DOT Funding Issues

Slide1: 

H. Tasaico, P.E. Leland, NC November 29, 2006 Cape Fear Area Rural Transportation Coordinating Committee Transportation Funding Overview

Slide2: 

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Outline: 

Outline NCDOT Funding Sources Federal Overview State Overview Cash Management Gas Tax Transportation and The Economy Wake Up Calls!

System Responsibility: 

System Responsibility State Lane-Miles and Ranking

System Funding: 

System Funding All Revenue/Lane-Mile and Ranking

NC Population Growth: 

NC Population Growth

Growth: 

Growth

Outline: 

Outline NCDOT Funding Sources Federal Overview State Overview Cash Management Gas Tax Transportation and The Economy Wake Up Calls!

Transportation Revenue Sources: 

Transportation Revenue Sources Gasoline Taxes 3% of value Highway Use Tax Fees Interest

NCDOT Funding Sources: 

NCDOT Funding Sources DOT Budget Highway Fund Highway Trust Fund Federal-Aid

Outline: 

Outline NCDOT Funding Sources Federal Overview State Overview Cash Management Gas Tax Long Range State Transportation Plan

Slide12: 

Federal-aid Highway Program Characteristics Federally assisted, State administered Funding tied to specific systems Requires States to have highway agency States pay for maintenance Matching requirements Contract authority

Slide13: 

Federal Functional Classification Financial Assistance Eligibility Local and rural minor collectors 76% Other 20% NHS 4% Interstate 1% (Included in NHS %) Eligible Ineligible 4 million miles of public roads total

Slide14: 

Reimbursement Contractor does work State pays contractor State submits voucher to FHWA FHWA sends to Treasury Treasury sends check to State

Slide15: 

Availability of Funds Funds For: FY06 FY07 FY08 FY09 Good Through: 07 06 07 09 08 08 09 08 10 09 10 11 12 11 10 09

Slide16: 

Highway Trust Fund Income* Highway Account – FY 2005 Gasoline & Gasohol - $21.2 Diesel – $8.4 Total = $34.1 Billion Other - $0.02 Truck Sales – $2.9 Tires - $0.5 Truck Use - $1.1 *Prior to transfers & refunds

Slide17: 

Federal Gasoline Tax 18.4 cents 0.1 cent L.U.S.T. Trust Fund 2.86 cents 15.44 cents Mass Transit Account Highway Account Effective October 1, 1997 In cents per gallon

Slide18: 

Federal Diesel Tax 24.4 cents 0.1 cent 2.86 cents 21.44 cents Mass Transit Account Highway Account L.U.S.T Trust Fund Effective October 1, 1997 In cents per gallon

Slide19: 

Federal Truck User Taxes Truck Sales: 12% of retail price for trucks over 33,000 lbs or trailers over 26,000 lbs GVW Truck Use: Up to 55,000 lbs Over 55,000 lbs No tax $100 + $22/1000 lbs over 55,000 $550 maximum Tires: 9.45 cents for each 10 pounds exceeding 3500 lbs maximum rated load capacity (4.725 cents for bias-ply or super single tire) Effective January 1, 2005

Federal Highway Trust Fund Actual and Projected: 

Federal Highway Trust Fund Actual and Projected

Slide21: 

Some Notable Acts 1916 1921 1956 1982 1991 ISTEA 1998 TEA-21 2005-2009 SAFETEA-LU Authorization Acts: Federal-aid Highway Congressional Continuations

Slide22: 

Enactment of a Surface Transportation Act House of Representatives Senate Public Hearings Public Hearings Subcommittee Bill Committee Bill House Bill Subcommittee Bill Committee Senate Bill Any Differences? No Yes

Slide23: 

Enactment of a Surface Transportation Act President Conference Committee Override Veto? Conference Bill Floor Action No Yes Start Over Surface Transportation Act Veto No Yes Approval

Slide24: 

S A F E T E A L U AFE CCOUNTABLE LEXIBLE CT: a EGACY for sers FFICIENT RANSPORTATION QUITY www.fhwa.dot.gov/safetealu

Major FundingHighway Programs: 

Major Funding Highway Programs Core Programs Interstate Maintenance (IM) National Highway System (NHS) Surface Transportation Program (STP) Bridge (BR) Congestion Mitigation Air Quality (CMAQ) Highway Safety Improvement Program (HSIP)

