Maine Transportation Needs and Financing
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1 Maine Transportation Needs and Financing Presented by John Melrose, Senior Consultant Eaton Peabody Consulting Group May 2, 2014 Based on policy research done for the MBTA FIX IT NOW campaign
2 MBTA Launches 3 5 Year Effort in Spring 2013 Research and Policy Development State and County Profiles Web Accessible Stakeholder and Public Engagement Coalition Formation Build Public Awareness and Support Advocacy for Law and Budget Changes
3 MaineDOT s Asset Management Data Base Highway Corridor Priority (HCP) 1 6 Customer Service Levels (CSL) A F Safety - Crash history, pavement rutting, paved roadway width and bridge reliability Condition - ride quality, pavement condition, roadway strength and bridge condition Service - posted road, posted bridge and congestion Grading scale variable for HCP classification 1-5
4 Maine s Statutory Goals Focus on HCP 1, 2 and 3 carrying 70% of travel By 2022 HCP 1 and 2 CSL is fair or better By 2027 HCP 3 CSL is fair or better By 2017 HCP 4 pavement program in place to maintain ride quality of fair or better Maintenance pave on a 7-year cycle for HCP 5 By 2015, set priorities and CSL for all modes
5 Other Data Bases MaineDOT/FHWA Structurally Deficient and Functionally Obsolete Bridges FHWA 2012 Highway Statistics Series MaineDOT Multimodal Plans and Inventories Regional and Metro Transportation Planners Key Stakeholder Interviews
6 Highway and Bridge Performance
7 Acceptable Miles (CSL "C" or Better) Priority Road Performance Current Goals 500 Priority 1 & 2: Priority 3: Year
8 Incidence of Substandard Highway 1400 Corridors 1200 Miles Rated D or F for Service, Safety or Condition Service Safety Condition MaineDOT Highway Corridor Priority
9 Crashes per Hundred Million Vehicle Miles of Travel 250 Crash Frequency Based on Highway Condition Priority 1 Priority 2 Priority 3 Priority 4 Priority 5 Rated A, B or C Rated D or F
10 100% 90% 80% Percent of Fair to Poor Pavement By Highway Classification 91% 70% 60% 66% 67% 50% 46% 48% 40% 30% 20% 20% 17% 32% 10% 0% Rural Interstate Rural Principal Arterials Rural Minor Arterials Rural Major Collectors Nation Maine
11 Bridge Deficiencies, Maine and U.S. 25% 20% 15% % Deficient 10% NATION MAINE 5% 0% Structurally Deficient Bridges Functionally Obsolete Bridges Structurally Deficient by Deck Area Functionally Obsolete by Deck Area
12 BridgeInventory by Age, Maine and Nation 12% 10% 8% % of Inventory National Average 41 years old State Average 49 years old 6% MAINE NATION 4% 2% 0% Age of Bridge
13 Highway and Bridge Performance HCP 1 & 2-30% (765 miles) poor/ unacceptable HCP 3 40% (756 miles) poor/unacceptable Crash incidence 75% higher on HCP 1 D&F roads Off I-95, Maine pavement conditions lag U.S. 15% of bridges (355) structurally deficient 18% of bridges (430) functionally obsolete Average bridge 8 years older than U.S. (49 vs 41)
14 HIGHWAY AND BRIDGE FINANCE
15 Federal Highway Trust Fund Projected In billions, by fiscal year Shortfall Actual Projected Year-end balance or shortfall
16 Highway Fund Revenue Biennium $631.7 Million MOTOR VEHICLE REGISTRATION AND FEES 26% FUEL TAXES, NET 69% OTHER REVENUES, TAXES AND FEES 5%
17 Index, with 1975 = 100 What Ails the Highway Fund? No Inflation Protection Cost $2.5 Billion Year General Fund MV Excise Tax Property Tax Highway Fund Inflation Rate
18 30.0% A Declining State Commitment to Transportation 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%
19 Fuel Use, Travel and Fuel Tax Trends Many Variables in Play 30% 25% 20% % change in weighted tax per gallon 15% 10% 5% 0% % change in fuel tax revenue % change in diesel used -5% -10% -15% % change in miles traveled % change in gas used -20%
