Our Transportation Toolbox

What tools do we have to solve the transportation crisis?

To build out a comprehensive transportation system that actually reduces traffic congestion in Central Texas by 2030, we need to find at least $12.7 billion in funding beyond what we have right now. That’s about $635 million a year  for the next 20 years to Take On Traffic. Where will that money come from? Here are the main options:

• Fuel taxes. Currently, the combined state and federal fuel tax is 38.4 cents per gallon. To Take On Traffic with fuel taxes alone would require raising this to between $1.20 and $1.77 a gallon — on top of the price of gas itself, which is likely to go up. The exact number depends on whether this additional fuel tax is implemented statewide or locally, if and whether it’s indexed to inflation or to increasing construction costs, and the degree to which increased fuel efficiency impacts fuel tax revenue.

• Sales taxes. Right now, state law limits the combined sales tax paid in local communities. Assuming that Texas allows regions to raise this limit to fund transportation improvements, our current 8.25% sales tax would have to increase to at least 11.75%, and maybe as high as 13.87%, to raise the required funding to Take On Traffic. That means adding between $3.50 and $5.62 to every $100 spent. Sales tax is also a highly volatile revenue source, going up and down with the economic cycle, which has already had an impact on transportation funding by the cities, counties, and Capital Metro.

• Property taxes. Bonds repaid with property taxes are the main source of revenue for city streets and county roads in Central Texas. To Take on Traffic, including state and national(interstate) roads with property taxes alone would require raising taxes in Travis, Williamson, and Hays Counties by between 63 cents and 98 cents per $100 valuation. (By comparison, the current City of Austin tax rate is 41 cents.) That means adding between $1260 and $2000 a year to the current tax bill for a $200,000 home.

• Tolls, fares and fees. Bus fares collected by Capital Metro, vehicle registration fees collected by the state, impact fees collected by the cities, and tolls are all user fees. They give citizens a choice about how much they want to pay to support the roads and systems that they use, and they attach a direct revenue stream for transportation that doesn’t have to compete with other needs. Also, because tolls allow new roads and lanes to be built faster — much faster — using them to fund projects helps beat the inflation cycle and keep overall costs down.