FundingHighway Programs - Continued: 

Funding Highway Programs - Continued Other Programs Appalachian Development System Recreational Trails Program Coordinated Infrastructure Border Program High Priority Projects Safe Routes to School Equity Bonus Program (formerly Minimum Guarantee)

SAFETEA-LU Rate of ReturnHighway Programs: 

SAFETEA-LU Rate of Return Highway Programs 25% 50% 75% 100%

SAFETEA-LU Rate of ReturnHighway Programs: 

SAFETEA-LU Rate of Return Highway Programs 90.5% to 92%

Slide29: 

Obligation Limitation What is it? A budgetary mechanism to control Federal spending Who does it? Congress – through legislation Why? To be responsive to current budget policies

Outline: 

Outline NCDOT Funding Sources Federal Overview State Overview Cash Management Gas Tax Transportation and The Economy Wake Up Calls!

State Transportation Revenue Sources: 

State Transportation Revenue Sources Motor Fuel Tax 55% Highway Use Tax 25% Fees 20%

Sources of Funds2006-07 by Major Funding SourceTotal Funding = $3.8 Billion: 

Sources of Funds 2006-07 by Major Funding Source Total Funding = $3.8 Billion 29% Highway Trust Fund $1,101M 47% Highway Fund $1,794M 22% Federal Funds $844M 2% Other Federal Aid & Department Receipts $51M

Slide33: 

42.0% TIP Construction $1,364M 4.1% 6.0% 7.5% Projected Uses of NCDOT Appropriations 2006-07 Total Funding = $3.8 Billion 41.8% TIP Construction $1,583.0M 7.0% Other Construction $263.8M Secondary Roads State Urban Discretionary Funds Spot Safety Economic Development Other Small Urban Const. 23.1% Highway Maintenance $876.2M 4.1% Municipal Aid $156.8M 9.6% Other Programs $363.8M 6.9% Administration $260.5M 7.5% Other Agencies $285.4M 178.714.0 15.0 9.1 38.0 2.0 7.0

2006-07 Fund Sources: 

2006-07 Fund Sources 2.8% Other $50.0M 66.4% Motor Fuels Tax $1,191.0M 0.2% Investment Income $2.5M Highway Fund Highway Trust Fund 30.8% Fees $552.7M 53.6% Highway Use Tax $590.4M 36.1% Motor Fuels Tax $397.0M 10.1% Fees $110.7M

The Programming Process: 

The Programming Process Cost vs. Available funds Needs: Travel Services Reduce Congestion Improve Safety Enhance Mobility Economic Development Equity Environmental Protection

Two Year TIP Process: 

Two Year TIP Process Current Program Public Meetings Draft TIP Development Reviews and Adjustments Public Meetings TIP Review Sessions BOT Approval of TIP Governor Approval MPO Approval of MTIP Draft TIP Adjustments Year 1 Year 2

Equity Formula: 

Equity Formula 50% POPULATION OF REGION AS PERCENT OF STATE 25% REMAINING INTRASTATE SYSTEM MILES 25% EQUAL SHARE Loops , CMAQ, and Competitive / Discretionary Federal Grant Funds Excluded

Remaining Intrastate Mileage: 

Remaining Intrastate Mileage

2005 Highway Trust Fund StatusMileage: 

2005 Highway Trust Fund Status Mileage Intrastate Loops

2005 Highway Trust Fund Status: 

2005 Highway Trust Fund Status Remaining Cost ($ in Billions) Cost per Mile ($ in Millions)

Slide41: 

Annual Funding Balance

Slide42: 

TIP Equity Formula Allocations - 2006-2012 Average

Slide43: 

TIP Equity Formula per Capita Allocations 2006-2012 TIP Average Region [Divisions]

Outline: 

Outline NCDOT Funding Sources Federal Overview State Overview Cash Management Gas Tax Transportation and The Economy Wake Up Calls!

Slide45: 

What is Cash Management?

