Governor’s Task Force on Modernizing Transportation Funding December 2, 2009

1. National and State Transportation Funding Overview Governor’s Task Force on Modernizing Transportation Funding December 2, 2009 Thomas R. Warne, PE Tom Warne and Associates

2. National and State Transportation Funding Overview • National Overview • State Overview and Practices • Utah Case Study

3. Situation: Transportation Faces Historic Policy Issues • Climate Change • Financing the System

4. Situation: Demand for Transportation Mobility Will Continue to Grow • Population will increase to 235 million by 2055 • VMT will double by 2055 • Freight will double by 2035 • Transit needs will double by 2055 American Association of State Highway and Transportation Officials

5. Situation: The Percentage of Roads in Poor Condition Grows Urban Area Percent Los Angeles 64 San Jose 61 San Francisco/Oakland 61 Honolulu 61 Concord, CA 54 New York/Newark 54 San Diego 53

6. Situation: Capacity Improvements Don’t Meet Demands • Utah-from 1990 to 2007 • Population grew 47% • Vehicle miles travelled grew by 71% • Roadway capacity grew by 4% Rough Roads Ahead Report, 2009

7. Situation: Capacity Improvements Don’t Meet Demands • Idaho-from 1990 to 2007 • Population grew 48.6% • Vehicle miles travelled grew by 55% • Roadway capacity grew by 3.3% Source: ITD

8. Situation: The System is Over 50 Years Old and Wearing Out

9. Situation: The Purchasing Power of the 18.4¢ Federal Tax Lags

10. Federal Aid – States with Highest Ratio • Ratio of Apportionments and Allocations to Payments • Date Range in “Funding-Aid Ratio” is 1957 - 2004

11. Federal Aid – States with Lowest Ratio • Ratio of Apportionments and Allocations to Payments • Date Range in “Funding-Aid Ratio” is 1957 - 2004

12. Situation: EPA Finds GHGs as a Significant Public Threat • EPA finding that greenhouse gas emissions pose a significant threat to public health and safety • Includes CO2 • Rulemaking would allow them to regulate CO2 emissions • Unknown but significant impacts on transportation projects-particularly capacity projects

13. Situation: FTA “New Starts” Program is Over Subscribed • 10 projects chosen for ARRA funding • Priority given to projects currently in construction or able to obligate funds within 150 days • Private sector operation requirement removed from application • Current pipeline of projects exceeds available funds by about 10:1

14. Situation: Federal Approach is Piecemeal

15. Situation: US DOT High Speed Rail Grant Program Is Over Subscribed • High-Speed/Intercity Passenger Rail Network Grant Program originally funded at $8 Billion • Federal Railroad Administration received 278 Applications • Applications totaled $102 Billion

16. Financing the System: ARRA Funding • $27 billion for highways • $8.4 billion for transit • $8.0 billion for High Speed Rail • Funds Awarded: 87.11% • Pending Approval: 5.20% • Funds Remaining: 7.69%

17. Situation: TIGER Discretionary Grants Are Over Subscribed • Team created to expedite $1.5 Billion in Discretionary Grants • Grants will range from $20 Million to $300 Million • Competitive application acceptance process • 1,361 applications received • Total value of the applications-$57 billion (38 times available funding) • (Transportation Investment Generating Economic Recovery-TIGER)

18. Financing the System: National Initiatives National Surface Transportation Policy and Revenue Study Commission National Transportation Infrastructure Finance Commission

19. Financing the System-National Surface Transportation Policy and Revenue Study Commission • Reduce funding categories from over 108 to 10 • Increase the motor fuels tax • Transition to a vehicle-mileage tax • Streamline environmental processes • Leverage Public-Private-Partnerships

20. Financing the System 40¢

21. Financing the System – National Transportation Infrastructure Finance Commission • Consider implementation of multiple financing options • Transition to a vehicle mileage tax • 10¢ gas tax and 15¢ on diesel • Tolling provisions

22. Financing the System: 10¢ National Gas Tax Increase Impacts • ½¢ per mile • $5 a month per vehicle • $9 a month per household

23. Situation: The Obama Administration Does Not Support Raising the Motor Fuels Tax “Transportation Secretary Ray LaHood rejected increasing the gasoline tax to fix a worsening shortfall in funding for highways and mass-transit systems, saying the government should instead turn to ideas such as private investment and new tolls to raise money.” Wall Street Journal, March 4, 2009

24. Situation: The Administration Does Not Support a VMT Tax "We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled.” US Secretary of Transportation Ray LaHood FoxNEWS, February 20, 2009

25. Situation: The Administration Does Not Support a VMT Tax "We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled.” US Secretary of Transportation Ray LaHood "The policy of taxing motorists based on how many miles they have traveled is not and will not be Obama administration policy.” Lori Irving, US DOT Spokesperson FoxNEWS, February 20, 2009

