Keep Wisconsin Moving Smart Investments Measurable Results
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1 Keep Wisconsin Moving Smart Investments Measurable Results Wisconsin Transportation Finance and Policy Commission January 2013
2 Investment in transportation Investment in our economy Investment in our quality of life Investment can be equitable and efficient
3 About the Commission Created in state budget to examine the next 10 years of transportation finance in Wisconsin Highway maintenance, rehabilitation and expansion Local aid and assistance programs Transportation revenue Transportation fund debt service Options to achieve balance between revenues, expenditures and debt
4 The Commission considered Wisconsin s multimodal transportation system
5 A growing economy needs mobility but many factors are impacting the system Aging roads and bridges Wear and tear on highways More trucks Heavier trucks Highway capacity concerns Tourism needs Freight needs in all modes Needs of transit, bicycle and pedestrian modes
6 Current state investment: About $3.25 billion annually
7 Current revenue sources
8 Impact on Wisconsin motorists Average annual fuel taxes and registration fees on Wisconsin sedan driven 12,000 miles $254 Lowest average annual cost among neighboring states
9 Upper Midwest fuel tax comparison Current Gasoline Tax (Combined Local, State, Federal) Illinois 60.9 Michigan 60.5 Indiana 59.6 Wisconsin 51.3 Minnesota 47.0 Iowa 40.4 Notes: 1. Data as of October Source: American Petroleum Institute 3. Illinois, Michigan, and Indiana have sales tax on gasoline 4. Fuel price data from AAA
10 Problem flat state revenue forecast Billions of Dollars Per Year
11 Other constraints on funding Purchasing power declining Gas tax not adjusted for inflation Construction costs growing Concerns about future borrowing
12 Debt service as percent of revenues FY02-FY13 Actual / FY14-FY22 Projected Assumes current revenue sources and continuation of bonding at FY 2013 levels
13 System needs attention Deteriorating infrastructure Increased traffic congestion Compromised safety Service needs for transit
14 10-year needs under four scenarios Billions of Dollars Estimated Available Revenues ($25 billion) Disinvestment Preservation Capacity Management 42.1 Multi Modal Enhancements
15 Listening to the public Commission utilized extensive public input opportunities Stakeholder comments Public listening sessions Focus groups Key messages: Safety is top priority Predictable and reliable system Support for all modes Support needs of farms and businesses
16 Focus group input on revenue recommendations Little support for disinvestment future; favor a future with significant improvements to the highway system Acceptance of fee increases when: WisDOT is accountable to the public Increase is associated with safety Increase is associated with improvements where they live Increase is phased-in over time Willing to pay more most favorable to increased fuel tax
17 WisDOT carefully measures results Mobility provide modal choices with minimal congestion and delay Accountability spend taxpayer funds wisely. Be open and transparent Preservation responsibly maintain our existing infrastructure Safety reduce crashes, injuries and fatalities through engineering, education and enforcement Service provide quality service in a timely and professional manner
18 Commission actions Reviewed issues Considered options Collected input Crafted recommendations Documented all activity 16-page summary report 180-page full report Web site with all meeting minutes, presentations and briefing materials
19 Recommendations in four areas Investment levels for various modes and programs Revenue enhancements to meet basic needs Responsible bonding policy for the future Policy changes to enhance efficiency
20 Investment recommendations Support high-priority needs with an additional $479.5 million investment across modes over 10 years State highways Local roads Airports Railroads Harbors Bicycle and pedestrian Transit
21 Investments by program Program Additional Investment Millions of 2012 Dollars State Highways $3,541 State Maintenance/Operations $330 General Transportation Aids $0 Local Highways/Bridges $400 Transit Assistance $363 Aeronautics $20 Freight Rail $15 Passenger Rail $0 Harbors $26 Bicycle/Pedestrian Facilities $100 TOTAL $4,795
22 A responsible investment plan Commission s recommended plan is the minimal investment needed to: Maintain existing road and bridge conditions Provide limited highway modernization Facilitate limited multimodal improvements Investment plan counteracts the existing trends of declining revenue and loss of purchasing power
23 Revenue recommendations an equitable and balanced approach (Millions of dollars over 10 years) Eliminate Sales Tax Exemption on Trade ins, Driver's License Fee Increase, Truck/IRP Reg Fee Increase, 1,439.0 Fuel Tax Increase, 1,594.0 Mileage Based Registration Fee, 2,280.0
24 Fueling our future 10-year plan Raise state gas tax by 5 cents per gallon New mileage-based registration fee for passenger vehicles of about 1 cent per mile Increase commercial vehicle registration fees by 73% Increase fee for eight-year drivers license by $20 Eliminate sales tax exemption on trade-in value of vehicle
25 Revenue impact on the average user The bottom line: +33 cents a day on average
26 Annual mileage fee concept Low tech vs. high tech First 3,000 miles exempt Capped at 20,000 miles Self-reporting system Vehicle owners would certify mileage as part of annual registration process No on-board technology or tracking systems Verification process to provide easy, secure and fair reporting
27 Policy recommendations Increase bonding over 10 years, but keep debt service payments manageable Limit debt service payments to no more than 25% of state transportation revenues by FY 2023 Support proposed state constitutional amendment to protect the integrity of the transportation fund Address the impact of inflation in the future
28 Policy recommendations for local aids Allow regional or local option sales tax for counties under 100,000 population. Put new local road aids into Local Road Improvement Program (LRIP) not General Transportation Aids (GTA) Refocus GTA to emphasize reimbursement for construction and maintenance costs Focus GTA on higher functioning roads Don t use federal funds in the local road program 28
29 Policy recommendations for transit Continue funding transit from the transportation fund Restore the reduction in transit aids Restore transit operating assistance to 2002 percentage levels Create a state transit capital account Allow for the creation of Regional Transportation Authorities (RTAs) with 0.5% sales tax authority Up to 25% of revenue may be used for non-transit purposes Elected board Voter approval
30 Policy recommendations for highways Require life-cycle cost analysis for new major highway projects Implement regional and performance-based maintenance on the state highway system Add design-build and the use of Construction Manager/General Contractor (CMGC) to the WisDOT toolbox
31 Who benefits? Freeway rebuilding projects and road and bridge rehabilitation continue as planned Traffic congestion initiatives to aid safe and predictable travel Infrastructure provided to support economic growth Workers will continue to have safe and effective transit, bicycling or walking services
32 What happens next? What you can do Review the Commission s work Get involved Stay involved Check out the Commission recommendations, reports and findings on-line at Contact the Commission at dottfpcommission@dot.wi.gov or by mail at PO Box 7910, Madison, WI
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