Funding Transportation in the 21st Century

1
Funding Transportation in the 21st Century

• (Its harder to do then you think.)
• Neal Menkes
• Virginia Municipal League
• November 29, 2007

2
Can we talk?

• Political Process
• Windows of Opportunity
• Prove the need
• Determine amount of resources
• Who pays? How much?
• Seal the deal
• Land use

3
1986 Special Session

• Called to respond to Governors Blue Ribbon
  Commission
• Increased taxes provided funding for mass
  transit, airports, roads, and port facilities
• Gas tax increased 2.5 cents to 17.5 cents per
  gallon
• Motor vehicle sales and use tax increased 1.0
  percent to 3.0 percent
• Motor vehicle license fee increased by 3.00
• State sales and use tax increased by 0.5 percent
  to 4.5 percent

4
Changes in 1986 didnt keep up with demand
5
2004 SessionSenate passes first transportation
funding package (by either chamber) in 18 years

• SB 635 authorized an estimated 1.6 billion in
  new transportation-only taxes for the 2004-2006
  biennium.
• In the Senate budget
• 949.0 million for highway construction
• 347.0 million for FRAN debt service
• 177.0 million for mass transit
• 51.0 million for ports
• 29.0 million for aviation
• The House budget included 132. 7 million in new
  general fund revenue for transportation in
  2004-2006

6
2005 SessionWindow of Opportunity is open!

• Governor introduces 824.0 million package --
  373.6 million GF and 450.5 million NGF
• NGF dollars are from surplus revenues and changes
  to 2005 and 2006 TTF forecast
• GF dollars include 350.0 million of one-time
  revenue
• GF dollars to go for transit, public-private
  partnership fund, local partnership fund,
  elimination of road project deficits
• New rail partnership fund created. Federal
  dollars to go to maintenance for first time
  (97.4 million)

7
2005 SessionReliable Sustainable Revenue

• House puts together a transportation initiative
  pushes more money to NVA and Hampton Roads (HB
  2771) passes abusive driver bill (HB 1563)
• Includes an additional 81.3 million from the
  General Fund
• Senate passes resolution to put together another
  Blue Ribbon Commission cuts 160.0 million from
  Governors proposal

8
2005 SessionCompromise Crafted

• General Assembly passes 848.1 million
  transportation package -- 347.6 million GF and
  500.5 million NGF
• General fund dollars 240.0 million is
  one-time 107.6 million from dedicated of
  insurance taxes attributable to car insurance
  premiums.
• No agreement on Blue Ribbon Commission
• No abusive driver fees

9
2006 SessionEveryone agrees to disagree

• Senate creates bi-partisan START group in 2005 to
  identify the principles and actions needed to
  create a modern transportation system
• Introduces legislation (SB 708, SB 373, SB 374,
  and SB 423) to address funding, planning and
  local land use issues
• 1.0 billion per year in dedicated revenue
• Includes 369.8 million of one-time GF

10
2006 SessionEveryone agrees to disagree

• Governor proposes 624.5 million GF, including
  285.5 million of on-going GF support and new
  transportation taxes (850.0 million in FY 2008)
• Supports changes in planning and land use
• Overall package is similar in scope, amounts and
  policy to Senate package

11
2006 SessionEveryone agrees to disagree

• House 360.9 million package in FY 2008 relies on
  general fund revenues and abusive driver fees
• 360.9 million from general fund sources
• 136.8 million in abusive driver fees
• House spending plan includes 64.6 million for
  NVA and 47.3 million for Hampton Roads regions
  to launch a transportation debt program using
  10-year notes
• Other uses of the funds include maintenance, a
  local congestion relief fund, transit, FRANS debt
  service, local cost sharing, and TPOF

12
2006 SessionEveryone agrees to disagree

• Good News
• All parties agreed on support for new
  construction, transit and local revenue sharing.
• Bad News
• No consensus on use of debt, general fund
  revenues, abusive driver fees, and taxes
• In late Spring, Senate passed measures (Senate
  Bills 5013, 5014, 5015, and 5016) setting up a
  new statewide funding scheme and regional funding
  mechanisms for NVA, Hampton Roads and others.
  All these bills died in House Finance.

13
2006 SessionAnd We End Up With

• General Assembly approves one-time general fund
  appropriation of 339.0 million in state budget
• Money is contingent upon subsequent passage of a
  comprehensive funding package
• Several START recommendations were enacted.

14
James Freeman Clarke Quotes PoliticsA
politician thinks of the next election - a
statesman, of the next generation.
15
2007 Session

• The General Assembly approved 500.0 million from
  the general fund as a one-time appropriation.
• 305.0 million to the TPOF
• 65.0 million for specific rail projects
• 60.0 million for transit capital projects
• 50.0 million for Virginia Port projects
• 20.0 million for local revenue sharing

16
House Bill 3202

• HB 3202 includes a statewide and regional funding
  mechanisms.
• The statewide component provides 222.4 million
  in FY 2008, relying on abusive driver fees,
  vehicle registration fees, liquidated damages,
  insurance premium taxes, recordation taxes, and
  an increase in the diesel fuel excise tax
• There is also a 3.0 billion bond package for
  state projects.

17
HB 3202 Regional Plans

• The Northern Virginia and Hampton Roads plans are
  similar but not identical.
• Both include vehicle rental tax, commercial real
  estate tax at different rates, grantors tax,
  safety inspection fee, initial vehicle
  registration fee, sales tax on auto repairs, and
  regional vehicle registration fee
• NVA has a 2 transient occupancy tax. Hampton
  Roads has a 2 regional gas tax.