Transcript Symposium - Jackson Walker L.L.P.

Funding of Highways:
Crisis and Solutions
presented by
David M. Laney
September 2005
Presented by
Presentation
1. Current Revenue Sources
2. Projection of Highway Revenues 2000 - 2025
3. The Revenue Gap 2000 - 2025
4. Strategies for Closing the Gap – Mid-Term, Long Term
5. The Texas Case - Acute
Presented by
Structure of Transportation Funding
Four Categories of Revenue Sources
Funding Sources
Type Tax or Fee
Applied To
Payer
Drivers & Passengers
Transit fares, tolls, PFC
Trip Maker or
Buyer
Indirect User Fees
Vehicle
Vehicle Owner
Operator or Carrier
Shipper
Receiver
Property &
Infrastructure
Property Owner
Individuals &
Businesses
Tax Payers
Direct User Fees
Motor fuel tax (MFT)
Vehicle registration and excise tax
Replacement parts tax (tires)
Specialized Taxes
Local sales taxes
Leases
Improvement district levy
General Taxes
Income
Property
Sales and ad valorum taxes
Presented by
SOV and carpools
Land owners
Developers
Businesses
Households
Businesses
Consumers
Current Annual Revenues
Indirect User Fees Dominate Revenues
(billions 2000 constant dollars)
Funding
Sources
Highway
Direct User Fees
$5.4
Indirect User
Fees
$75.6**
Specialized
Taxes
$11.7
General Taxes
$24.8
* Public sector only ** Less revenue allocated to transit and rail
Presented by
Relative Funding by Mode
Indirect User Fees (Highway Motor Fuel Taxes) Are the
Major Source of Transportation Funding
All
Other
Revenue
Sources
Presented by
Indirect
User
Fees
(MFT)
Highway motor fuel taxes
dedicated to transit
Highways
Transit
Passenger
Rail
Freight
Rail
$117 billion
$34 billion
$2 billion
$0.2 billion
Annual Highway Revenues
(billions 2000 constant dollars)
Billions, 2000 Dollars
$160
$140
$120
$100
2000
Presented by
2005
2010
2015
2020
2025
Uncertainty in Annual Highway Revenue
(billions 2000 constant dollars)
$160
Billions, 2000 Dollars
Range of Motor Fuel Tax Yield
$140
$120
$100
2000
2005
Total Revenues
Presented by
2010
2015
2020
Total Revenues - Fuel Efficiency Effect
2025
Cumulative Revenues, 2005 to 2025
(billions 2000 constant dollars)
$6,000
Billions, 2000 Dollars
$5,000
$4,000
$3,000
$2,000
$3.4 trillion
$1,000
$0
Existing Sources
of Revenues
Presented by
Cumulative Needs and Revenues, 2005 to 2025
(billions 2000 constant dollars)
$6,000
Billions, 2000 Dollars
$5,000
$4,000
$100 billion
uncertainty in
MFT yield
$3,000
$2,000
$3.3 trillion
$1,000
$0
Existing Sources
of Revenues
Presented by
Annual Highway Needs
Capital, Operations & Maintenance
(billions 2000 constant dollars)
$220
Billions, 2000 dollars
$200
$180
AASHTO “Need to Improve”
$160
$140
$120
FHWA C&P “Need to Improve"
AASHTO “Need to Maintain"
FHWA C&P “Need to Maintain"
$100
2000
Presented by
2005
2010
2015
2020
FHWA C&P Maintain
FHWA C&P Improve
AASHTO Maintain
AASHTO Improve
2025
Cumulative Needs and Revenues, 2005 to 2025
(billions 2000 constant dollars)
$6,000
$5,000
AASHTO Improve $5.1 trillion
Billions, 2000 Dollars
C&P Improve
$4,000
AASHTO Maintain $4.2 trillion
C&P Maintain
$3,000
$2,000
$1,000
$0
Cumulative
Needs
Presented by
$4.6 trillion
$3.8 trillion
Annual Highway Needs & Revenues
(billions 2000 constant dollars)
$220
Billions, 2000 dollars
$200
$180
$160
$140
AASHTO “Need to Improve”
FHWA C&P “Need to Improve"
AASHTO “Need to Maintain"
FHWA C&P “Need to Maintain"
$120
$100
2000
2005
Total Revenues
Presented by
2010
2015
2020
2025
FHWA C&P Maintain
FHWA C&P Improve
AASHTO Maintain
AASHTO Improve
Cumulative Needs and Revenues, 2005 to 2025
(billions 2000 constant dollars)
$6,000
$5,000
AASHTO Improve $5.1 trillion
Billions, 2000 Dollars
C&P Improve
$4,000
$4.6 trillion
AASHTO Maintain $4.2 trillion
C&P Maintain
$3.8 trillion
$3,000
$2,000
$3.4 trillion
$1,000
$0
Cumulative
Needs
Presented by
Existing Sources
of Revenues
VMT Index/Lane-Mile Index
VMT Index/Lane-mile Index (1980 = 100)
Current Revenues Will Not Improve Travel Performance
190
180
170
160
VMT
150
140
130
120
110
Lane Miles
100
90
1980
Presented by
