Indiana Transportation Funding Update

Transcription

1 Indiana Transportation Funding Update Presented at the 2016 Purdue Road School Dan Brassard Chief Financial Officer, INDOT March 8, 2016

2 Transportation Funding Proposals: Indiana is NOT Unique Across the country, 23 State s are Considering Proposals for Increased Funding w/44 bills Introduced thus far in 2016 Legislative Sessions Solutions include: Higher Gasoline & Diesel Taxes Taxes on Alternatively-fueled Vehicles Taxes/Increased Fees on Electric Vehicles Sales Taxes Taxes Indexed for Inflation, Floors Installed Bonding Involves Both State & Local Jurisdictions 2

3 FAST Act Passed in December 2015, Fixing America s Surface Transportation (FAST) Act authorizes Federal highway, highway safety, transit, and rail programs for five years from Federal fiscal years (FY) 2016 through 2020 First long-term authorization act in a decade

4 Highlights Authorizes $305 billion from both the Highway Trust Fund and the General Fund Builds on the program structure of the previous act, MAP-21 Creates a National Multimodal Freight Policy to improve the movement of freight on the National Freight Network Streamlines project delivery through an improved review and permitting process

5 FAST Act Funding Total Funding Appropriated by the FAST Act over Federal FY Program Total Funding under FAST Act (billions) Federal Highway Administration $226.3 Federal Transit Administration $61.1 Federal Railroad Administration $10.3 National Highway Traffic Safety Administration $4.7 Other $2.6 Total $305.0

6 Highway Funding - Indiana The FAST Act will result in an estimated net increase of $417M in federal highway funding for Indiana 75% allocated to State ($313M) and 25% allocated to LPA s ($104M) (In millions) $1,000 $980 $960 $940 $920 $900 $880 $860 $840 $820 $800 $780 $899 $917 $937 $958 (1) Before post-apportionment set asides; before penalties; before sequestration. (2) Obligation Authority (OA) estimated using national average of 93% of Apportionment. Note, actual % of OA apportionment can vary by year. $981 $855 $855 $855 $855 $855 FFY 2016 FFY 2017 FFY 2018 FFY 2019 FFY 2020 Estimated Obligation Authority under the FAST Act Obligation Authority under MAP-21

7 Key Program Changes - Highway The FAST Act creates a Surface Transportation Block Grant Program (STBGP) Previously titled the Surface Transportation Program (STP) under MAP-21 Increases the % of funds that go to urbanized areas in 1% increments annually The Transportation Alternatives Program (TAP) and Recreational Trails (RT) Program were changed to now be apportioned as a percentage of STBGP No increase in RT and a less than 2% increase in TAP

8 Key Program Changes - Freight The FAST Act creates a Nat l Multimodal Freight Policy. 1. The National Freight Program New core program Use of the apportionment is governed by the number of Primary Highway Freight System miles in a State in proportion to total national freight miles Indiana has over 2% of total national freight miles Per (Sec. 167) of the FAST Act this would suggest funding must be spent on the primary freight system, critical rural corridors, or critical urban corridors only IN Division of FHWA and INDOT still reviewing guidance which may further clarify Recommends a freight advisory committee and requires a state freight investment plan be developed by State DOT s

9 Key Program Changes - Freight The FAST Act creates a Nat l Multimodal Freight Policy. 2. Nationally Significant Freight and Highway Projects Discretionary Program Provides assistance for projects of national or regional significance Requires a grant application and covers 60% of the project Congress can pull back funding after the Secretary of Transportation approves a grant

10 Key Program Changes - Rail The FAST Act includes authorization for rail programs for the first time in the surface transportation bill. $10.4 billion in total rail program funding under the FAST Act are authorized for five years from the General Fund: $8.2 billion to Amtrak $2.2 billion for the FRA programs.

11 Ongoing Challenges As noted by AASHTO - The bill contains language to rescind $7.6 billion of highway program contract authority in July This provision could restrict the ability of States to program Federal dollars. In past years rescissions affected prior ACT apportionments more than current year ACT apportionments due to the difference between the amount of contract authority a state is given and the amount of obligation limitation a state can utilize against said contract authority.