Year End ClosingCash Balance: 

Year End Closing Cash Balance

NCDOT Requirements Senate Bill 1005, S. 27.73: 

NCDOT Requirements Senate Bill 1005, S. 27.73 Maximize cash flow to extent possible 12% Combined HF/HTF projected revenues Establish necessary management controls Financial Planning Committee Cash Management Unit Forecasting Models

Slide48: 

Financial Planning Results and Assumptions Revenue Forecast Expenditure Forecast Overall Forecasting accuracy 98%+

Policy Decisions Affecting DOT Cash Position: 

Policy Decisions Affecting DOT Cash Position Legislative Authorized SB 1005 $ 687 M GF Transfers 435 M Moving Ahead 700 M Underground Storage Tank Fund 32 M Total $1,854M

Other Factors AffectingDOT Cash Position: 

Other Factors Affecting DOT Cash Position Pressure to deliver projects and address needs – Unmet needs over next 25 years - $30 billion Advancement of TIP projects - $575 million Design/Build projects - $220 million Ecosystem Enhancement Program - $89 million Advancement of Contract Resurfacing - $78 million Natural disasters NCDOT $160 million ($80 million reimbursement) Construction costs Increased 33% between 2002 and 2004 - $560 million

Cash Flow Forecast as of November 200436 Month Baseline: 

Cash Flow Forecast as of November 2004 36 Month Baseline

Slide52: 

2005 Cash Management Contingency Plan Revenues Maximize Federal Aid Revenue Collections - $180m Innovative Financing Emergency Relief Expenditures Reduced TIP Lettings for CY 05-07 - Average $650m/year Postpone DOH Division Spending Programs Moving Ahead - $236m Secondary Roads - $50m SB 1005 - $50m Defer Public Transportation & Other Modes - $44.4m

Slide53: 

Cash Flow Forecast as of August 2005 36 Month

Outline: 

Outline NCDOT Funding Sources Federal Overview State Overview Cash Management Gas Tax Transportation and The Economy Wake Up Calls!

Motor Fuel Tax CollectionTerminal Locations: 

Motor Fuel Tax Collection Terminal Locations

NC Variable Gas Tax: 

NC Variable Gas Tax Adjusted Semi-annually January 1st and July 1st NC Department of Revenue Fixed Component 17.00 cents 0.50 cents for LUST 0.25 cents for Inspection Variable Component - Greatest 3.5 cents or 7% previous 6 month average wholesale motor fuel price January (April to September) July (October to March)

Slide57: 

2005-2006 Use of Fuel Tax

Fuel Price Comparison(1992 & 2006): 

Fuel Price Comparison (1992 & 2006)

Gas Tax Rate ErosionNorth Carolina and Federal(CPI Adjusted): 

Gas Tax Rate Erosion North Carolina and Federal (CPI Adjusted)

Slide60: 

North Carolina Fuel Tax versus Inflation 2005 Projected Additional Revenues $ in Millions - Based on January through September collections 120.0 2005 Incremental Operations Cost - TIP Letting Construction Increase (130.0) - 2005 TIP On-going Construction Increase (13.0) - 2005 Maintenance Increase (69.0) - Operation Fuel Increases (3.6) (215.6) 2005 Net Inflation Cost (95.6)

Preliminary NCDOT Cash Flow Forecastfrom November 2005 with New Tax Rate: 

Preliminary NCDOT Cash Flow Forecast from November 2005 with New Tax Rate

Preliminary NCDOT Cash Flow Forecastfrom November 2005 with Flat Tax Rate: 

Preliminary NCDOT Cash Flow Forecast from November 2005 with Flat Tax Rate

Outline: 

Outline NCDOT Funding Sources Federal Overview State Overview Cash Management Gas Tax Transportation and The Economy Wake Up Calls!

20th Century - Logistics Plan: 

20th Century - Logistics Plan

Slide65: 

Logistics 1990

Slide66: 

Logistics 2000+

US Logistics Survey: 

US Logistics Survey No NC city ranked in top 50 logistics friendly cities

21st Century - Logistics Plan: 

21st Century - Logistics Plan

Outline: 

Outline NCDOT Funding Sources Federal Overview State Overview Cash Management Gas Tax Transportation and The Economy Wake Up Calls!

ASCE Report CardIs A Wake Up Call!: 

ASCE Report Card Is A Wake Up Call! "A Crumbling Infrastructure Cannot Support A Healthy Economy" ASCE- American Society of Civil Engineers

Growing Funding Gap: 

Growing Funding Gap

Summary: 

Summary