Why I am supporting “Prop 1” – the Transportation Funding Texas Constitutional Amendment

There has been much gnashing of teeth over “Prop 1” that in a nutshell, would divert a portion of extra revenues that come into the Texas treasury into road building instead of the general fund or being parked in an already large rainy day fund (RDF). (The revenues are a result of the booming oil and gas business in the state.)

In general, I do not like bonds or debt of any sort. (Government debt is fundamentally stealing from future generations—it is NOT the same as private debt.) However, Prop 1 provides for pay-as-you-go, not debt, and with our booming Texas population, we DO need some road work! Note that some of my respected conservative friends are opposing this proposition, but in my view most of their criticisms apply to the bill in its early stages, and not as finally passed, when conservatives got most of the bad parts fixed. Note also that what is “on the ballot” is only representative language and is NOT the Constitutional Amendment itself. Specifics of why I’ve decided to support the measure are listed below.

1. Contrary to what opponents say, Prop 1 does NOT “raid the rainy day fund”—it reduces the growth of the fund only. Without Prop 1, the RDF will likely hit its Constitutional LIMIT in three years or so, and at that point the oil and gas money would go into the general fund, where Dems and dubious programs and projects would also have access to it. With Prop 1, the RDF CONTINUES TO GROW but at half the rate, and the Prop 1 funds MUST be constitutionally dedicated for non-tolled roads.

2. It provides that some additional revenue that would eventually go into the general fund (and hence potentially wasted on all sorts of dubious projects that even the Dems support) be dedicated to building highways (that Harris County and other areas sorely need.) Before and after effects of Prop 1 are listed in the table below:

3. No tax rate increase on anyone.

4. Lower effective financing costs of road projects since RDF only EARNS around 1 ½ % and bonding by Texas for roads would COST around 6%. (Though interest rates are low, the so-called “soft costs” that go to lawyers and CPA’s to do the work to get the bonds sold on Wall Street are enormous.) The analogy here might be if you had a nest egg in the bank that was only earning 0.5%, but your mortgage was costing you 5%, you would be MUCH better off paying off some or all of your mortgage rather than letting the excess money sit in the low yielding account.

5. No money may be used for toll projects, again contrary to opponents’ claims.

6. Provides for a legitimate function of government (roads & road infrastructure) rather than the money potentially going to questionable projects with support of Dems.

Is it perfect? NO. Should the “gas tax” be returned to 100% use for roads? YES. However, this Prop 1 is a huge step in the right direction, and it would be foolish to vote against it because we didn’t get 100% of what we would have liked in a “perfect world”. Please vote YES on Prop 1.

Vote NO on other propositions on your ballot that increase government debt at all levels (school districts, junior colleges, emergency services, etc.)

Additional information:

ballotpedia.org/Texas_Transportation_Funding_Amendment,_Proposition_1_(2014)

http://movetexasforward.com/about-the-initiative/ballot-proposition/

- Written/printed by Mark Ramsey, SREC SD7

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