12 Ongoing Challenges As noted by AASHTO - Long-term, sustainable funding for transportation is yet to be achieved. Because the bill relies on $70 billion of General Fund support, the expected annual gap between Highway Trust Fund income and spending in 2021 is expected to reach $20 billion.

13 USA Transportation Infrastructure Conditions: How Does Indiana Rank? Structurally Deficient/Functionally Obsolete Bridges: National Average: 25.3% Indiana Average: 22.0% Rank Among States: 21 st (vs. Best Minnesota) Information from USDOT, FHWA, and ASCE Report on Infrastructure

14 USA Transportation Infrastructure Conditions: How Does Indiana Rank? Structurally Deficient/Functionally Obsolete Bridges: National Average: 25.3% Indiana Average: 22.0% Rank Among States: 21 st (vs. Best Minnesota) Extra Vehicle Repairs (Roads Need Fixing): National Avg Per Motorist: $300 Indiana Average: $225 Rank Among States: 11 th (vs. Best Georgia) Information from USDOT, FHWA, and ASCE Report on Infrastructure

15 USA Transportation Infrastructure Conditions: How Does Indiana Rank? Structurally Deficient/Functionally Obsolete Bridges: National Average: 25.3% Indiana Average: 22.0% Rank Among States: 21 st (vs. Best Minnesota) Extra Vehicle Repairs (Roads Need Fixing): National Avg Per Motorist: $300 Indiana Average: $225 Rank Among States: 11 th (vs. Best Georgia) Percentage of Roads in Poor/Mediocre Condition: National Average: 49.0% Indiana Average: 17.0% Rank Among States: 1 st (vs. Best Indiana) Information from USDOT, FHWA, and ASCE Report on Infrastructure

16 Traditional Transportation Funding: A Confluence of Diminishing Returns Federal Gas Tax Established in 1932 (Herbert Hoover) $.01/gallon Average Car = 9 miles/gallon Interstate System Implemented in 1956 = $.03/gallon (Fed Gas Tax) Average car = 14 miles/gallon Today = $.184/gallon (Fed Gas Tax); Average Car = 23 miles/gallon Vehicle Miles Traveled has Leveled off in 21 st Century CAFÉ Standards: Light Duty Vehicles 54.5 MPG by Model Year

17 Traditional Transportation Funding: A Confluence of Diminishing Returns Stated Another Way Gas Tax, if Indexed to CPI since 1956 would be: $.265/gallon instead of $.184/gallon (Worth $14 Billion Annually a 30% Increase Federal Funding) Average Gallons Consumed per Mile has Decreased by 52% since 1956 One Mile of Interstate in 1956 cost $650k. Today it costs $14,000,000 to $23,000,000/per mile depending on circumstances Indiana s Vehicle Miles Traveled has Remained Relatively Flat Since

18 millions 21 st Century Crossroads Funding Governor Pence s Proposal $500.0 $400.0 $300.0 Total: FY 2017: million FY 2018: million FY 2019: million FY 2020: million Refinance Existing Bonds $6.5M Annually Next Generation Trust Fund $50M Additional Appropriations $450M (over 3 yrs. Bond Financing $240M $200.0 State Surplus $241M $100.0 $- FY 2017 FY 2018 FY 2019 FY 2020 $1 Billion Stimulus Program Without New Taxes 18

19 millions Traditional Revenue State Program $2,500.0 $2,000.0 $1,500.0 $1,000.0 $500.0 $ Traditional Revenue Federal FAST Act Governor Pence s 21st Century Crossroads Funding Amount Reflects Federal and State Traditional Revenue Sources Plus Major Moves, MM 2020, Next Generation Trust Fund, FAST Act and 21 st Century Crossroads. 19

20 millions Local Federal Funds $300.0 $250.0 $200.0 $150.0 $100.0 FAST Act Est FY16: $11.0M FY17: $15.5M FY18: $20.5M FY19: $25.8M FY20: $ 31.5M $50.0 $ Local Federal Funds Local FAST Act The Additional Funds Provided By FAST Act will Increase Local Federal Funds by over $100M in the Next 5 Years 20

