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THE FEDERAL HIGHWAY TRUST FUND IN CRISIS THE IMPACT ON SURFACE TRANSPORTATION PROGRAMS
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Transcript of THE FEDERAL HIGHWAY TRUST FUND IN CRISIS THE IMPACT ON SURFACE TRANSPORTATION PROGRAMS
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THE FEDERAL HIGHWAY TRUST FUND IN CRISISTHE IMPACT ON SURFACE TRANSPORTATION
PROGRAMS
Jack BassoChair
Mileage Based User Fee Alliance
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Sources: Congressional Budget Office, Office of Management and Budget
The national investment on roads and transit has gradually declined.
0.00%
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1941 1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011
Federal Transportation Spending as a Percentage of GDPHighway Transit Airports
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Source: American Society of Civil Engineers
And infrastructure conditions continue to deteriorate.
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Source: American Society of Civil Engineers
Meantime, the public already bears additional costs indirectly.
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Source: World Economic Forum, The Global Competitiveness Report
Compared to our global peers, we’re falling further behind on the quality of infrastructure.
2008-2009 2012-2013
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In 2012, MAP-21 was able to provide a five-year policy bill—
but with only two years of funding.
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Like prior transportation bills, MAP-21 relies on the Highway Trust Fund—the backbone of Federal
surface transportation funding since 1956.
Source: Gary McCoy, CagleCartoons.com
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In 2011, motor fuel taxes comprised 91% of Highway Trust Fund revenues.
But they face an uncertain long-term future.
Source: Federal Highway Administration, Highway Statistics, 2011
66.3%
24.8%
6.5%
1.2% 1.0%
0.1% Highway Trust Fund Receipts
Gasoline Fuel Tax
Diesel and Special FuelsFuel TaxTruck/Bus/Trailer Tax
Tire Tax
Heavy Vehicle Use Tax
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Highway Trust Fund Headwinds:#1. Americans aren’t driving as much.
Source: Federal Highway Administration
2,250
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2,950
3,050
Billi
ons o
f Mile
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Vehicle Miles Traveled - July 1993 to July 2013(Moving 12 Month Total)
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Historical CPI-U Estimated CPI-U Based on 18-year Average from 1993-2011
PURCHASING POWER LOSS OF GAS TAX DUE TO INFLATIONPURCHASING POWER LOSS OF GAS TAX DUE TO INFLATIONPURCHASING POWER LOSS OF GAS TAX DUE TO INFLATION
52% Purchasing Power Loss by 2023
PURCHASING POWER LOSS OF GAS TAX DUE TO INFLATION
37% Purchasing Power Loss by 2012
Highway Trust Fund Headwinds:#2. Gas tax has lost its purchasing power.
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Source: Congressional Budget Office
$57B drop
Highway Trust Fund Headwinds:#3. Alternative fuel vehicles will further erode
future HTF receipts.
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• 15 September 2008: $8.017 billion General Fund transfer to HTF
• 7 August 2009: $7 billion General Fund transfer to HTF• 18 March 2010: $19.5 billion General Fund transfer to
the Highway Trust Fund• 6 July 2012: $2.4 billion Leaking Underground Storage
Tank Trust Fund transfer to HTF• FY 2013: $6.2 billion General Fund transfer to HTF• FY 2014: $12.6 billion General Fund transfer to HTF
(scheduled)• Total General Fund transfers to Highway Trust Fund:
$53.3 billion since 2008
In the meantime, cash transfers from theGeneral Fund have avoided the Highway Trust Fund “fiscal cliff.”
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But outlays will outpace receipts by about $15 billion per year and more for a foreseeable future.
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Highway Trust Fund Receipts and Outlays DiscrepancyReceipts Outlays
Excludes $8.017 billion transfer from General Fund to Highway Account of HTF in September 2008; $7 billion transfer from General Fund to Highway Account of HTF in August 2009; $19.5 billion transfer from General Fund to Highway and Mass Transit Accounts of HTF in March 2010; $2.4 billion transfer from Leaking Underground Storage Tank Trust Fund to HTF in July 2012; $6.2 billion transfer from General Fund to Highway Account of HTF in FY 2013; $10.4 billion transfer from General Fund to Highway Account of HTF in FY 2014; $2.2 billion transfer from General Fund to Mass Transit Account of HTF in FY 2014.
