Proposed Texas Fuel Tax Shift Could Boost County Road Funds Without Raising Taxes

CASS COUNTY, TX — A Cass County judge is urging state lawmakers to redirect 1 cent of every 20 cents in Texas motor fuel tax revenue to county governments, a move he says would pump an extra $190 million a year into road repairs statewide without a tax increase. 

Cass County Judge Travis Ransom’s proposal would amend state law to give counties a dedicated share of the 20-cents-per-gallon State Motor Fuel Tax for the first time in decades. The change is drawing support from other county judges, state lawmakers and top Texas Republicans.“

The plan would also direct 5% of revenue from electric vehicle registration fees to counties. Those fees were created because electric vehicles do not pay the fuel tax. 

Texas has taxed vehicle fuel since the 1920s. The tax began at 1 cent per gallon and now stands at 20 cents. It generates roughly $3.9 billion annually and grows about 5% a year. Most of the money currently goes to public education and the Texas Department of Transportation for highway maintenance. 

Counties have not shared in that growth. Since 1954, the Lateral Road Fund has delivered a fixed $7.3 million a year to all 254 counties, divided according to each county’s road miles and rural population. Ransom said inflation has eroded that amount so severely that the 1954 figure would equal about $190 million in today’s dollars — the same sum his proposal would restore. 

Cass County, which maintains 1,000 linear miles of roadway, receives about $37,000 a year from the fund. That is not enough to apply chip-and-seal material to one-quarter of a mile of road, Ransom said. The county budgets roughly $3 million annually for road work and would gain about $900,000 more under the proposal. 

Texas counties maintain half of all public roadway miles. Poor road conditions are also a safety issue: roughly 7% of traffic-related fatalities occur on county roads, Ransom said.

State Sen. Bryan Hughes, R-Mineola, has asked Lt. Gov. Dan Patrick to add the proposal as an interim charge before the 2027 legislative session. An interim charge directs lawmakers to study an issue and recommend solutions. 

Ransom said the reallocation would not harm TxDOT or education funding because overall tax revenue continues to grow. 

The proposal comes as lawmakers consider property-tax reforms that could reduce revenue for counties, cities and schools. Ransom described his plan as a fiscally conservative way to fund an essential government service without raising property taxes.