R EVENUE E STIMATE $ Presented to the HRTPO Legislative Ad-Hoc - PowerPoint PPT Presentation

R EVENUE E STIMATE $ Presented to the HRTPO Legislative Ad-Hoc Committee Hampton Roads Transportation Planning Organization Greg Grootendorst Chief Economist, HRPDC September 25, 2015 201 2012 2 REGI EGI ON ONAL AL FOR FORECA ECAST ST

Examples of Potential Transportation Revenues • Fees on Cable & High Speed Internet Utility rights application fee • Amusement taxes • Well permit/pumping fee • Hotel Excise Tax • Car Registration Fees • Restaurant/Prepared Food Tax • Vehicle registration fee for public colleges/universities • Sin Taxes (Alcohol & Tobacco) • Vehicle use fees based on mileage (payable w/ state inspection) • Tax on Marine Vessels • Fees for Trucks Servicing the Port • Tax on personal watercraft • Transportation/Infrastructure fee for non-profits/governmental • Marine facilities tax organizations whose property is not subject to property taxes • Marine fuels tax • Off and/or on-street parking space fee • Real estate transfer tax • Inspection/Monitoring/Testing fee • Insurance premium taxes • Licensing and Recreational fee • Fertilizer/Pesticide taxes (Agricultural Chemicals) • Local Aquifer Protection fee • Disposal tax surcharge • Local Water/Wastewater Utility user fee • Litter control tax • Use of permitting fees • Airport use excise tax • Septic system impact fee • Energy & Utilities taxes • Solid waste disposal fee (Tipping Fees, Septage/Sludge Fees) • Dedicated value added taxes • State public water supply withdrawal fee • Improvement district tax • Bicycle registration fee • Special taxing districts • Traffic violation revenues - percentage • Building permit tax • Lottery and/or Casino Revenue / Dedicated Lottery • Head tax (based on # of employees) • Container Truck Surcharge • Vehicle Titling Tax • Impact Fees / Proffers for new development • Rental car taxes • Tourist tolls on roadways as part of toll system • Car Tax • Leasing of air space and right-of-way • Mortgage Transaction fee • Road branding / providing advertising space on public facilities • Recordation Fee • Development of public-private partnerships • Project investment fee • Tolls • Access rights fee • Construction fee • Connection fee • Franchise fee Revenue Estimates – HRTPO – Legislative Ad-Hoc 2

Motor Fuels Tax in VA State Gas Taxes Date Gasoline Diesel Prior to 7/1/2013 17.5 ¢ per gallon 17.5 ¢ per gallon Wholesale Wholesale 7/1/13 - 12/31/14 3.5% of = 11.1 ¢ per gal. 6% of = 20.2 ¢ per gal. Price* Price* Wholesale Wholesale 1/1/15 to present 5.1% of = 16.2 ¢ per gal. = 20.2 ¢ per gal. 6% of Price* Price* * The sales tax on fuel is applied to the statewide average wholesale price as determined by the DMV Commissioner. In the event that the average price falls below the price floor set in February of 2013, then the tax rate will be applied to the floor price of $3.17 for gasoline and $3.36 for diesel . Since the inception of the state motor fuels sales tax in July of 2013, sales taxes have been applied to floor prices, as average fuel prices have remained below the floor price. Revenue Estimates – HRTPO – Legislative Ad-Hoc 3

If Hampton Roads’ 2.1% Motor Fuels Tax had the VA Code Floor Prices Millions of Dollars Fiscal Year Revenue from Revenue with VA Increase in State Floor Current Law Floor Price Revenue $3.17 – Gas $3.36 – Diesel 2015 $ 38.6 $ 44.9 $ 6.3 2016 $ 28.2 $ 45.8 $ 17.6 As of 9/22/15 $1.51 – Gas 2017 $ 28.6 $ 46.2 $ 17.7 $1.45 – Diesel 2018 $ 29.5 $ 46.8 $ 17.4 2019 $ 30.0 $ 47.7 $ 17.7 2020 $ 30.5 $ 48.2 $ 17.8 2021 $ 31.2 $ 48.9 $ 17.8 2022 $ 32.2 $ 49.6 $ 17.4 Source: Virginia Department of Taxation and HRPDC Revenue Estimates – HRTPO – Legislative Ad-Hoc 4

There is a 6% Sales Tax in Hampton Roads Where does that money go? 6% 1% - Local option sales tax returned to locality 2.5% Base sales tax 5% plus taxes on food 1% - K-12 Education returned to localities based on school for home aged population consumption 4% 0.5% - Transportation Trust Fund 1.65% 0.15% - Diversion from GF to Transportation HMOF Sales taxes 3% dedicated to 0.7% - Hampton Roads Transportation Fund revenues transportation 0.3% - Transportation HMOF 0.25% - K-12 Education 2% 0.125% - Property tax relief fund 1.975% - General fund revenues 1% 0% Revenue Estimates – HRTPO – Legislative Ad-Hoc 5