20 State Share of Highway Responsibility A More Than Full Plate 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 37% 24% 18% 17% 17% 8% 19% 0% Maine New Hampshire Vermont Connecticut Rhode Island Massachusetts National
21 $400 Highway and Bridge Capital Investment Trends $350 "Right-Sized" Statutory Goal Estimate: $348.5M/year $300 $250 $200 Total Cost (millions) $150 $100 $50 $ * 2014* 2015* Calendar Year Bridge Projects Highway Treatment *Projected as of 02/06/13
22 Progress in 2013 State Police HF GF cost sharing fixed $100 million General Fund bond approved $40 million GARVEE bond authorized Continuing success with TIGER grants Lapsed FHWA funds reallocated HF year-end balances reallocated Municipal Partnership Initiative sustained Business Partnership Initiative created
23 Financial Demands Ahead Bridge funding declines after TransCap bond Age cluster of interstate bridges MaineDOT to follow MTA path Nearly half (41%) of pavement preservation need is unfunded Highway reconstruction/rehabilitation miles short by up to two thirds to meet HCP 1-3 goals on time HCP 4 & 5 roads relegated to pavement only
24 Challenging Financing As Well Federal Highway Trust Fund on life support, no motor fuel tax increase since 1993 Motor fuel tax indexing repealed in 2011 Adoption of CAFÉ Standards for fuel economy Stagnant to declining VMT Demographic Shifts Growing gas tax inequity - diverging mpg ratings Federal limits on tolling New Hampshire s low motor fuel tax rate
25 Highway and Bridge Finance: Policy Options
26 Initial Policy Considerations Who pays highway user, general fund or both? Should tax equity, inflation or better exportation of the burden be addressed? What is the future for financial partnering (state-federal, state-local and public-private )? Is there a better way to finance all modes? What are the consequences of changing technology all electronic tolling, rising mpg
27 What Are States Doing? Increasing traditional motor fuel taxes Converting to a sales tax on fuel at wholesale Increasing general fund participation Transitioning to more per mile fees and less per gallon charges Promoting public-private partnerships Adopting motor fuel tax indexing
28 Maine s Motor Fuel Tax Rate Ranking Is there Room to Raise Rates? Jurisdiction Gas Diesel Federal $ $ Average All States $ $ Northeast States Avg. $ $ Mid-Atlantic States Avg. $ $ New Brunswick * $ $ Quebec * $ $ New Hampshire $ $ Maine $ $ * Excise tax only. New Brunswick also has a 13% sales tax and Quebec %. Canada s excise tax is another $.38/gallon. Canada s fuel taxes are about a third of the sale price
29 Maine Turnpike In-State/Out-of-State Shares 70% 64% 60% 52% 50% 48% In-State Patrons Out-of-State Patrons 40% 36% 30% Toll Transactions Net Toll Revenue
30 Gas Taxes Paid A Growing Tax Equity Issue $700 $600 $500 EPA Ratings $400 $300 $200 Dodge Ram Pick-up (15 mpg) Ford Focus Sedan (28 mpg) Toyota Prius (50 mpg) $100 $- 10,000 20,000 30,000 Miles Driven
31 Oregon Fuel Tax Revenue Distribution by MPG Charge per mile (cents) Miles Per Gallon Average 21.6 mpg Source: Oregon Department of Transportation
32 Other Financing Options Toll with EZ Pass beyond current locations Base motor vehicle fees on mpg ratings Cut highway fund debt service by only using general fund supported bonding Create development districts that assess fees based on traffic generation within the district Increase the use of transportation related sales taxes for transportation
33 Aspire-Inspire Complete all HCP 1 & 2 upgrades by 2022 Complete all HCP 3 upgrades by 2027 Modernize infrastructure of Service Centers where 75-80% of the Maine economy resides Address safety deficiencies on HCP 4 Attack bridge age bubble moving Maine to U.S. average on structural deficiencies Adopt special initiative for interstate bridges Support economic game changer projects
34
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