Community Meeting On Transportation Funding Options

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Community Meeting On Transportation Funding
Options

• 2007

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Population growth and the increased road miles
traveled has outstripped our current
infrastructure.Georgias relatively low motor
fuel tax revenues have brought little
infrastructure investment in recent years. This
fact impacts our quality of life, our business
bottom line, and Georgias economic prospects.
Current Situation
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Growth in Georgia has been phenomenal we are
the 4th fastest growing state
Top 10 states population growth, millions,
2000-2006
Rate of growth
Twice the national average
Source U.S. Census Bureau
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as well as in Metro Atlanta the fastest
growing metropolitan region
Population growth, millions, 2000-2006
Rate of growth
Three times the national average
Metropolitan areas over 500,000 in
population Source U.S. Census Bureau
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Other urban areas in Georgia are also growing
rapidly
Population growth, thousands, 2000-2006
Percent population change
Source U.S. Census Bureau
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Infrastructure investment has not kept up growth
in population and road usage
Relative trends
VMT
Population
Lane miles
Road usage is up over 40, but road capacity has
increased less than 2
Vehicle Miles Traveled Source Georgia
Department of Transportation
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General fund and motor fuel tax revenues have
been growing briskly in recent years
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But for MFTs, growth adjusted for inflation has
been minimal over an extended period
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Inflation adjusted revenue relative to Georgias
population has declined significantly
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Georgia has made the 4th-lowest infrastructure
investment in the country
State funds for transportation capital outlay per
capita (roads and transit) 1995-2003
California.
Wyoming
Minnesota
Iowa
Nebraska
Michigan
South Dakota
Alaska
National Average
Georgia
Oregon
Three highest
Five lowest
Middle of the pack
Source Federal Highway Administration, Texas
Transportation Institute
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Project Implementation Needs to Move Faster

• Current federally-mandated process requires each
  step (design/engineering, Environmental Impact
  Study, buying right of way, construction) to be
  completed before the next step can begin
• Inflation, particularly of right of way costs,
  during the wait can cause the projects budget to
  soar
• DOT is beginning to address the changes that are
  needed internally as well with the Monitor
  Efficiency Study
• Governor Perdue has asked the Commission for a
  New Georgia to review the DOTs competitive
  bidding process
• Lt. Governor Cagle and Speaker Richardson have
  also requested an audit to look for efficiency
  gains as well

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Our transportation needs are varied across
Georgia, but everyone wants a system

• That is safe
• That promotes the efficient movement of people
  and goods
• That promotes economic vitality

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Todays transportation plans are insufficient to
catch up with our past and future
growth.Georgias historically-low motor fuel
taxes, matched with reductions in the federal
transportation program, is significantly
impacting Georgias construction program.
Future challenges
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Projects are coming out of the short- and
long-range plans
Federal-Aid Programs, 2008-2013
Georgias 08-13 Transportation Improvement Plan
has been cut by 7.7 billion, or 510
projects. ARC is cutting 5.5B from metro
Atlantas long-term plan
6.5
Forecast federal revenues
Forecast construction costs
25-400
Right-of-way costs
Varied
Source Atlanta Regional Commission, Georgia
Department of Transportation
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Project delivery must become more efficient at
the state and federal level.The funding issue
must be addressed as well.There are a number of
options and examples from other states that
should be considered.
Addressing our challenges
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Project Implementation

• The state is beginning to address ways to improve
  DOTs efficiency as mentioned earlier
• At the federal level, the Federal Highway
  Authority should authorize a process that allows
  the design engineering, Environmental Impact
  Studies and right of way purchasing to proceed
  concurrently, rather than waiting to complete one
  step before starting another
• This is particularly important for states that
  receive less than 95 of the dollars they send to
  Washington back

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Possible funding tools
Cons
Pros

• Unpopular with voters
• Significant increase needed for impact
• Constitutional change required for applicability
  to other modes
• Constitutional change required
• Last attempt in 1989 failed (1 sales tax went to
  general fund instead)
• Concerns over dedicated funds

• Motor Fuel Tax (MFT)
• Raising
• Indexing to CPI or construction index
• Replace MFT with permanent sales tax

• Close to a true user-fee
• Well-understood, established collection methods
• Raises significant funds (1 sales tax
  25/gallon motor fuel tax
• Shown to be popular with voters

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Possible funding tools (cont.)
Cons
Pros

• Unproven
• New technology needed for real-time charges
• No national standard how does one charge
  non-resident users?
• Constitutional change required
• Net loss of funds from states general fund
• Concerns over dedicated funds

Replace MFT with a mileage fee Dedicate
aviation fuel taxes to regional airport funding

• A true user-fee
• Pilot program in Oregon progressing well
• Addresses long-term viability of motor fuel tax
• Addresses need of under-funded program
• Consistent with programs in other states

