T2040 Financial Strategy Update. Finance Working Group February 9, 2017

Transcription

1 T2040 Financial Strategy Update Finance Working Group February 9, 2017

2 Today s Agenda Today s Meeting Current law revenue: Recap of Policy Decisions New Revenue Assumptions in the current T2040 Strategy Transportation Futures Task Force Recommendations New Revenues: Introduction & Evaluation Criteria

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

4 Today s Meeting Current Law Revenue: Recap of Policy Decisions

5 Current Law Revenue Assumption Federal Contributions FWG Recommendation: Reflect historic and continued growth in the Federal surface transportation program in the T2040 Financial Strategy Assume 2.5% rate of growth (inflation) through 2020 and 1% rate of growth after 2020 through 2040 Will revisit this decision in 2020 as part of the next plan update

6 Current Law Revenue Assumption Counties FWG Recommendation: Assume that existing constraints on the growth of property tax receipts will remain in effect within the current law revenue component of the T2040 financial strategy

7 Current Law Revenue Assumption Cities FWG Recommendation: Reduce the cap on General Fund contributions to Transportation to 40%

8 Current Law Revenue Assumption Local Transit FWG Recommendation: Assume that the historic farebox recovery ratios will be maintained into the future Assume a 28% farebox recovery ratio, in line with the most recent datapoint

9 Current Law Revenue Assumption Local Transit FWG Recommendation: Incorporate the 2015 Regional Economic Forecast for retail sales into the Transportation 2040 update

10 Current Law Revenue Assumption Sound Transit FWG Recommendation: Incorporate Sound Transit s latest financial assumptions into the Transportation 2040 update

11 Current Law Revenue Assumption State Highways FWG Recommendation: Continue to use the PSRC fuel consumption model for T2040 fuel tax estimates

12 Current Law Revenue Assumption State Highways FWG Recommendation: Reflect the historic rate of return to the region Assume a 60% ** rate of return ( ** - Interim rate subject to changes based on review/research with WSDOT )

13 Current Law Revenue Assumption Washington State Ferries FWG Recommendation: Incorporate Washington State Ferries' latest financial assumptions into the Transportation 2040 update

14 Current Law Revenue Assumption Ports & Tribal Contributions FWG Recommendation: Reach out to Ports to better understand their contributions and transportation investments Incorporate tribal investments as is into the Transportation 2040 update

15 Today s Meeting Transportation 2040 New Revenue Assumptions

16 Dedicated New State Revenue Assumptions Dedicated New State Revenues (Incremental Change) Fuel Tax Portion of fuel tax increases bonded to pay for early DOT projects and repaid through dedicated fuel tax increases through 2040* Tolls Toll Financed, Facility, HOT Lanes Facility, HOT Network - Fish Passage Barrier Removal Program New non-dot revenues sufficient to address all non-project related fish passage barrier removal issues * In final decade of plan, fuel tax is replaced with user fee revenues. Repayment of bonds shifts from fuel tax to user fee revenues.

17 Dedicated New Transit & Ferry Revenue Assumptions Dedicated New Transit & Ferry Revenues (Incremental Change) MVET (transit portion) 0.9% - - Sales Tax (relative to 2010) -.4%.1% KT Sales Tax Increase Supporting POF Service.1% - - KCFD Property Tax Increase Supporting POF Service Sufficient to fund W. Seattle & Vashon Routes Transit Fare Increase (relative to 2010) 10% 10% - Ferry Fare Increase (relative to 2010) 10% - 10%

18 Dedicated New City & County Revenue Assumptions Dedicated New City & County Revenues (Incremental Changes) Regional Impact Fees ($/unit and job space) - $1,700 - Regional Parking Surcharge - 2.5% 2.5% Road Levy (property tax) - Lift Lid Lift Lid Employee Tax (per employee per month) - $1 $1 Vehicle License Fees $20 $20 - Street Utility (per household per month) - $2 $2 MVET (city and county portion) 0.6% - -

19 Undedicated New Revenue Assumptions Undedicated New Revenues (Incremental Changes) Fuel Tax (relative to 2010) $.10 $.05 - Tolls - - Limited Access Facilities Road Usage Charge - $.015/VMT $.005/VMT Note: Undedicated new revenues have been allocated within existing constraints. In practice these revenues would likely be dedicated to specific projects/programs, however these have yet to be Identified.

20 Today s Meeting Transportation Futures Task Force Recommendations

21 Final Report and Recommendations

22 Five Scenarios 1. Transportation 2040 Plan 2. Flat-Rate Pay Per Mile Charge 3. Peak/Off Peak Pay Per Mile Charge 4. Major Emissions Fee 5. Mixed Sources

23 Transportation 2040 Fuel Tax Increases of 5 by 2020, and 10 by 2030 raise approximately $6.7B through Highway System Tolling begins in 2031, raising $2.3B annually for a total of $22.8B through Rates average 15 per mile on freeway. Average cost of highway trip $1.50 beginning in Pay Per Mile Fee begins to replace fuel tax in Through 2040, this raises $5.9B, offsetting decline of $5.2B in fuel tax revenues, for a net of $700M. Fare Increases modest transit and ferry fare increases (10%-20%), and modest sales tax increases in 2020 and 2030 (0.1%-0.3%) to support transit investments. MVET 1.5% motor vehicle excise tax in support of city, county, and transit investments beginning in 2016.