21 Funding Governor s Proposal Pavement Impact $500,000,000 21st Century Crossroads Additional $1 Billion Result for Pavement Front End Loaded 10.0% $450,000,000 $400,000,000 $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000, % 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% Total Pavement Invest Resulting Condition -% Poor Pavements Incremental Spending from the Stimulus has an Almost Immediate Favorable Impact on Condition Ratings that Cannot be Sustained Without a Long Term Funding Solution. 21

22 Funding Governor s Proposal Bridges Impact $400,000,000 21st Century Crossroads Additional $1 Billion Result for Bridges Front End Loaded 7.0% $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $- 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% Total Bridge Invest Resulting Condition -% Poor Bridges Incremental Spending from the Stimulus has an Immediate Favorable Impact on Condition Ratings that Cannot be Sustained Without a Long Term Funding Solution. 22

23 House Bill 1001 Road Funding Highlights 1. Dedicated State Reserves in Excess of 11.5% of Budgeted Appropriation to Roads ($460M) 1 st $30M to Local Road and Bridge Matching Account; remainder to State Highway Fund 2. Dedicate 5 cents of Gas Use Tax to Road Funding 3. Index Gasoline, Diesel, & Motor Carrier Surcharge Taxes from 2002 ($180M/yr) Expected Increases: Gas Tax 4 /gallon Diesel Tax 4 /gallon Surcharge 3 /gallon 23

24 House Bill 1001 Road Funding Highlights 4. Annual Statewide Registration Fee ($100) for All Electric Vehicles 5. New Local Tools Creates the Local Road and Bridge Matching Grant Account Local Option Income Tax (LOIT) for Roads and Bridges Municipal Option Excise Surtax/Wheel Tax Increase Max Allowable Rates: Existing Cty. Surtax/Wheel Tax, Qualifying Ctys 6. Increase Cigarette Tax to $1.995/pack (Medicaid Provider Reimbursements) 24

25 Senate Bill 333 Road Funding Highlights 1. Local Plan (Originally SB 67) Immediate Supplemental Distribution of Local Income Tax $430M (FY2016) County/Municipal Wheel & Surtax Doubles Authority to Raise $366M/year Adds Cities> 10,000 population Opportunity to Raise Additional $90M via Wheel & Surtax 25

26 Senate Bill 333 Road Funding Highlights 2. State Plan Allows Use of Excess Reserves (>11.5%) to be Transferred to the State Highway Fund ($429M) Appropriate $450M in Future Budgets Refinancing Existing Bonds ($26M) Assess $100 on Electric Vehicles; $50 on Hybrids, Split Between State and Locals Details Also Include the Development of FIRSST Task Force Whose Mission is to Develop a Sustainable Funding Plan for Long Term State Transportation Needs. 26

27 Cambridge Study: Difference between Costs and Expected Revenue for Scenario 1 1. INDOT current operating expenditures $ Achieve Recommended Pavement Conditions: <= 3% Poor-Interstate; <=5% Poor-Non-Interstate by Achieve Recommended Bridge Conditions: 3% Poor 4. Completed ongoing statewide priorities $500 $400 $300 $ US 31 Freeway Upgrade Project I-69, Section 6 Information from Cambridge Systematics Information Funding Mechanism Study, October, 2015 $100 $ Average difference = $376 M/year 27

28 Monthly Cost $ Funding Transportation: A Relative Cost Comparison $60.00 $ % of State Gross Sales Tax to the Motor Vehicle Highway Fund BMV Fees, Plates, Registrations $40.00 $30.00 $20.00 Dashed Line is the effect of inflation on revenue. About 30% less since State Gas Tax ($0.18/gal) Federal Gas Tax ($0.184/gal) Cell Phone $10.00 Cable TV $0.00 Internet Priorities: We taxpayers choose to pay more for cell phone, cable TV and Internet than for use of the highway system. The fixed highway revenues lose purchasing power each year. 28

29 Questions? Thank you 29