1985
1990
1995
2000
Annual Congestion Costs
Congestion Costs Have Been Increasing Dramatically
Annual Cost (Billions of 2001 $)
$80
$70
Small Urban Areas
$60
$50
Medium Urban Areas
$40
$30
Large Urban Areas
$20
$10
$0
1982
1985
Source: Texas Transportation Institute (TTI)
Presented by
1988
1991
1994
1997
2001
Congested Highways, 2000
Source: FHWA HPMS data
Presented by
Congested Highways, 2020
Source: FHWA HPMS data
Presented by
Index Federal Motor Fuel Tax
Average Annual Revenues (billions 2000 constant dollars)
$220
Billions, 2000 dollars
$200
$180
AASHTO “Need to Improve”
$160
FHWA C&P “Need to Improve"
$140
AASHTO “Need to Maintain"
FHWA C&P “Need to Maintain"
$120
$100
2000
2005
2010
2015
2020
2025
Total Revenues
FHWA C&P Maintain
FHWA C&P Improve
Index MFT
AASHTO Maintain
AASHTO Improve
Presented by
Indexing MFT
Cumulative Needs & Revenues 2005 to 2025
(billions 2000 constant dollars)
$6,000
$5,000
AASHTO Improve $5.1 trillion
Billions, 2000 Dollars
C&P Improve
$4,000
$4.6 trillion
AASHTO Maintain $4.2 trillion
C&P Maintain
$3.7 trillion
$3.8 trillion
$301 billion
$3,000
$2,000
$3.4 trillion
$3.4 trillion
$1,000
$0
Needs
Presented by
Existing Revenues
Existing Revenues
Plus
Indexed MFT
Increase Tolling
Average Annual Revenues (billions 2000 constant dollars)
$220
Billions, 2000 dollars
$200
$180
AASHTO “Need to Improve”
$160
FHWA C&P “Need to Improve"
$140
AASHTO “Need to Maintain"
FHWA C&P “Need to Maintain"
$120
$100
2000
2005
2010
2015
2020
2025
Total Revenues
FHWA C&P Maintain
FHWA C&P Improve
Increased Tolling & HOV
AASHTO Maintain
AASHTO Improve
Presented by
Expand Tolling and HOT Lanes
Cumulative Needs & Revenues 2005 to 2025
(billions 2000 constant dollars)
$6,000
$5,000
AASHTO Improve $5.1 trillion
Billions, 2000 Dollars
C&P Improve
$4,000
$4.6 trillion
AASHTO Maintain $4.2 trillion
C&P Maintain
$3.8 trillion
$3.7 trillion
$3.5 trillion
$301 billion
$67 billion
$3,000
$2,000
$3.4 trillion
$3.4 trillion
Option A
Existing Revenues
Plus
Indexed MFT
Option B
Indexed MFT Revenues
Plus Increased Tolling
$1,000
$0
Needs
Presented by
High and Low Yields from Mid-Term Corrections
Average Annual Highway Needs & Revenues
(billions 2000 constant dollars)
$220
Billions, 2000 dollars
$200
$180
AASHTO “Need to Improve”
$160
FHWA C&P “Need to Improve"
$140
AASHTO “Need to Maintain"
FHWA C&P “Need to Maintain"
$120
$100
2000
2005
2010
2015
2020
2025
High Revenue Estimate
FHWA C&P Maintain
FHWA C&P Improve
Low Revenue Estimate
AASHTO Maintain
AASHTO Improve
Presented by
VMT Base Fee
Revenue Neutral Switch from MFT to VMT Fee
Average Annual Revenues (billions 2000 constant dollars)
$220
Billions, 2000 dollars
$200
$180
AASHTO “Need to Improve”
$160
FHWA C&P “Need to Improve"
$140
AASHTO “Need to Maintain"
FHWA C&P “Need to Maintain"
$120
$100
2000
2005
2010
2015
2020
2025
Total Revenues
FHWA C&P Maintain
FHWA C&P Improve
Base VMT Fee
AASHTO Maintain
AASHTO Improve
Presented by
VMT Base Fee
Cumulative Needs & Revenues 2005 to 2025
(billions 2000 constant dollars)
$6,000
$5,000
AASHTO Improve $5.3 trillion
Billions, 2000 Dollars
C&P Improve
$4.8 trillion
AASHTO Maintain $4.4 trillion
$4,000
C&P Maintain
$4.0 trillion
$3.8 trillion
$3.9 trillion
$67 billion
$3,000
$2,000
$3.4 trillion
$3.8 trillion.
$1,000
$0
Needs
Presented by
All Mid-Term Fixes
Option D
Base VMT Fee
Gross State MFT Deposits (Unadj.)
+46%
Presented by
Gross State MFT Deposits
Purchasing Power of State MFT Deposits
+46%
+8%
Presented by
Texas Motor Fuel Tax
2,500,000,000
2,000,000,000
1,500,000,000
1,000,000,000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Motor Fuel Tax (Unadjusted)
Presented by
Motor Fuel Tax (CPI Adjusted)
Texas Motor Fuel Tax per 100 VMT
$1.40
$1.35
$1.30
$1.25
$1.20
$1.15
$1.10
-26%
$1.05
$1.00
$0.95
1993
1994
1995
1996
1997
MFT (Unadj.) per 100 VMT
Presented by
1998
1999
2000
2001
2002
MFT (Adj.) per 100 VMT
2003
2004
Funding of Highways:
Crisis and Solutions
presented by
David M. Laney
September 2005
Presented by