Senator Eliot Shapleigh - El Paso, Texas

AUSTIN - House Speaker Tom Craddick said Tuesday that he wants to squeeze more money out of the state gasoline tax by allowing the tax rate, now set at 20 cents per gallon, to rise in step with some type of inflation index.

The tax, last increased in 1991, is a major revenue-raiser for highways and the public schools, but the state hasn't cashed in on the high gasoline prices of recent years because tax revenue — which is based on quantity, not price — has been relatively flat.

Nor has the tax kept pace with increasing costs of highway construction, prompting the state to begin promoting more toll roads in urban areas, even in the face of public opposition.

The tax is expected to raise almost $3 billion this year, with three-fourths of the revenue going to highways and one-fourth to education, as required by the state constitution.

But the Texas Department of Transportation has said that won't come close to meeting the state's growing highway needs. The agency has estimated a tax increase of about $1 per gallon would be necessary to close that gap, a level that still seems out of the question politically.

Legislators also are looking for new education funding as part of a school finance overhaul.

Craddick said he was aware of the "inflationary problems we have with the dollars we raise from the gasoline tax."

"I don't know what we're going to look at, but I do support some type of inflationary index," he said, without specifying how much higher he thought the tax should be.

State Rep. Mike Krusee, R-Round Rock, chairman of the House Transportation Committee, said he was trying to find a way to "stabilize the (buying) power of the gasoline tax."

The 20-cent rate adopted in 1991, he said, is now worth only about 13 or 14 cents in purchasing power.

Krusee said the tax rate could be tied to a highway construction cost index or some similar measure. He said it was premature to discuss how much the rate could be raised, although he indicated it would be modest.

The goal of the legislation he is seeking, he added, would be to keep the gasoline tax from "losing money (purchasing power) every year."

Gov. Rick Perry and Lt. Gov. David Dewhurst indicated they were open to the idea.

"We haven't increased our gas tax in years," Dewhurst said. "We've got continuing challenges to put more money into our highways. We'll take a look at it over here in the Senate."

Spokeswoman Kathy Walt said Perry believes the proposal is an "interesting concept that ... the Legislature ought to explore."

She said he still supported toll roads "as part of the mix of addressing transportation needs in this state."

A $1 increase in the gasoline tax, the level cited by the Department of Transportation, was "not feasible," Walt said.

Transportation Commission Chairman Ric Williamson, a Perry appointee, has been discounting the possibility of any gasoline tax increase as he promotes toll roads.

Lawrence Olsen, executive vice president of the Texas Good Roads and Transportation Association, the main highway lobby, said the idea might work. But, he cautioned, there needed to be a guarantee of a minimum tax.

Texas' gasoline tax rate is about average among the states. There hasn't been any serious discussion about indexing it to inflation in about 20 years, Olsen said.