surface transportation - finance context & issues
DESCRIPTION
Ron EpsteinChief Financial OfficerNYS Department of TransportationTRANSCRIPT
Surface Transportation - Finance Context & Issues
New York Public Transit Association Spring Meeting
Innovation, Sustainability, Public TransitGlens Falls, New York
June 12, 2009
Session Objectives
Provide a status on:
– ARRA
– State Dedicated Highway and Bridge Trust Fund
– Next Five-Year State Transportation Plan
– Federal Highway Trust Fund
– Authorization
Discuss some of the alternative revenue/funding options being discussed
To provide a framework for the future/jumping off point for Rick
ARRA Programs and Funding
Highways- $27.5 billion/NYS share - $1.1 billion
Transit- $8.4 billion/NYS share - $1.3 billion (formula)/$274.3 million New Start (discretionary)
Rail- discretionary grants available
– $8.0 billion for High Speed Rail/State Capital Projects/NYS share - TBD – $1.3 billion for Amtrak
Aviation- $1.3 billion in discretionary grants/NY share - $30.5 million
100 percent federal
How are we doing? - ARRA Progress
Planned Infrastructure Accomplishments Under ARRA
Based on Section 1511 Certifications 1-6/174 projects totaling $523 million (ARRA STIP $ amounts)
What Does This Mean?
Rural Public Transportation ARRA Update
$26.3 million available for projects in non-urbanized areas
State applies on behalf of rural sponsors
Department solicited projects from municipal sponsors this past Spring
Have recommended funding for projects in 36 county, city and authorities and 5 intercity carriers representing over 80 different projects
– 79% of funding will be used for buses/other vehicle replacement– 21% will be for other projects including construction, ITS, shelters, signs
and fareboxes
State Dedicated Highway and Bridge Trust Fund
NYSDOT’s Five-Year Capital Program - 2005-2010
Highways and Bridges $15.246 Billion
Industrial Access $0.045 Billion
CHIPS/Marchiselli $1.681 Billion
Multi-Modal Program $0.350 Billion
Rail/Ports $0.235 Billion
Aviation $0.116 Billion
Upstate Transit $0.235 Billion
Canals $0.050 Billion
Total $17.958 Billion
$17.958 Billion from 4/1/05 to 3/31/10
Finance Plan Construction Dollars Lost to Inflation 2005-2010
$1.8$1.6
$1.5 $1.5 $1.5
$0.3 $0.5$0.6
$0.8
$-
$0.5
$1.0
$1.5
$2.0
$2.5
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
in b
illio
ns
On & Off System $$ Lost to Inflation
Original Value of Lettings $10.2 billionDollars Lost -2.2 billion (22% LOST)Construction - After Inflation $8.0 billion
Based on FHWA BPI Average Growth (2002 to 2006)
$1.8
$1.9 $2.0
$2.1
$2.3
DHBTF Debt Service…
$0
$500
$1,000
$1,500
$2,000
$2,500
00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14
in b
illio
ns
DEDICATED HIGHWAY AND BRIDGE TRUST FUNDDEBT SERVICE AND REVENUE TRENDS
REVENUES AT $2 BILLION/YEAR
DEBT SERVICE
)
Asset Class / Program AreaInvestment
LevelState Highway Bridges 17.4$ Local Highway Bridges 13.2$ State Pavements 40.0$ Selected Local Pavements 3.9$ Traffic & Safety 1.2$ Mobility 2.7$ Pedestrian / Bicycle / ADA 2.0$ Drainage / ITS / Guide Rail / Rest Areas / Fleet & Facilities 15.7$ Public Transit Capital 6.5$ Freight Rail, Passenger Rail, and Ports 5.2$ Aviation 4.3$ Local Capital Aid 8.6$ NYSDOT Other * 4.5$
NYSDOT Capital Program Subtotal 125.2$ Illustrative Major Projects 50.0$
20 Year Total 175.2$ * NYSDOT Other includes Capital Program Management, Bridge Inspection, Emergency Repairs, and Miscellaneous
20 Year Transportation Capital Needs(2007 $ in billions)
Next Five-Year State Transportation Plan
Current NYSDOT multiyear capital program expires in March of 2010. MTA’s 5 year plan expires in December of this year.
Recent legislation addressing MTA financing requires the Department to begin immediately to develop the next multiyear program
Requires objective and performance measures for this program to be submitted to the Governor and Legislature by October 1, 2009.
The Department’s plan also addresses the needs of systems other than the MTA.
We intend to start immediately, as the Governor and Legislature have directed us, to begin to develop our next multiyear, multimodal program.
Next Five-Year State Transportation Plan
We need the help of NYPTA/MPOs/local officials to articulate the need for greater transportation infrastructure investment.
We envision an extensive outreach effort, similar to that undertaken for ARRA funding, to identify the broad spectrum of transportation needs across the state.
The transportation sector needs to reach out beyond our traditional partners to advocate for greater transportation investment,
We are at the beginning of thinking through our strategy to meet the legislative requirement for a new program.
You have my assurance that the Department will continue to work cooperatively with the public transportation industry as move forward on all these activities.
