Funding the Future of Our Transportation Infrastructure

Juva Barber

Executive Director

What is KBT?

Kentuckians for Better Transportation educates and advocates for all modes of transportation to promote a safe, sustainable transportation network that brings economic growth and improved quality of life to all Kentucky communities.

TRANSPORTATIONFUNDING

SOURCESCHALLENGES

FUTURE

53 General Aviation Airports

1 Part 139 Airport

6 Commercial Airports

Aviation

Aviation Funding

• State FundingGA Airports – AEDF

• Federal Funding– FAA • GA Airports receive AIP funds• Commercial airports receive funds based on a formula

• On Site Options– Fuel Sales– Fees for service

Aviation Funding - Challenges

• State Funding– AEDF have been “swept”

• Federal Funding– FAA Authorization expires soon

• Other Sources– Cyclical/inconsistent– Not sufficient to cover all needs

Aviation Funding - Future

• State Level–Maintain AEDF to be used as required by statute

• Federal Level– Encourage Congress to develop a long term

authorization – not a continuing resolution– Encourage a well funded AIP program for GA

airports– Encourage adequate funding options for all

commercial airports

Information Courtesy Kentucky Transportation Cabinet 2014

Local Roads, Highways & Bridges

Local Roads, Highways & Bridges

State Funding

• Motor Fuels Tax• Motor Vehicle Usage• Motor Vehicle License• Weight Distance• Other• Motor Vehicle Operator• Investments

Federal Funding (FHTF)

18.4 cent per gallon gas tax

The Highway account is the primary source of revenues for Federal-aid funding returned to the States for carrying out various highway programs.

Challenges

State Level• Largest contributor to the road fund is the

motor fuels tax– Paid by consumer at retail locations– Variable tax (9%*AWP + .05 + .014)– Set at 26 cents per gallon until July 1, 2016

Funding FY 2015W/ HB 299

CFG Estimate

FY 2016 W/HB 299

CFG Estimate

Revenues

Motor Fuels Tax $851 $883.2 ($32.2)

$737.7 $870.5 (132.9)

Motor Vehicle Usage $425.5 $445.5

Motor Vehicle License $101.9 $103.1

Weight Distance $79.9 $81.4

Other $36.4 $36.7

Motor Vehicle Operators

$16.7 $17.5

Investment $3.1 $3.7

Total Road Fund $1,514.5 $1,425.5

Federal Funds $726.8 $729.1

Average Miles Driven

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20134041424344454647484950

46.446.9 46.9

47.4 47.4 47.6 47.947.2 47.2

48.1 48.247.2 47.1

Avg Miles Driven Avg Miles Driven

KYTC

In billions

Average Miles Per Gallon

2009 2010 2011 2012 2013 201420

21

22

23

24

25

26

27

21.3

22.122.5

23.5

24.725.1

AVG MPGAVG MPG

University of Michigan Transportation Research Institute

Kentucky Motor Fuels Tax

2009 2010 2011 2012 2013 2014 2015 201620

22

24

26

28

30

32

22.5

24.1

25.9

27.8

29.9 30.1

27.6

26

Tax RateTax Rate

Challenges

Federal Level• Motor Fuels tax of 18.4 cents per gallon does

not generate enough revenue • Has not been raised since 1993• Need a long term authorization bill with

adequate funding source– CR expires on May 31, 2015– Enough funding to operate through July

Future Funding

• State Funding–Motor fuels tax rate set at 26 cents per gallon

through FY 2016– Additional changes may be necessary to address

challenges

• Federal Funding?

Public Transit

All Kentuckians have access public transit regardless of their location

Transit Funding

• General Fund

– Budgeted $5.7 million in general fund dollars per year for public transit in FY’s 14-16

• Federal Funds

– Estimated $25 million per year comes from Mass Transit Account– KYTC’s Office of Transportation Delivery submits application for these and other

funds– Federal funds are tied to the gas tax – roughly 20% of revenues coming into the

