Transportation leadership you can trust.

prepared forprepared for

Transportation Planning BoardTransportation Planning Board

presented bypresented byArlee RenoArlee Reno

Cambridge Systematics, Inc.Cambridge Systematics, Inc.

in cooperation within cooperation withK.T. AnalyticsK.T. Analytics

July 7, 2006July 7, 2006

Progress Report on the Region’s Short Term Transportation Funding Needs

Item 3

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Purpose of Progress Report

Report on What Has Happened Since a “Time To Act”

• Program and Project Actions Since 2004

• Finance Actions Since 2004

Update on Challenges Remaining

• Construction Costs are Increasing

• Congestion Continues to Grow both Highway and Transit

Identify “Potential Solutions” - drawing on a review of promising national, state, and regional funding proposals

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Progress Since 2004 “Time To Act”Programmed Project Actions since 2004

Regional: Initiated the Regional Transportation Coordination Program to facilitate coordination and information sharing among the region’s transportation agencies

Suburban Maryland: Intercounty Connector is moving forward with the project planning phase completed and funds identified.

Northern Virginia: Dulles Corridor MOU signed with MWAA and project is also moving forward

DC: Enhanced existing transit services by adding a circulator and opening the New York Avenue station

WMATA: Approval of Metro Matters will buy additional buses and rail cars and other improvements

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Progress Since 2004 “Time To Act”Finance Actions since 2004

Metro Matters funding has been committed, but transit ridership constraint on Metrorail core capacity still applied beyond 2010

Davis Bill for funding Metro capacity and rehabilitation for existing system introduced

Federal revenues for region increased under SAFETEA-LU ( but not dramatically: inflation has eroded all resources

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Street and highway construction costs have gone up the most drastically over the past few years

Update on ChallengesConstruction costs are increasing

* Table shows the PPI rates over the past twenty years as indexed

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Highway - Total lane miles of congestion have increased significantly since 2003 throughout the AM and PM Peak hours

• Greatest increase (64%) in the first hour of the PM peak (4:30 to 5:30)

Transit – Crowding at peak and core capacity continues to be limited

Update on ChallengesCongestion Continues to Increase

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Potential Solutions

Wide array of candidate revenue sources, but there is not a one size fits all solution for all agencies

Fuel Taxes

• MD, VD, and DC are below the national average

• States such as Kentucky, Maine, Nebraska, New York, North Carolina, West Virginia, and Wisconsin already have variable rates, usually responding to price indices

Tolling, Pricing, and Other Direct User Fees

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Candidate State and Local Revenue Sources Scope Yield

Locations UsedSpecific Tool Primary Purpose Program ProjectPotential

Yield

I. Revenue Generation

Fuel Taxes

Raising the motor fuel excise (per gallon) tax X   H All states, federal

Indexing of the motor fuel tax (can be indexed to inflation or to other factors such as program costs) X   H FL, KY, ME, NE, NY, NC, PA, WV

Sales tax on motor fuel X   H CA, GA, HI, IL, IN, MI, NY

Other motor fuel-related taxes X   H NY, PA

Registration and Vehicle Fees

Raising registration or related fees X   H All states

Excise tax on vehicle sales X   H KS, NC, NE, MN, MO, OK, SD

Tolling and Pricing, and Other User Fees

Tolling new or existing roads and bridges   X M TX, FL, VA

HOT lanes, express toll lanes, truck toll lanes   X M CA, CO, GA, MN, TX

VMT fees X   H OR testing, 15 state pooled fund

Transit fees (fares, park-and-ride fees, other) X   H All transit agencies

Local Option and Beneficiary charges

Beneficiary charges/value capture (special assessment impact fees) and tax increment financing   X L CA, FL, OR

Permitting local option taxes for highway and transit improvements X X M Multiple

General Revenue Sources Most States and localities

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Candidate State and Local Financing Techniques