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$1.3 $1.3 $1.3 $1.2 $1.2 $1.3$0.0
$1.3 $1.3 $1.4 $1.4 $1.4 $1.4 $1.5 $1.5
$40.7 $41.2 $40.8$38.9 $39.4 $40.0
$0.2
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$33.4$34.3 $35.0 $35.7 $36.2 $36.6
$9.4
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Highway Safety Federal-aid Highway Transit
Estimated Federal Highway and Transit Obligations from Highway Trust FundIf no new revenues are found, federal highway obligations will fall by almost 100% in FY 2015
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So what can be done?
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There is currently no shortage oftechnically feasible revenue options.
Version 11: 2013-10-07
Funding MechanismsIllustrative
RateRevenues
2014
Average Revenues 2015-2020
Total Revenues 2015-2020
Container Tax $1.00 per TEU= 421$ $15.00 6,317$ 6,893$ 41,361$ Customs Revenues (Partial Dedication) 1.0% of Receipts = 357$ 1.0% 357$ 408$ 2,451$ Drivers License Surcharge (Annual) $1.00 Surcharge = 222$ $5.00 1,109$ 1,154$ 6,926$ Excise Tax on Diesel (Increase) 1¢ per Gallon = 399$ 15.0¢ 5,983$ 6,480$ 38,877$ Excise Tax on Diesel (Indexing) n/a 440$ 1,031$ 6,183$ Excise Tax on Gasoline (Increase) 1¢ per Gallon = 1,282$ 10.0¢ 12,823$ 13,367$ 80,202$ Excise Tax on Gasoline (Indexing) n/a 1,046$ 2,384$ 14,303$ Freight Bill - All Modes 1.0% of Sales = 8,318$ 1.0% 8,318$ 9,236$ 55,415$ Freight Bill - Truck Only 1.0% of Sales = 7,221$ 1.0% 7,221$ 8,018$ 48,110$ Freight Charge - All Modes (Ton) 1¢ per Ton = 180$ 25.0¢ 4,492$ 4,988$ 29,929$ Freight Charge - All Modes (Ton-Mile) 1¢ per Ton-mile = 47,530$ 0.5¢ 23,765$ 26,389$ 158,334$ Freight Charge - Truck Only (Ton) 1¢ per Ton = 124$ 25.0¢ 3,098$ 3,440$ 20,641$ Freight Charge - Truck Only (Ton-Mile) 1¢ per Ton-mile = 13,911$ 0.5¢ 6,956$ 7,724$ 46,342$ Harbor Maintenance Tax (Increase) 0.1% Tax = 1,331$ 0.5% 6,657$ 7,264$ 43,584$ Heavy Vehicle Use Tax (Increase) 100% Increase = 852$ 15.0% 128$ 163$ 977$ Imported Oil Tax $1.00 per Barrel = 3,528$ $1.00 3,528$ 3,528$ 21,171$ Income Tax - Business (Partial Dedication) 0.1% of Current Taxes = 440$ 1.0% 4,396$ 4,847$ 29,082$ Income Tax - Personal (Partial Dedication) 0.1% of Current Taxes = 1,508$ 1.0% 15,084$ 18,393$ 110,356$ Oil, Gas, Minerals Lease - Rent, Bonus, and Other Income (Partial Dedication) 1.0% of GF Revenues = 15$ 50.0% 750$ 750$ 4,500$ Oil, Gas, Minerals Lease - Royalties (Partial Dedication) 1.0% of GF revenues = 55$ 50.0% 2,750$ 2,750$ 16,500$ Registration Fee on Light Duty Vehicles (Annual) $1.00 Fee = 259$ $10.00 2,594$ 2,731$ 16,387$ Registration Fee on Trucks (Annual) $1.00 Fee = 9$ $15.00 131$ 133$ 797$ Sales Tax on Auto-related Parts and Services 1.0% of Sales = 2,567$ 1.0% 2,567$ 2,883$ 17,299$ Sales Tax on Fuel - Diesel 1.0% of Sales = 1,253$ 11.0% 13,782$ 15,839$ 95,033$ Sales Tax on Fuel - Gasoline 1.0% of Sales = 3,711$ 8.0% 29,686$ 31,126$ 186,753$ Sales Tax on New and Used Light Duty Vehicles 1.0% of Sales = 2,619$ 1.0% 2,619$ 2,619$ 15,715$ Sales Tax on New Light Duty Vehicles 1.0% of Sales = 1,625$ 1.0% 1,625$ 1,625$ 9,752$ Sales Tax on Trucks and Trailers (Increase) 1.0% of Sales = 268$ 5.0% 1,340$ 1,677$ 10,062$ Tire Tax on Light Duty Vehicles $1.00 Fee = 195$ $3.00 584$ 615$ 3,687$ Tire Tax on Trucks (Increase) 100% Increase = 434$ 10.0% 43$ 54$ 326$ Vehicle Miles Traveled Fee on Light Duty Vehicles (All Miles) 1¢ per VMT = 26,891$ 2.0¢ 53,781$ 55,852$ 335,111$
Matrix of Illustrative Surface Transportation Revenue Options(all revenue estimates in $ millions)
Mechanism Yield 2014
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State revenue sources for roads, bridges, rail and transit: Fuel taxes (all states + DC + PR); 6 index; largest single source of highway funds
used by half the states Sales taxes on fuel, or other taxes on distributors or suppliers (14 states + PR) Motor vehicle or rental car sales taxes (29 states) Vehicle registration, license or title fees (48 states + PR) Vehicle or truck weight fees (37 states) Tolls (24 states + PR, plus non-state toll entities) General funds (34 states + DC; Vt. on occasion) Interest income (37 states + DC + PR) Other (40 states + DC + PR)