24 Flat-Rate Pay Per Mile Flat-rate Pay Per Mile Charge of 5 per mile on all roads beginning in 2026 (and rising with inflation), raising approximately $22.6B through 2040, with average cost approximately 25 to 50 per automobile trip. Transportation Utility Districts are implemented beginning in 2021, raising approximately $310 per year for a total of $6.2B through 2040, or approximately 5 per trip. Impact Fees are implemented beginning in 2021, raising approximately $66M per year for a total of $1.3B through 2040.

25 Peak/Off-Peak Pay Per Mile Peak/Off-Peak Pay Per Mile Charge of 20 per mile peak and 2 per mile off-peak on all roads beginning in 2026 (and rising with inflation), raising approximately $22.6B through 2040, with average cost approximately 20 to 60 per automobile trip. Transportation Utility Districts are implemented beginning in 2021, raising approximately $310 per year for a total of $6.2B through 2040, or approximately 5 per trip. Impact Fees are implemented beginning in 2021, raising approximately $66M per year for a total of $1.3B through 2040.

26 Major Emissions Fee Major Emission Fee on Carbon Use begins in 2021, raising approximately $15.2B through 2040, with average cost 15 to 30 per automobile trip. Flat-rate Pay Per Mile Charge of 5 per mile on all roads beginning in 2026 (and rising with inflation), raising approximately $22.6B through 2040, with average cost approximately 25 to 50 per automobile trip. Impact Fees are implemented beginning in 2021, raising approximately $70M per year for a total of $1.5B through Transportation Sales Taxes are reduced, with initial 0.4% reduction from , and up to 1% sales tax reduction by 2031.

27 Mixed Sources Flat-rate Pay Per Mile Charge of 4 per mile on all roads beginning in 2026 (rising with inflation), raising approximately $17.6B through 2040, with average cost approximately 20 to 40 per automobile trip. Moderate Emission Fee on Carbon Use begins in 2021, raising approximately $7.8B through 2040, with average cost 10 to 20 per automobile trip. Transportation Utility Districts are implemented beginning in 2021, raising approximately $310 per year for a total of $6.2B through 2040, or approximately 5 per trip. Impact Fees are implemented beginning in 2021, raising approximately $70M per year for a total of $1.5B through Reduction in State Fuel Tax with non-bonded portion phased out in 2031, resulting in an approximate reduction of $3.0B in total revenue, or 20 per gallon.

28 Today s Meeting Performance Measures

29 Regional Performance Miles Driven per Person per Day Hours of Congestion per Person per Year Tons of Emissions per Person per Year

30 Hwy Peak Period Travel Time I-5: Everett to Seattle I-405: Lynnwood to Bellevue SR 520: Seattle to Redmond I-5: Tacoma to Seattle

31 Additional Cost to Drive to Work The average roundtrip cost to drive to work today is about $5.30 per day. Lower Income Household (< $34k) Lower-Middle Income Household ($34k-$68k) Upper-Middle Income Household ($68k-$102k) Higher Income Household (> $102k)

32 Transportation 2040 Major Funding Source is Highway Tolling. Peak Period Toll Rates vary based on congestion but average about $0.40/mi. Higher Income households have the highest average additional work trip costs ($3.60 compared to $0.30 for a Lower-Income Household). Tolling improves speeds on the highways to levels at or below today s conditions.

33 Flat-Rate Pay Per Mile Major Funding Source is Pay per Mile for all vehicle trips, regardless of time of day or facility. Peak and Off Peak Period Pay per Mile Rates could average around an additional $0.05/mi and fill the financial gap. Lower income households could pay on average $0.80 per day more to drive to work, higher income households around $1.90.

34 Peak/Off-Peak Pay Per Mile Major Funding Source is Pay per Mile with Peak and Off Peak Period Pay per Mile Rates that could average around $0.20/$0.02 more per mi and fill the gap. Lower income households could pay on average $0.90 per day more to drive to work, higher income households around $2.20. Transportation Performance could be improved with different approaches to the pay per mile rates.

35 Major Emissions Fee Major Funding Sources are a combination of Pay per Mile for all vehicle trips and an Emissions Fee that could average around $0.08 per mile more and fill the gap. Allows for a sales tax rebate (could start as early as 2021 at 0.3% and could increase to ~1% by 2031). Lower income households could pay on average $1.20 per day more to drive to work, higher income households around $2.60.

36 Mixed Sources Major Funding Sources are a combination of Pay per Mile for all vehicle trips and an Emissions Fee that could average around $0.06 per mile more and fill the gap. Non-Bonded portion of the State Fuel Tax could be rolled back in Lower income households could pay on average $1.00 per day more to drive to work, higher income households around $2.20.

37 Approach Meet overall funding needs Fund local needs sooner Use immediately available sources now; phase in longer-term new revenue Goals: long-term sustainable sources & performance

38 Final Report and Recommendations Maximize Use of Existing Authority Establish Regional Transportation Authority Achieve Efficiencies Pay for Use Flexibility in Expenditures

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40 Today s Meeting Evaluation Criteria

41 Evaluation Criteria Principles 1. Sufficient 2. Diverse, Stable, and Predictable 3. Support the Region s Vision 4. Equity 5. Feasible

42 Next Steps Next meeting March 9, 2017, 12 2 PM, PSRC Conference Room Meeting agenda Continued discussion of New Revenues Website

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

44 Today s Meeting Questions?

45 Pavithra Parthasarathi Principal Planner Benjamin Brackett Senior Planner Ben Bakkenta Program Manager Thank you.

46 Today s Meeting Additional Slides