26. Situation: Proposed Funding Solutions • Toll Roads and Private Investment • Smart Growth • Livability • Congestion Pricing • Carbon Taxes to Limit Vehicle Miles Traveled • Land Use Planning

27. Situation: Earmarks Will Continue Divert Funding from the Approved Program - History • “Demonstration Projects”, “High Priority Projects” or “Earmarks”

28. Situation: Earmarks – Idaho Statistics

29. Situation: Idaho’s Revenue Sources • Federal Aid-52% • State fuel tax-26% • State Registrations-13% • State fees and misc. (D.L., titles, etc.)-8% • Local Match for federal aid projects-1% • Reimbursements-0% • Total-100%

30. Idaho State Funding Sources • Idaho is 12th from the top in relying on federal aid to fund their program

31. Situation: The Highway Trust Fund is Out of Balance • $8 billion infusion in September 2008 • Another $7 billion required for FY 2009 • FY 2010 will require at least $10 billion more • Obama’s 18 month extension will require at least $20 billion in additional funds

32. The Situation: Another Extension is a Given • Senate working on a six month extension • President Obama proposes an 18 month extension • Chairman Oberstar (House T&I Committee Chair) is pushing for the new bill and a shorter extension

33. Situation: SAFETEA:LU Reauthorization will be Late • 1982-STAA, 3 months late • 1987-STURRA, 6 months late • 1992-ISTEA, 2 months late • 1998-TEA 21, 8 months late • 2005-SAFETEA:LU, 23 months late • 2011-”STAA,” at least 18 months late

34. Situation: Late Authorizations Create Programming Problems • States have no idea about future funding levels and are unable to plan ahead • States cannot embark on large projects due to uncertainty of funding levels • Capacity demands continue to increase. Funds are diverted from maintenance to capacity projects

35. Situation: Addressing the Environment Global warming Carbon impacts/footprint Greenhouse Gas emissions Per capita fossil fuel consumption Air quality health impacts Efforts to decrease dependence on fossil fuels

36. Situation: Probable Outcomes of the New Transportation Bill • No significant increase in Federal funding • More regulation and oversight • Climate change impacts • EPA with a greater role in transportation • Less flexibility on how money is spent • May not be a six-year bill

37. Summary: Federal Funding Implications for Idaho • Idaho cannot solely rely on the federal government or programs to solve their funding problems • Idaho should be engaged in the climate change debate • ITD will have to respond to more federal regulation

38. State Overview and Practices

39. Situation: State Economies and Budgets Are Struggling • Over half of all states experienced negative budget growth in FY2009. • General fund expenditures estimated to decline 17% from FY2008 • Tax collections estimated down 6.1% from actual FY2008 collections.

40. Situation: State Economies and Budgets Are Struggling • Projections for FY2010 are for closer to three quarters of states to experience negative growth. • General fund expenditures estimated to decline 23% compared to FY2009 • NGA reports an estimated 1.7% growth for FY2010 compared to FY2009.

41. Situation: State Transportation Funding Shortfalls • A sampling of states reporting transportation budget shortfall numbers: • Virginia: $2.6 Billion through 2015 • Texas $3.6 Billion through 2015 • Iowa: $27.7 Billion through 2029 • Colorado: $149 Billion through 2035 • Minnesota: $50 Billion through 2029 • Massachusetts: $20 Billion through 2029

42. Rental car fees Lodging tax Impact fees Special Improvement Districts Tolls Vehicle tax State Gas tax Local Gas tax General Sales tax Transportation Related Sales tax Property tax Employment tax Financing the System-State and Local Initiatives

43. Transportation Ballot Initiatives - 2006 • Ballot Initiatives Defeated • Ballot Initiatives Approved • Ballot Initiatives with Split Results

44. Transportation Ballot Initiatives - 2007 • Ballot Initiatives Defeated • Ballot Initiatives Approved • Ballot Initiatives with Split Results

45. Transportation Ballot Initiatives - 2008 • Ballot Initiatives Defeated • Ballot Initiatives Approved • Ballot Initiatives with Split Results

46. Transportation Ballot Initiatives - 2009 • Ballot Initiatives Defeated • Ballot Initiatives Approved • Ballot Initiatives with Split Results

47. Ballot Initiatives-Trends • The average approval rate for all of the measures tracked in 2006 and 2009 is 63%. • Successful measure have the following: • Specific projects • Specific timetable for project delivery • Sunset provision on revenue mechanism

48. Utah Case Study

49. Utah’s Growth Summit – 1995 “There is a time in the life of every problem when it is big enough to see and small enough to solve.” Governor Michael O. Leavitt

50. Utah’s Growth Summit – 1995 Growth Focus Areas • Water • Open Space • Transportation