Source: National Conference of State Legislatures.
In fact, States have long relied on a variety of revenue sources to invest in transportation.
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•Tools that borrow against or leverage state revenues for surface transportation projects:o General obligation or revenue bonds (44 states + DC + PR)o GARVEE bonds (33 states + DC + PR)o Private Activity Bonds (PABs) (6 states) o TIFIA federal credit assistance (12 states + PR)o State infrastructure banks (SIBs) (34 states + PR)o Public-private partnerships (PPPs or P3s) (authorized in 33 states +
PR)o Design-build (authorized in 38 states + PR)
Source: National Conference of State Legislatures.
In addition, States also utilize various financing tools to accelerate project delivery.
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Recently, States have been leadingthe charge on meeting the
transportation revenue challenge.
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• Raising fuel taxes: California, Idaho, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, Pennsylvania, Utah, Vermont, West Virginia, Wisconsin, Wyoming
• Directing gas tax proceeds to direct transportation uses: Indiana
• Reducing gas tax, but increasing other taxes for a net increase for transportation: Pennsylvania, Virginia
Here is a list of transportation funding proposals under consideration, with
successful initiatives underlined.
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• State sales tax toward transportation: Arkansas, Idaho, Virginia, West Virginia
• Sales taxes on fuel, or other variable taxes/fees: District of Columbia, Idaho, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Pennsylvania, South Carolina, Utah, Virginia, West Virginia, Wisconsin
• Vehicle registration fees: Idaho, Michigan, New Hampshire, Pennsylvania, Virginia, West Virginia, Wisconsin
Here is a list of transportation funding proposals under consideration, with
successful initiatives underlined.
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• Vehicle Miles Traveled Fee (VMT) pilot projects: Oregon
• Framework to study a VMT fee: Arizona, Florida, Washington, Wisconsin
• Special fees or taxes for electric or alternative fuel vehicles: Arizona, Virginia, Washington, West Virginia
Source: National Conference of State Legislatures.
Here is a list of transportation funding proposals under consideration, with
successful initiatives underlined.
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Source: American Road and Transportation Builders Association
Illustratively speaking, shoring up the Federal Highway Trust Fund would not present an
unreasonable burden on Americans.
• The average household pays $46 in gas tax per month. This is less than per monthly cost of:– Electricity and gas: $160– Cell phone: $161– Cable and internet access: $124
• For example, a 10-cent increase in the federal gas tax translates to $1.15 more for the average driver per week—this action alone would fix the Highway Trust Fund.
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Why do we need strongFederal investment in transportation?
• Investment in transportation will save time and money, improve safety, and decrease congestion
• Investment in transportation will support economic development
• The transportation agencies spend their funds efficiently
• The transportation system has deteriorated, and current funding will not meet the needs
• Increased funding will be used to build specific projects
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Concluding Quote
“Together, the united forces of our communication and transportation systems are dynamic elements
in the very name we bear—United States. Without them, we would be a mere alliance of many
separate parts.”
President Dwight D. EisenhowerFebruary 22, 1955
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Questions?