83rd Legislative Session

Texas 83rd Legislative Session Update: Bill Would Use Car-Part Taxes for Highways

The following is a digest of an article from the Dallas Morning News by Tom Benning on February 12th, 2013.

Texas highways are funded in large part by motor fuels tax, and top lawmakers are looking to boost the state’s road fund with the sales tax collected on new and used vehicle purchases.

TxDOT officials say the agency needs an additional $1 billion annually for maintenance and $3 billion more annually to grow the state’s road system.  In a bill filed last month, state Sen. Ken Paxton proposes Texas use revenue from the state sales tax on tires, mufflers, and other car parts to bolster the Texas Department of Transportation’s $10 billion annual budget by about $20-25 million. The broader idea, seen in other transit-related bills, is that revenue generated from transportation-related activities should be used for transportation-related purposes.

The big item in Paxton’s bill, which would require a constitutional amendment, is addressing diversions. More than $600 million each year is diverted from the highway fund to other state agencies, such as the Texas Department of Public Safety. Gov. Rick Perry and others have called for diversions to end, although much of that money goes to the DPS for policing highways.

Paxton’s bill also calls for the sales tax revenue on tires and car parts to go to the highway fund. The chairmen of the House and Senate transportation committees have already said they want to rededicate the 6.25 percent sales tax on new and used vehicle purchases to the highway fund. That would eventually give $3 billion annually to TxDOT.