Federal Funding is Key for Capital ProgramFederal Funding is Key for Capital Program
Federal funds comprise 50% of highway capital budgetFederal funds comprise 50% of highway capital budget
Federal funds comprise 25% of transit capital budgetFederal funds comprise 25% of transit capital budget
Decline in Purchasing Power of Motor Fuel Taxes(Based on Inflation since 1993)
0
10
20
30
40
50
60
70
80
90
100
Year
Per
cen
tag
e
Source: Federal Highway Administration
HTF / HA Receipts
25
27
29
31
33
35
37
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Year
$ B
illio
ns CBO Spring 2009
Current 2009 Trend
HTF / HA Outlays
25
30
35
40
45
50
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Year
$ B
illio
ns CBO Spring 2009
Current 2009 Trend
Highway Account of the Highway Trust Fund Cash Balanceas of May 15, 2009
10.05.3 5.5
2.5-1.1 -3.2 -3.4
-6.1-10.5
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
FY 2009 - 2010
$ in b
illion
s
FY 2009 Actual FY 2009 Estimate FY 2010 Estimate
Solvency of the Mass Transit Account
-$25.0
-$20.0
-$15.0
-$10.0
-$5.0
$0.0
$5.0
$10.0
2008 2009 2010 2011 2012 2013 2014
Fiscal Year
Bal
ance
- E
nd o
f Yea
r (B
illio
ns)
Source: The Fiscal Year 2010 Appendix of the Federal Budget
Reduced Highway Trust Fund-Supported Highway and Transit Program Levels Beyond 2009
36.9
41.039.6
44.1
8.6 9.9 9.0 9.5 10.37.1
36.3
5.0
0
5
10
15
20
25
30
35
40
45
50
2005 2006 2007 2008 2009 2010
($ b
illio
ns)
Highway Program (including FMCSA and NHTSA) Transit Program
The Future of Surface Transportation
The good and bad news
– The good news: a high priority given to infrastructure
– Authorization is underway and we have excellent Congressional leadership
– The bad news: The Highway Trust Fund is going broke
– There is no support for increasing user fees
– There are many competing goals at the national level
Needs
Nationally, meeting only about 1/3 of roughly $200 billion required each year to maintain and improve the system
At federal level, also meeting only about 1/3 of needs – we face a $400 billion federal funding gap over next 6 years under current policies and revenues
Financial Outlook - Challenges for 2011-2015Financial Outlook - Challenges for 2011-2015
No easily identifiable funding source to increase transportation No easily identifiable funding source to increase transportation resourcesresources
– Increase or index gas taxIncrease or index gas tax– Identify new tax/user fee revenueIdentify new tax/user fee revenue– Use General Fund revenueUse General Fund revenue
Structural Problem
The current path is unacceptable System demands are outpacing current investments Fuel tax-based funding approach is insufficient at current rates Sustainability of fuel taxes is eroding quickly and unlikely to follow
smooth path, with technology advancement and determination to address global climate change
In the short term, feasible options are limited
Future Revenue Collection
The current system relies on fuel taxes
We have seen a marked decline in revenues
Two National commissions have called for short and long-term solutions
VMT collection systems have come to the forefront of options to consider
29
National Surface Transportation Infrastructure Financing Commission
Short-term Recommendations
Maintain/strengthen integrity of the Highway Trust Fund
Increase existing HTF revenue sources:
– Modest increases in fuel taxes (10¢ for gas, 15¢ for diesel)– Increase (double) the Heavy Vehicle Use Tax (HVUT)– Maintain existing tractor/trailer sales tax and truck tire tax– Index motor fuels tax, HVUT, and truck tire excise tax
30
National Surface Transportation Infrastructure Financing Commission
Begin VMT Transition
Begin transition as soon as possible; 2020 as implementation goal
Set federal fee at level to fund federal share of needs (approx. 2¢ per mile for autos under current policies and estimates)
31
National Surface Transportation Infrastructure Financing Commission
Non-Federal Investment Options
Tolling and Other Direct User Fee Initiatives
Federal Assistance, Financing Incentives, Tax Policy
Private Sector Financial Participation (PPPs)
NYS Position - FundingNYS Position - Funding
Strong federal roleStrong federal role
Double federal funding to $575 billionDouble federal funding to $575 billion
– Highways- $375 billionHighways- $375 billion– Transit- $123 billionTransit- $123 billion– Freight- $42 billionFreight- $42 billion– Intercity Passenger Rail- $35 billionIntercity Passenger Rail- $35 billion
Diversified portfolio of revenueDiversified portfolio of revenue
NYS Position - Fix it FirstNYS Position - Fix it First
Bridge ProgramBridge Program Transit ProgramTransit Program CMAQCMAQ Projects of National and Regional SignificanceProjects of National and Regional Significance Interstate ReconstructionInterstate Reconstruction
NYS Position - TransitNYS Position - Transit
Retain Transit as a stand-alone programRetain Transit as a stand-alone program
Support APTA program consolidationSupport APTA program consolidation
– Simplifies Fixed Guideway programSimplifies Fixed Guideway program– Meets the needs of the oldest and largest systemsMeets the needs of the oldest and largest systems
NYS Position - CMAQNYS Position - CMAQ
Retain as a stand-alone programRetain as a stand-alone program
Continue emphasis on air qualityContinue emphasis on air quality
Extend time period to use CMAQ for operations beyond three Extend time period to use CMAQ for operations beyond three years, as long as net air quality benefit can be demonstratedyears, as long as net air quality benefit can be demonstrated
NYS Position - Policies NYS Position - Policies
Align Transportation, Energy, and Climate Change Policies Align Transportation, Energy, and Climate Change Policies
– NY has lowest per capita gas consumption of any stateNY has lowest per capita gas consumption of any state– Equity Bonus rewards gas consumptionEquity Bonus rewards gas consumption– Equity Bonus is now the largest highway programEquity Bonus is now the largest highway program– Need a new approachNeed a new approach
Questions…?
Ron Epstein, Director
Office of Finance
New York State Department of Transportation
50 Wolf Road
Albany, New York 12232
(518) 457-8362