T2040 Financial Strategy Update. Finance Working Group Special Workshop May 25, 2017

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1 T2040 Financial Strategy Update Finance Working Group Special Workshop May 25, 2017

2 Today s Agenda Today s Meeting Filling Gaps Preliminary Recommendations Guidance on June TPB Engagement Session

3 Goal: Preliminary recommendation to discuss with TPB at June meeting Current Law Nov Jan 2017 New Sources Jan Mar 2017 System Expansion Costs Apr May 2017 Maintenance Preservation & Operation Needs Apr May 2017 Plan Balancing June 2017 Working Group recommendation Draft Financial Strategy July 2017 TPB Action on Draft Financial Strategy Final Financial Strategy Dec Feb 2018 Released in the draft T2040 Plan Today s Meeting

4 Maintenance & Preservation Address preservation backlog Maintain & preserve bridges Maintain & preserve roadways Make storm drainage improvements Preserve technology and equipment Maintain & operate existing ferry & transit service Replace transit & ferry infrastructure

5 Local System Investments City and County investments identified in comprehensive plans extended through 2040 Transit service increase of 100% Transit technology and roadside improvements Transit maintenance & operations bases to support new service

6 Regional Capacity Project List 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% Summary of Prioritization Scores $57 billon 312 projects Average $184 million Highest $3.5 billion Lowest $910, % 0.00% Scores at 90% or above Scores between 75-90% Scores between 50-75% Scores between 25-50% Scores below 25% % of projects % of total project cost

7 Total Gap DRAFT T2040 Gap $44-50 billion

8 Transportation Futures Task Force: Dow Constantine Norm Dicks Leonard Forsman Hillary Franz Slade Gorton Kimberly Harris Jeff Johnson Troy McClelland Ed Murray Clare Petrich Shefali Ranganathan Arthur Rubinfeld Mike Sotelo Rich Stolz Marilyn Strickland Matt Yerbic

9 Final Report and Recommendations Maximize Use of Existing Authority in Short Term Pay for Use Include Pricing Component Ensure Flexibility in Use Establish Regional Transportation Authority Achieve Efficiencies

10 Today s Meeting Approach to Developing the Financial Strategy

11 Approach to Updating Strategy Maintain existing strategy of increasing current sources while transitioning to user-based fees in the long-run Address local needs in the near-term Develop a gas tax replacement Use a long-term financing solution that helps manage system and reduces Greenhouse Gases Ensure equity: no disproportionate burdens for different users

12 Approach to Updating Strategy Local Transit Short Term Long Term State Short Term Long Term City & County Short Term Long Term

13 Today s Meeting Local Transit

14 Local Transit Gap DRAFT $2.3B $6.3B $8.7B $8.7 billion gap to fund maintenance, capital and service expansion identified in long range transit plans

15 Current T2040 Strategy Short Term MVET Sales tax increase Fare increase Long Term Transit share of Fuel Tax replacement (Highway System Tolls)

16 Local Transit Adopted Sources Local Transit New Sources Total * Motor Vehicle Excise Tax (transit share) 1.5% $ 1,500 $ 2,700 $ 4,000 Local Transit Sales Tax Increase 0.3% $ 1,800 $ 5,900 $ 7,400 Fare Increase 10% in % in 2030 $ 200 $ 1,000 $ 1,100

17 Local Transit Adopted Sources Local Transit New Sources Total * Highway System Tolls (local transit share) various $ - $ 2,300 $ 2,300 Road Usage Charge (local transit share) TOTAL 1.5 & 2 $ - $ - $ - $ 3,500 $ 11,300 $ 14,800

18 Local Transit New s vs. Gap Estimated Gap $ (2,300) $ (6,300) $ (8,700) Local Transit New Sources TOTAL $ 3,500 11,300 Total * $ $ 14,800

19 Local Transit Financial Strategy DRAFT Questions Include MVET for local transit? Reduce sales taxes in out years? Maintain fare increases? Maintain share of pricing revenues?

20 Today s Meeting State Highways & WSF

21 State Highways & WSF Gap DRAFT $5.8B $4.9B $10.7B $10.7 billion gap to fully fund state highway and WSF maintenance, preservation and capital investments

22 Current T2040 Strategy Short Term Ferry Fare Increases HOT Lane Facility Tolls Long Term WSF share of Fuel Tax replacement (Highway System Tolls) Highway System Tolls Road Usage Charges

23 New State Assumptions New WSF & State Highway Sources Ferry Fare Increases Assumed Rate 10% in % in Total * $ 100 $ 300 $ 400 HOT Lane various $ 2,300 $ 1,200 $ 3,500 Facility Tolls various Contingent upon toll funded projects

24 New State Assumptions New WSF & State Highway Sources Assumed Rate Total * Highway System Tolls (state share) various $ - $ 12,200 $ 12,200 Road Usage Charge (state share) TOTAL 1.5 & 2 $ 900 $ 3,100 $ 4,000 $ 3,200 $ 16,800 $ 20,000

25 New State s vs. Gap Estimated Gap $ (5,800) $ (4,900) $ (10,700) New WSF & State Highway Sources TOTAL , Total * $ $ 16,800 $ 20,000

26 State Highways Financial Strategy DRAFT Questions Increase RROR to 90%? Highway System tolls, or Road Usage Charge? Additional fee increases? Increase fuel tax for maintenance and preservation? Index?