Scope Yield

Locations UsedSpecific Tool Primary Purpose Program ProjectPotential

Yield

II. Financing Techniques

Leveraging of Federal Grants

GARVEE bonds x x AK, AK, AR, AZ, CA, CO, KY, ME, MT, NM, ND, OH, OK, PR, RI, VI

State Infrastructure Banks x x AL, AZ, AR, CA, CO, DE, FL, IN, IA, ME, MI, MN, MO, NE, NM, NY, NC, ND, OH, OR, PA, PR, RI, SC, SD, TN, TX, UT, VT, VA, WA, WI, WY

Section 129 Loans x TX

Leveraging of User Fees or Tax Revenues with Credit Instruments

TIFIA/RRIF Assistance X   CA, NV, TX, NY, SC, FL, PR, DE, DC, MD, VA, LA, RI, IA, ME, MN, TN, AK, MO

Leveraging of User Fees and/or Tax Revenues with Tax Subsidies

   

Private activity bonds   X   None to date ($15 billion cap). Long history of PAB use for airports, seaports, etc.

Tax credit bonds X X Not yet enacted for transportation; current tax credit bond programs exist for school, housing

State/Local Initiatives  

Leveraging of Tax Revenues (Shadow tolls/Availability Payments)

  X   United Kingdom, Finland, Germany, FL pending

Leveraging of User Fees (Asset Leases) X     IL, IN

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Candidate State and Local Management Techniques

Scope Yield

Locations UsedSpecific Tool Primary Purpose Program ProjectPotential

Yield

III. Management Techniques 

Federal Initiatives        

Grant management (Cash Flow) tools, including flexible match, tapered match, toll credits, AC/PCAC (SEP‑15)

  X   Many

State/Local Initiatives        

Public-private partnerships (PPP) for project delivery   X   AL, AK, AZ, CA, CO, DE, FL, GA, IN, LA, MD, MN,MO, NV, NC, OR, PR, SC, TX, UT, VA, WA

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Potential SolutionsA Longer Term Option – VMT Fees

Oregon’s field test of technologies for collecting VMT fees is an innovative “transition” strategy

VMT fees are collected at the pump, with a record of miles since the last fueling rather than gallons used

No more private information is collected than during current fuel purchases

Additional testing of how a VMT fee system works will be necessary to examine public acceptability

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States that Authorize Local Option Gasoline Taxes for Transportation

Source: Institute of Transportation Studies, University of California at Berkeley, “Local Option Transportation Taxes in the United States,” March 2001.

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States that Authorize Local Option Sales Taxes for Transportation

Source: Institute of Transportation Studies, University of California at Berkeley, “Local Option Transportation Taxes in the United States,” March 2001.

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PPP’s Have Been Used for Transportation Projects PPP’s Have Been Used for Transportation Projects in a Number of States in a Number of States

Partial List of Financed Projects; Source: Public Works Financing.

Reno RailCorridor

SR 125Toll Road

-Hudson-Bergen Light Rail Line

Chicago SkywayAsset Sale

Dulles Greenway

Miami Intermodal Center

Central TexasTurnpike

PocahontasParkway

Camden Trenton Light Rail Line

Project Location

Intermodal Projects in Green

Highway Projects in Blue

Transit Projects in Yellow

San Joaquin HillsToll Road

Foothill EasternToll Road

Alameda Corridor

-Trans TexasCorridor

Denver E-470NorthwestParkway

NM 44 (US 550)

Southern Connector

Hiawatha Light Rail Line Jamaica JFK AirtrainTacoma Narrows

Bridge

Osceola Parkway

Las Vegas Monorail

I-15 Reconstruction

AZ-17

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States Issuing Debt for Transportation PurposesG.O. versus Special Revenue*

PRStates with Special Revenue Bond credit for transportation (excluding GARVEE Bonds)

States with General Obligation Debt Outstanding for Highway or Transit Purposes

* Excludes GARVEE Bonds backed by Federal-aid)

Source: FHWA Highway Statistics, 2004, Bond Rating Agencies (data being confirmed)

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Next Steps

Working Group has made suggestions on the draft progress report

Receive comments and suggestions from the Technical Committee (today’s goal)

Prepare final for TPB review