Estimates* of Sales and Use Tax Exemptions Total State and Local Sales Taxes Collected in FY2014 $5,273.3 (M) $23,633.3 (M) Estimated Value of Exemptions in FY2014 Estimated Taxable Sales if All Exemptions Removed $555,391.2 (M) 1% of Taxable Sales with No Exemptions $5,553.9 (M) $208.8 (M) 1% Local Option Revenues in HRTPO Jurisdictions $1,032.1 (M) Estimated 1% HRTPO Sales Tax Revenues with No Exemptions *Estimates derived from the Evaluation of Virginia’s Sales Tax Exemptions study produced by Chmura Economics & Analytics in 2011 Revenue Estimates – HRTPO – Legislative Ad-Hoc 6

Taxable Sales Estimates* by Exemption Category in 2014 Service Miscealleous Commodity and Governmental Commercial and Industrial Other Agricultural Nonprofit Media $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 Millions of Dollars *Estimates derived from the Evaluation of Virginia’s Sales Tax Exemptions study produced by Chmura Economics & Analytics in 2011 Revenue Estimates – HRTPO – Legislative Ad-Hoc 7

Estimate* for 2014 Taxable Sales of the Top 50 Sales Tax Exemptions in VA (In millions of dollars) 1 Professional, Insurance, and Personal Service $ 267,698.1 26 Research & Development $ 214.4 2 Goods Delivered Outside the Commonwealth $ 95,320.1 27 Railway $ 205.2 3 Motor Vehicles $ 20,852.8 28 Goods for Future Lease/Rent $ 198.4 4 Manufacturing Exemption $ 12,565.5 29 Drugs Used by Doctors Offices $ 177.9 5 Gas, Electricity, Water $ 10,319.2 30 Airline $ 157.4 6 Prescription Drugs $ 9,860.9 31 Inputs in Feed Production $ 109.5 7 Fuel $ 9,591.8 32 Goods Used by Nuclear Power Plants $ 82.1 8 Food for Home Consumption $ 8,426.4 33 Multi-fuel Heating Stove $ 82.1 9 Publications of Newspapers and Periodicals $ 2,339.8 34 Leasing of Audio/Video Tapes $ 79.8 10 Advertising $ 2,330.7 35 School Holiday $ 63.9 11 Labor and Service for Remodeling Property $ 1,226.9 36 Data Center $ 59.3 12 Nonprofit Exemptions $ 1,197.3 37 Medical Equipment and Supplies $ 52.5 13 Political Divisions $ 1,190.4 38 Railroad Rolling Stock $ 43.3 14 Poultry and Animal $ 1,090.1 39 Shipping $ 38.8 15 Accomodation more than 90 Days $ 750.3 40 Natural Gas Extraction and Processing $ 38.8 16 Propane, Gas, Coal, Oil for Domestic Consumption $ 702.4 41 Hurricane Equipment $ 38.8 17 Nonprescription Drugs $ 636.3 42 Broadcast Equipment $ 25.1 18 Inputs in Agricultural Production $ 542.8 43 Energy Star $ 22.8 19 School Lunch/Textbooks $ 522.2 44 Handicapped Equipment $ 20.5 20 Food Stamps $ 440.1 45 Drugs Used by Veternarians $ 18.2 21 Purchase by Contractor $ 419.6 46 Taxable Medical Supply $ 18.2 22 Meal to Restaurant Employees $ 405.9 47 Canteen Sales at Veterans Affairs $ 6.8 23 Catalog and Brochures $ 317.0 48 Textile Product Leasing $ 6.8 24 Seeds, Crops, Plants $ 262.3 49 Modular Building $ 6.8 25 Drugs Used by Hospitals, etc. $ 262.3 50 Taxicab Driver $ 4.6 *Estimates derived from the Evaluation of Virginia’s Sales Tax Exemptions study produced by Chmura Economics & Analytics in 2011 Revenue Estimates – HRTPO – Legislative Ad-Hoc 8

Previously Discussed Revenue Strategies Alternate Revenue Generation Scenarios Strategy Estimated Revenue Local sales & use tax of 1% (levied according to existing local option) $ 213,159,000 Local income tax of one-half of one percent (0.5%) $ 142,757,000 Add 1% to the motor vehicle sales & use tax $ 34,662,000 Tax increase of 5¢-per-gallon on motor vehicle fuels $ 33,269,000 Cigarette tax of 50¢ per pack $ 32,566,000 Charge of $10 per container on container traffic through the ports $ 20,524,000 Increase of 1¢ per $100 of Assessed Value of Real Estate $ 16,157,000 Vehicle Registration Fee of $10 per vehicle $ 14,800,000 Add 1% to the hotel and motels room tax $ 8,326,000 Recordation tax of 1¢ per $100 of assessed value $ 3,689,000 Building permit tax of 10¢ per $100 of assessed value $ 979,000 Building permit flat fee of $100 $ 609,000 Revenue Estimates – HRTPO – Legislative Ad-Hoc 9

Greg Grootendorst HRPDC Chief Economist ggrootendorst@hrpdcva.gov Revenue Estimates – HRTPO – Legislative Ad-Hoc 10