27 Other New Sources New WSF & State Highway Sources Fuel Tax Increase Motor Vehicle Excise Tax License & Registration Fee Increase License Service Fee Increase (RCW dedicated to WSF capital replacement fund) Assumed Rate Total * 0.10 $ 1,200 $ 1,400 $ 2, % $ 2,500 $ 4,500 $ 6,600 $15 $ 400 $ 500 $ 900 $5 $ 100 $ 200 $ 300 Weight Fee Increase 30% $ 500 $ 700 $ 1,200 Electric Vehicle Fee Increase $50 $ 5 $ 8 $ 14 Sales Tax on Fuel.10/gallon $ 1,200 $ 1,400 $ 2,500 Carbon Tax on Fuel TOTAL $15/Ton $ 1,700 $ 2,000 $ 3,600 $ 7,600 $ 10,700 $ 17,600

28 Today s Meeting Cities and Counties

29 City & County Gap DRAFT $11B $15.4B $26.5B $26.5 billion gap to fund city & county preservation & system improvements

30 Current T2040 Strategy Short Term Development Impact fees Parking Surcharge County Road Levy Lift Employee Tax Vehicle License Fees Street Utility District Motor Vehicle Excise Tax Long Term City and County shares of Fuel Tax replacement (Highway System Tolls)

31 City and County Adopted Sources City & County New Sources Regional Transportation Impact Fees (Residential & Non-Residential) Assumed Rate $2900/unit; $2.50/sq ft Total * $ 690 $ 1,450 $ 2,050 Paid-Parking Surcharge 5% $ 500 $ 2,000 $ 2,500 County Road Levy Lift Lift Lid (3%) $ 200 $ 1,000 $ 1,200 Employee Tax (per employee per month) $1 $ 200 $ 300 $ 400 Vehicle License Fees $40 $ 300 $ 1,100 $ 1,400 Street Utility Tax $2 & $4 $ 300 $ 900 $ 1,100 Motor Vehicle Excise Tax (city & county share) 1.5% $ 1,000 $ 1,800 $ 2,700

32 City and County Adopted Sources City & County New Sources Assumed Rate Total * Highway System Tolls (city & county share) various $ - $ 6,900 $ 6,900 Road Usage Charge (city & county share) TOTAL* 1.5 & 2 $ 600 $ 2,200 $ 2,800 $ 3,700 $ 17,300 $ 21,000

33 City & County New s vs. Gap Estimated Gap $ (11,000) $ (15,400) $ (26,500) City & County New Sources TOTAL , Total * $ $ 17,300 $ 21,000

34 City & County Financial Strategy DRAFT Questions Increase fuel tax for maintenance and preservation? Index fuel tax to inflation? Call for Regional Authority?

35 Other New Sources City & County New Sources Assumed Rate Total * Fuel Tax Increase 0.10 $ 1,200 $ 1,400 $ 2,500 License & Registration Fee Increase $15 $ 400 $ 500 $ 900 Electric Vehicle Fee Increase $50 $ 5 $ 8 $ 14 Weight Fee Increase 30% $ 500 $ 700 $ 1,200 Sales Tax on Fuel.10/gallon $ 1,200 $ 1,400 $ 2,500 Carbon Tax on Fuel $15/Ton $ 1,700 $ 2,000 $ 3,600 TOTAL $ 5,000 $ 6,000 $ 10,700

36 Transportation Policy Board June Engagement Pricing: Tolling vs. RUC Local needs: short-term State Highway maintenance and preservation Regional approaches

37 Process & Timeline Current Law Nov Jan 2017 New Sources Jan Mar 2017 System Expansion Costs Apr May 2017 Maintenance Preservation & Operation Needs Apr May 2017 Plan Balancing June 2017 Working Group recommendation Draft Financial Strategy July 2017 TPB Action on Draft Financial Strategy Final Financial Strategy Dec Feb 2018 Released in the draft T2040 Plan

38 Benjamin Brackett Senior Planner Ben Bakkenta Program Manager Thank you.