Comparison of Local Transportation Revenue Sources in Selected States

Transcription

1 Comparison of Local Transportation Revenue Sources in Selected States 21 st Century Transportation Committee Rodney Bizzell NC General Assembly Fiscal Research Division 1

2 Goals of Presentation Examine use of selected revenue sources in other states Is the source used for transportation? Is the source dedicated or earmarked? Compare to NC when possible Amount of collections Types of projects funded Extent of use 2

3 Comparison States Focus on Southern States Florida Georgia North Carolina South Carolina Tennessee Texas Virginia Comparison data is limited due to the wide variety of local sources of revenue (lack of conformity in implementation, limited data collection at state level) Summary of existing research from FHWA, Commerce Clearinghouse, University of California Transportation Center and Dillon Associates. 3

4 Revenue Sources Examined Property Tax Special Assessments Impact Fees Sales Taxes Vehicle Registration Fees Land Transfer Taxes Rental Car Taxes 4

5 Property Taxes Most important and universal local revenue source in the United States Property taxes are used to fund streets in all 50 states Widely unpopular 5

6 Property Taxes While some states fund transportation through property tax earmarks, most use general fund sources, which include property taxes States use a variety of levels of differentiation in tax systems to account for various expenditure types. Examples: Virginia has several special taxing districts for roads Texas has six different types of property tax levies for transportation, including road maintenance, operations, bond debt and road types. The City of Raleigh recently dedicated a portion of a property tax increase for debt service for street bonds. 6

7 Property Taxes and General Fund Revenues used for Transportation (Thousands of $) STATE APPROPRATIONS FROM GENERAL FUNDS PROPERTY TAXES AND SPECIAL ASSESSMENTS Florida Georgia North Carolina South Carolina Tennessee Texas Virginia 489, , , , ,691 1,300, , , ,667 4,057 26,027 6,396 1,058,894 37,000 Average 512, ,452 * Data is from FHWA - October

8 Property Taxes and General Fund Revenues used for Transportation Per Capita ($) STATE APPROPRATIONS FROM GENERAL FUNDS PROPERTY TAXES AND SPECIAL ASSESSMENTS Florida Georgia North Carolina South Carolina Tennessee Texas Virginia Average * Data is from FHWA - October

9 Special Assessments as Transportation Funding Sources Counties in several states may: 1) Establish districts to levy special assessments to build sewers, streets and other types of public works projects 2) Allow assessments to be imposed on private developers to pay for streets or repairs. 9

10 Use of Special Assessments in Selected States North Carolina - H1770 enables cities and counties to finance transportation facilities through revenue bonds to be paid off with special assessments South Carolina cities may use special assessments to fund streets and sidewalks Tennessee - used to repay road bonds Virginia - uses special assessments to fund streets/roads within service districts. 10

11 Impact Fees Impact fees first emerged as an alternative to property taxes in the late 1970 s About 60 percent of all cities with over 25,000 residents and almost 40 percent of all metropolitan counties use some form of impact fees. In California and Florida, the extent of cities and counties using impact fees is at 90 and 83 percent, respectively. Impact fees have continued to significantly increase in popularity and usage. Source: Dillon Associates ( 11

12 How Much is the Average Impact Fee? Impact fees vary greatly by region and facility. Fees are generally highest in Western states (California, Oregon, Washington and Arizona) and lowest in South Central states (Texas, Oklahoma, Arkansas and Louisiana). Fees are usually highest for school facilities (often over $10,000 per dwelling) and lowest for police facilities (often under $500 per dwelling). Source: Dillon Associates ( 12

13 IMPACT FEES ON A SINGLE-FAMILY UNIT (3-BR, 2,000 sf, on 10,000 sq. ft. lot at density of 4 UPA and value of $200,000) STATE JURISDICTIONS ROADS Florida Georgia North Carolina South Carolina Tennessee Texas Virginia , ,519 1,452 13,621 Average ,224 * National Impact Fee Survey:

14 Local Option Sales Tax Broad base allows low rate in most states Non-residents pay significant portion Over 30 states have local option sales taxes for transportation purposes. Sales taxes have funded several light rail projects. Local sales taxes allow local governments to generate substantial revenues to fund particular projects. 14

15 Examples of Transportation Funding through Local Option Sales Taxes NC ½% Mecklenburg County FL - Dedicated tax (up to 1%) in Broward/Dade and surrounding counties for transit/roads GA- Dedicated tax (1%) in MARTA counties, roads in more than 25% of counties SC - Specified Transportation Projects TN 9 counties earmark a small portion of local sales tax (up to 2.75%) for roads TX 10 Transit Districts (rates vary from ¼% to 1%) 15

16 Vehicle Registration Taxes Most states authorize some type of annual vehicle license or registration tax In many states, the implementation is delegated to the local government Used for many different purposes, including general government, highway construction, public transit, air pollution control and public safety programs. 16

17 Vehicle Registration Taxes Of selected states, only North Carolina, South Carolina and Texas specifically designate vehicle registration taxes for roads or transit. 17

18 Land Transfer Taxes Typically used for general government purposes or a variety of dedicated purposes. Florida has 0.6% local surtax NC has 0.4% local option South Carolina has 0.55% county tax Virginia has local option for up to 1/3 state rate (0.25%) 18

19 Rental Car Taxes Enterprise estimates about 80 special car rental taxes not including airport fees have been imposed across the USA, and at least 44 proposals are pending. Some examples: Performing arts center and culinary institute in Clark County, NV (2% tax). Sports arena in Dallas (5% tax) Teacher salaries in Arkansas (10% tax) In Wisconsin and several municipalities, the rental car tax is a key funding source for public transportation projects. Source: USA Today (4/18/2006) 19

20 Case Study: Northern Virginia In 2007 the Northern Virginia Transportation Authority (NVTA) approved the implementation of seven taxes and fees, as authorized by the General Assembly, which would have generated approximately $300 million annually in new transportation funding for Northern Virginia The Virginia Supreme Court later ruled the taxing authority was unconstitutional Taxes would have funded a variety of road, transit, bicycle and pedestrian projects. 20

21 The Seven Taxes and Fees are: Congestion Relief Fee (Grantor s Tax) $.40 cents/per $100 valuation Motor Vehicle Rental Tax 2% of rental rate Transient Occupancy Tax 2% of hotel rate Safety Inspection Fee $10.00 annually Sales and Use Tax on Auto Repairs 5% of labor charges Regional Registration Fee $10.00 annually Initial Vehicle Registration Fee 1 % of value (one time) 21

22 Conclusions All of the revenue sources examined are used for a variety of purposes, including transportation funding Greater reliance on local revenues Shift from user taxes to sales taxes Vehicle registration taxes remain popular, however, they have been eliminated in some states Increased use of development fees in fast-growing areas 22