This morning Dallas Morning News' Todd Gillman and Michael Lindenberger report Texas Senator Kay Bailey Hutchison will propose legislation to allow Texas to opt-out of the Federal highway system (and discontinue contributions to the federal Highway Trust Fund) to keep all fuel tax revenues in Texas.

According to Hutchison this is an issue of "equity" in Texas' long-time standing as a gas tax "donor" state, only getting back about 92 cents for every dollar of gas tax revenues we contribute to the federal Highway Trust Fund. Other, generally smaller, states are considered "donee" states and receive more money from the trust fund than they contribute.

The federal highway funding formulas pit donor states (like Texas, Oklahoma and Florida) against donee states (like Alaska and the District of Columbia). For an in-depth perspective see Ending Pervasive Inequities in Gas Tax Burdens by Dr. Ronald Utt for Heritage Foundation, June 16, 2008. Table 2 lists Texas as the "biggest loser" in gas tax revenues paid into the Highway Trust Fund that we never get back.

Back in August Senator Hutchison spoke about her plans to file legislation that would allow Texas to opt-out of the federal Highway Trust Fund, but this most recent announcement comes on the heels of the Transportation Reauthorization Act which will be up for renewal later this year.

While I support Senator's Hutchison's idea to keep more money in Texas and see it as a part of our larger transportation funding solution puzzle, there is much more to be done before Texas sees an adequate level of state and federal road funding. In that vein, I agree with Texas Transportation Commissioner Ned Holmes' perspective that we still must do everything we can (including raising the national gas tax and embracing tolls and other user fees) to find transportation funding solutions for Texas: "There needs to be more funding, period," Holmes said.

——UPDATE——

Senator Hutchison and Representative Jeff Flake (R-Arizona) - another donor state - explain their position on the federal highway system's funding formulas and their proposed "Highway Fairness and Reform Act of 2009" in a letter in the Washington Times this morning. From the letter:

"...highway users in all 50 states are still paying into the national highway system through a formula designed around the now-obsolete purpose of completing the Interstate System.

"This funding formula is no longer serving the best interests of each state and its motorists. ...

"This bill would give states the choice to opt out of the federal highway program and instead be rebated federal fuel taxes collected within their borders. Our proposal would cut the overwhelming majority of attached federal strings but would require that rebated taxes be spend on surface transportation projects."

Continue reading Hutchison/Flake: Funding Formula Needs Repaving