Highway Trust Fund are dedicated to transit. – Used to build and upgrade rail mass transit systems and purchase and upgrade buses

and facilities of local transit agencies

• Fare boxes/fees

• Medicaid reimbursements

Transit Funding - Challenges

• State Funding– General Fund appropriation– Perception

• Federal Funding– Tied to Federal Highway Trust Fund (1983)– Roughly 20% of FHTF revenues are spent on

transit (MTA)–Movement to separate MTA and FHTF

Transit Funding - Future

• State Funding– Better state the needs of the entire transit network

• Federal Funding– Long term, adequately funding bill needed

Railroads

Rail Funding

• Shortline Railroads can access some KYTC funds

• $1.6 million each fiscal year• 80/20 match• At grade rail crossings, railroad bridge overpasses, rail

crossing safety equipment

• No public funding for long haul rail

• Can apply for TIGER Grants, 45G tax credits

Rail Funding - Challenges

• Limited to no funding outside private investments

• Grant programs are limited and difficult to obtain

• Tax credits have to regularly be reauthorized

Rail Funding - Future

• Crossing improvements

• TIGER

• More funding needed to make necessary improvements

Riverports/Waterways

Riverport/Waterways Funding

• Riverport Improvement Funds– $500,00 each fiscal year– Administered by Water Transportation Advisory

Board– Limited to Maintenance of access and dredging

• TIGER grants• Economic Development Grants/Loans

Riverport/Waterways Funding - Challenges

• State Funding– General Fund appropriation– Limitations on usage for maintenance of access

and dredging

• Federal Funding– TIGER Grants are difficult to obtain

• Local Funding– Difficult to obtain & finance

Riverport/Waterways Funding - Future

• State Level– General Fund appropriation

• Federal Level–WRRDA –Maritime Administration – funds for marketing– Grants if available

ALTERNATIVES

ALTERNATIVE FUNDING

• Public Private Partnerships– Bill has failed past two sessions– State has entered into P3 agreements without enabling

legislation

• LIFT – Local Investments for Transformation– Requires a Constitutional amendment in an even year– Failed past two sessions

• Other Options

Transportation Makes It Happen

THANK YOU!

Funding For All ModesFY 2015Estimate

FY 2016 Estimate

Revenues

Motor Fuels Tax (Gas Tax) $883.2 $870.5

Motor Vehicle Usage $425.5 $445.5

Motor Vehicle License $101.9 $103.1

Weight Distance $79.9 $81.4

Other $36.4 $36.7

Motor Vehicle Operators $16.7 $17.5

Investment $3.1 $3.7

Total Road Fund $1,546.7 $1,558.4

Federal Funds $726.8 $729.1

Kentucky Motor Fuels Tax Formula9% of the AWP per gallon + 5 ¢+ 1.4 ¢ = Current tax rate per gallon

Currently: 9% *$2.837 + 5 ¢ + 1.4 ¢ = 31.93¢ per gallon

As of January 1:9%* $2.354 =+ 5 ¢ + 1.4 ¢ = 27.6 ¢ per gallon

IMPORTANT INFORMATION TO KEEP IN MIND: Average Wholesale price is variable and adjusted quarterly Capped at 10% growth from the last quarter of the fiscal year 1 Penny = $30 million dollars annually

FY09 $1.786 x 9% = 16.1¢ (new floor) 5¢ 1.4¢ 22.5¢

AWP 9%

FY12 $2.378 21.4¢ 5¢ 1.4¢ 27.8¢

FY13 $2.616 23.5¢ 5¢ 1.4¢ 29.9¢

FY14*,** $2.878 25.9¢ 5¢ 1.4¢ 32.3¢

FY14 *** $2.708 24.4¢ 5¢ 1.4¢ 30.8¢

FY14 ****$2.633 23.7¢ 5¢ 1.4¢ 30.1 ¢

* 1st Quarter ** 2nd Quarter *** 3rd Quarter ****4th Quarter

KENTUCKY GASOLINE TAXVariable Tax Rate

KRS 138.220(1)(awp*9%)MF User Tax

KRS 138.220(2)UST

KRS 224.60 Total

FY15* $2.722 24.5¢ 5¢ 1.4¢ 30.9¢ FY15** $2.837 25.5¢ 5¢ 1.4¢ 31.9¢FY15*** $2.354 21.2¢ 5¢ 1.4¢ 27.6¢FY15**** $2.177 19.5¢ 5¢ 1.4¢ 26¢

FY16* $2.177 19.5.0¢ 5¢ 1.4¢ 26¢

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