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Possible funding tools (cont.)
Cons
Pros

• Constitutional change required
• Net loss of funds from states general fund
• Concerns over dedicated funds
• Lessened impact without annual source of funding
  for new capital

Dedicate railroad fuel taxes to rail-line
funding Create a State Infrastructure Bank

• New funding stream for increasing rail needs
• Creates new opportunities to partner with freight
  railroads
• Accesses federal seed funds
• Provides low-cost capital or grants to local or
  state govt
• Proven concepts in other states

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Possible funding tools (cont.)
Cons
Pros

• Not a new capital revenue source, but could cut
  costs and time
• Difficulty in implementation so far

• Toll Roads
• Possibly a Public Private Partnership (design,
  build, operate, maintain)

• Shifts construction risk to private sector
• Tolling provides OM monies
• Some opportunities for revenue sharing between
  state and private operator
• Tolling provides opportunity for
  congestion-pricing, thereby maximizing lane
  throughput

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Possible funding tools (cont.)
Cons
Pros

• New revenue source, but public participation
  still needed for construction capital
• Difficulty in implementation so far
• Limited applicability for new construction,
  unless existing lanes are also tolled
• Concerns over excessive pricing by private
  operator
• Complex agreements

• Public-Private Partnerships
• Toll-road concession agreements (30-year
  agreements)
• (design, build, operate, maintain, partially
  finance)

• Same as toll-road PPIs
• Better opportunities for revenue sharing,
  especially in the later years
• Can also provide construction capital for the
  projects up to 75 of construction costs in
  very congested corridors.

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Possible funding tools (cont.)
Cons
Pros

• New revenue source, but construction capital for
  that facility only
• Little national experience in implementation
• Limited applicability for new construction
  highly congested corridors only
• Concerns over long-term leases, excessive pricing
  by private operator
• Complex agreements

• Long Term Concessions
• Another form of PPIs allowing private operator
  ability to toll for 50-99 years
• (design, build, operate, maintain, finance)

• Same as toll-road PPIs,
• Could provide 100 of construction capital in
  very congested corridors.
• Higher probability of revenue sharing beyond ROI
  thresholds, especially in the later years.

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Possible funding tools (cont.)
Cons
Pros

• Forming regions complex, troublesome
• Depending on mechanism, could require
  constitutional amendment
• Necessary project list proved divisive in the
  past stirred rural-urban tension
• Poor track record tried only once in 25 years,
  and it failed
• Constitutional amendment reqd

Regional sales tax referenda w/
sunset Statewide sales tax referendum w/
sunset

• Strong track-record of success (83 pass rate)
• Proven voter safeguard concepts clearly
  understood
• Addresses statewide needs
• Raises significant funding (20B in 10 years)
• Could be used for all transportation modes

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Possible funding tools (cont.)
Cons
Pros

• Tolling existing free highways has proven
  controversial
• Few examples in the U.S., none on a system-wide
  basis
• Significant public education efforts acceptance
  likely slow

More aggressive travel-demand policies (Ex
tolling existing infrastructure could be a PPI,
cordon pricing )

• Injects free-market efficiencies into the system
• Pricing proven to shift personal behavior
• Free-flowing roads carry 40 more traffic than
  congested ones
• Raises revenue, provides access for transit

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Possible funding tools (cont.)
Cons
Pros

• Revenue not insignificant, but not huge either
• Not a revenue source, per se, but empowers its
  collection

Various auto and travel related fees
Regional Mobility Authorities Other
ideas

• Worked in other areas
• Tied to ownership/ usage of automobiles close
  to a user fee
• Multiple examples in other states
• Allows flexibility for regions to define
  facilities, raise revenues themselves.

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Funding tools to consider

• Raising Motor Fuel Tax and/or indexing MFT to CPI
  or construction index
• Replace MFT with permanent statewide sales tax
• Replace MFT with mileage fee (Oregon pilot
  program)
• Dedicating aviation fuel tax to regional airports
• Create a State Infrastructure Bank
• Public-private partnerships (tolling,
  concessions, etc.)
• Regional sales-tax referenda
• Statewide sales-tax referendum
• More aggressive travel-demand pricing
• Regional Mobility Authorities
• Other ideas

• No silver bullet will likely take combination
  of solutions
• Each idea has distinct pros and cons

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The good news voters and businesses ready for
action

• 79 of voters think there is a problem
• 85 of voters say traffic has gotten worse
• 66 of businesses say transportation is No. 1
  issue for operating in Metro Atlanta (education
  ranked second _at_ 19)

Transportation is the biggest economic
development challenge we face
Source Cooper Secrest Associates, Ayres,
McHenry Associates, March and October 2004,
Texas Transportation Institute
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What Do You Think?

• Comments
• Questions and Answers
• Thank You for Your Time and Interest