somewhat.

Williamson and Perry say it would take a tax of $1 a gallon to build as many highways as their toll roads.

The state's motor fuels tax was raised a nickel to reach 20 cents during the budget crunch of 1991. The Federal tax is another 18.4 cents.

At the current price of about $2.35 per gallon for regular, the state gas tax is about 10 percent per gallon.

The tax is predicted to raise about $4.5 billion over the coming two-year spending period, or about $850 million a year. Three-fourths of that goes to transportation needs, and one-fourth to public education.

In the almost 16 years since the tax was last raised, to have the same buying power as a 1991 dollar would require $1.49 today. That would require a tax of about 28 cents per gallon, just to stay even.

In 2001, two legislators - Democrat Clyde Alexander of Athens, and Republican Kip Averitt of Waco - introduced a bill to raise the tax by a nickel, to 25 cents. But with new Gov. Rick Perry threatening to veto any new tax, the bill went nowhere.

Had the nickel been added in 2001, the state would have had approximately $3 billion more for transportation over the past six years, and about three-fourths of a billion more for public schools.

But Carona doesn't just want to raise the tax by a flat amount. He wants to index the gasoline tax, so that it will grow with the state's needs.

He also wants to index the tax not to the Consumer Price Index, but to the percentage annual increase of highway construction costs, not to exceed 4.5 percent in any one year.

Carona also would peg that percentage not just on the state's 20-cent tax, but also the federal tax of 18.4 cents per gallon.

At the current rate, that would add about 1.7 cents per gallon to the tax load - not much. But in the first full year, the add-on would increase gas tax revenue by approximately $384 million.

"Anything that can do that much good with so little pain is a good thing," Carona said. The Senate is in a mood to pass the indexed tax, he said.

The net revenue for the second year - assuming the cap of 4.5 percent were used again - would be close to $800 million more than the 20-cent tax would have produced, with threefourths going to transportation and one-fourth to schools. With 75 percent going for transportation, that's almost $900 million more over the two-year spending period - and even more in the next two years.

Gov. Perry, back from eight days in the Persian Gulf, told the Texas Legislative Conference on Friday, March 23, that toll roads may not be popular, but are the best available alternative.

"If you have a better idea how to get traffic moving in this state, offer your idea," he said. "We either build toll roads, slow roads or no roads."

Carona continues to tout the gas tax increase.

"This will not eliminate tolls," Carona emphasized. "This will not replace tolls. But it's one more tool to assure that toll roads aren't the only type of roads we build in this state."

Reach McNeely at dmcneely@austin.rr.com or (512) 323-0248.