AUSTIN (KXAN) — Few question Texas’ “economic miracle” but as new leaders take the reins of power, they realize more and more that the budget now entrusted to them is sloppy and sometimes – dishonest. Millions of Texans pay for services they never get. Lawmakers raid the state highway fund and charge fees for products they don’t deliver. Lawmakers take money from one account to fund others. A lot of elected officials have cooked the books for years.
That could change this session. In a back corner of the Capitol extension, two lawmakers hope to stop the accounting tricks. They come from different parties but agree on one thing: Texans should get what they pay for. Senator Charles Schwertner (R-Georgetown) is an orthopedic surgeon by trade who’s quietly worked his way to power positions. Senator Kirk Watson (D-Austin) moved from being Austin’s mayor to a prominent member of the Democratic Caucus. These office neighbors have unprecedented access to our budget problems.
Lawmakers know them as diversions. Fifteen cents for every gallon of gas bought in Texas goes to the State Highway Fund, meant for repairs to current roads and construction of new ones. Almost 20 percent of that money never gets there.
“A lot of people don’t realize it,” said Schwertner in a pre-session interview. He describes how millions of dollars get diverted or rerouted from the highway fund to a myriad of different departments like the Attorney General’s Office, the Texas Education Agency, but above all – the Department of Public Safety.
“You levy a dedicated tax, it should be utilized for that dedicated purpose,” said Schwertner, which seems like common sense, but hasn’t been happening. He filed a bill that would amend the Texas Constitution, forcing lawmakers to keep the money in the State Highway Fund. Doing that would add at least $620 million per year in asphalt.
“So not only are we improving the amount of money going towards transportation, but in my opinion we are improving the transparency of government,” said Sen. Schwertner.
In a time when it’s political suicide to take a penny away from the Department of Public Safety and border security, stiff opposition would form if it weren’t for two things.
The first was the overwhelming approval of the State’s Proposition One in November 2014. Eighty percent of voters gave a loud and clear message to lawmakers.
“The people of this state want our transportation needs addressed,” said Watson.
The Texas Department of Transportation asks for $5 billion more each year just to maintain our current road system. Sneaking money away from roads seems shadier than ever.
The second is the phrase, “We will replace the money to the Department of Public Safety.” Lieutenant Governor Dan Patrick uttered that while laying out his legislative priorities. He followed through with Senate Finance Chair Jane Nelson, presenting the Senate’s rough draft budget. They add to Speaker Joe Straus’s yearly effort and Governor Abbott’s campaign promise that “money dedicated for roads will be spent only on roads.”
“There might be some stumbles along the way, but it would take something pretty crazy to completely derail something that you saw the Lieutenant Governor, the Speaker, and the Governor agreeing on something to do,” said KUT’s Ben Philpott, who’s covered the capitol for years.
The Piggy Banks
Every time a motorcyclist pays a license renewal fee, $5 goes into an account to administer the motorcycle operation training and safety program. The account has almost $18 million and in the last eight years, not a penny has gone to the safety program.
“There are about two hundred of these piggy banks all over state government,” said Watson.
They’re called General Revenue Dedicated accounts or GRDs. The state collects a fee for a specific purpose, then never makes good on that purpose. Almost $33 million collected from the hotel occupancy tax doesn’t go to the intended Economic Development and Tourism office. Nearly $5 million sit for disaster contracts like emergency housing and debris removal. Watson says the accounts vary in size and purpose, totaling up to $4.2 billion.
“The legislature has always had a few of these things over the years,” said Philpott,”I was told about ten to twelve years ago was when the practice kind of went crazy.”
Lawmakers created a structural deficit. If we spent that $4.2 billion cold turkey, we’d blow a hole in the budget.
“They are now reliant on that, much the way a bad old drunk is,” said Watson describing the bill he filed. “So, we will put them in a situation where there’s a glide path and we can wean them off their bad habit.”
Last time he got the glide path in the Senate budget. But in the quiet corners, late night meetings, and hallway conversations that are “conference committees” his plan was stripped out.
He’s nonetheless made progress. Less than a decade ago, the Comptroller wasn’t even required to publish the numbers. In 2013 he got his bill in the budget, this year he hopes to get it passed.
“More people know about it now. I think that’s the reason we’re having success,” said Watson.
He seems to have an ally next door. Schwertner said that, “we need to continue to make improvements in the transparency and accountability of the state budget, and I believe that diminishing the use of dedicated accounts is an important step in that direction. Texans deserve to know that any taxes or fees they’re asked to pay are being used appropriately and for their intended purpose.”
Not only are Watson and Schwertner office neighbors, they sit hip to hip on the Senate Finance Committee. For the first time ever they both can put their hands on the numbers.
“My guess is I’ll be talking some,” said Watson.
“There’s always some resistance to changing the status quo. It won’t necessarily be easy, but I believe this is the right and honest thing to do for Texas taxpayers,” said Sen. Schwertner.
Tough decisions still need to be made and we’re early in the budget process. You never know what bill can sidetrack an entire legislature. If there’s a choice between ending dishonest budgeting, or say, tax cuts, we all know which way that will go. But enough people are talking about it that these two neighbors are hopeful.