WORKING GROUP ON KENTUCKY’S TRANSPORTATION INFRASTRUCTURE KEVIN PULA SENIOR POLICY SPECIALIST - TRANSPORTATION NATIONAL CONFERENCE OF STATE LEGISLATURES Frankfort, KY| September 7, 2017
National Conference of State Legislatures Non-profit, bi-partisan organization Members are all 50 state legislatures, 7,383 legislators and 30,000 legislative staff in 50 states, D.C. and U.S. territories. Offices in Denver and D.C. Among our goals - To provide legislatures with information and research about policy issues, both state and federal. NCSL tracks state policy developments in all public policy areas including transportation funding & finance, traffic safety and public transportation.
Overview State Transportation Funding Statistics & Trends Recent Federal Action State Reliance on Motor Fuel Taxes Recent State Legislation Increasing Transportation Funding Other Transportation Funding Approaches Utilized by States
State vs. Local vs. Federal Strong States, Strong Nation
Inflation Adj. Spending Decreasing Strong States, Strong Nation
Nominal vs. Real Spending Strong States, Strong Nation
How are Revenues Being Spent? Strong States, Strong Nation *** 56% of transportation spending is on new capacity ***
The 2015 FAST Act Strong States, Strong Nation $70 billion in “pay-fors” $305 billion, 5-year reauthorization $53.3 B from Federal Reserve Surplus Account 5% increase; growing to $6.9 B in reduced Federal 15% for Highways Reserve Stock dividend 8% increase; growing to payments 18% for Transit $6.2 B from sale of Strategic Petroleum No New User-Based Reserve Revenues for HTF
Changes to Federal Programs Strong States, Strong Nation Surface Transportation Block Grant Program $2 B increase Percentage split adj. Transportation Infrastructure Financing and Investment Act Lowered project size requirements Increased share going to rural projects Funding Alternatives Grants $95 million in competitive grants Mileage-based user fee pilots
Strong States, Strong Nation
Sources of State Funding Strong States, Strong Nation 2016 Transportation Governance and Finance Report Found 50+ funding mechanisms for transportation
Fifty-Four Funding Sources Strong States, Strong Nation
Motor Fuel Tax Structures Strong States, Strong Nation Motor Fuel Taxes Variable/ Fixed Cent- per-Gallon Indexing Subject to Energy CAFE Population CPI Percentage Prices Sales Tax One Time Set Annual Increases Increase Retail Wholesale
Decreasing Value of State Gas Taxes Motor fuel tax revenues account for 1.6 percent (2011) of total state and local general revenues. Down from 2.3 percent in 1993. Small increases have lagged behind growing funding needs. Sources : Tax Policy Center, 2014; ITEP, 2015; NCSL, 2014
19 states have not raised their gas tax in more than a decade. 13 states have not raised their gas tax in over 20 years .
Impact of CAFE Standards 54.5 mpg goal by 2025 The impact will increase significantly 67 % mpg increase in 20 years
Gas Tax Increases Strong States, Strong Nation 26 States & D.C. have enacted legislation since 2013 No strong demographic, regional or __ = Republican political trends __ = Democrat __ = Split Legislature
Variable vs. Fixed Taxes 20 states , representing 57% of population, now index their state MFT Strong States, Strong Nation 2013 - Aggressive Indexing •MA, MD, PA, VA, VT & DC 2014 – Mild Indexing •RI & NH indexed; MA voters repeal indexing provisions 2015 – Mixed Bag •GA, NC, and UT indexed •IA, ID, NE, SD and WA kept fixed increase 2016 – Minimal Action • New Jersey indexed with restraints 2017 – Split Approaches •CA, IN, UT and WV enhanced existing indexing mechanism •MT, OR, SC and TN implemented fixed increases.
Non-Gas Tax Options 2015 2016 2017 Strong States, Strong Nation Connecticut – Authorized $2.8 Indiana – Budget Reserve Transfers & Local Idaho – Authorized highway transportation GARVEE bonds billion in bonding Wheel Tax Delaware – Increased various Maine – Authorized up to $100 million in Minnesota – Authorizes $940 million in highway bonds, $300 million in transportation fees and taxes bonds for transportation general fund transfers to transportation and reallocates various tax revenues for use on transportation. Establishes a $75 fee on electric vehicles. Georgia – Hotel tax and local New Hampshire – Adopted a 10 year Utah – Authorized $1 billion in general obligation bonds for option taxes for transportation transportation improvement plan and transportation over the next four years authorized GARVEE bonds Massachusetts – Authorized $200 Rhode Island – Established commercial West Virginia – Authorized $500 million in grant anticipation notes for million in bonding vehicle only tolls & authorized GARVEE bonds transportation North Dakota – Dedicated oil & South Carolina – Moved $200 million in Wyoming – Increased vehicle registration fees, commercial vehicle fees gas revenues to transportation various transportation fees from GF to TTF. and other transportation fees. Cut general fund transfers to Restructured State Infrastructure Bank, transportation by approximately the same amount. allowing up to $2.2 billion in bonds. Texas – Dedicated oil & gas Washington – Authorized the issuance of severance taxes to transportation bonds for transportation payable with excise tax revenues from 2015 fuel tax increase
Gas Tax Increase Indexing Provisions Registration Fee Increases Establishes Electric Estimated Revenue Other (Diesel) Vehicle Fee Increase California Creates Transportation Eliminates “Gas Tax Swap”; Stops diversions SB 1 12 CPG Yes, indexed to Improvement Fee ranging from New $100 fee, indexed $52.4 billion over ten of $706 million to the General Fund from (20 CPG) inflation $25 to $175 based on vehicle to inflation years Transportation Fund value Indiana Strong States, Strong Nation Indexed to inflation New annual $150 fee Establishes framework for tolling highways; HB 1002 10 CPG but limited to 1 CPG $15 new improvement fee for EVs and $50 for $1.2 billion annually Increases tax on aviation and alternative annual increase hybrids fuels; adjusts distribution formulas Montana 6 CPG over 6 years $27 million + Allows state to meet federal match; Adjusts HB 473 X X X (2 CPG over 6 years) annually distribution formulas Oregon Creates new privilege tax on the sale of motor HB 2017 Increase plus indexed to vehicle $5.2 billion over 10 vehicles, creates a new sales tax on bicycles 10 cents over 6 years X $110 fuel efficiency years and establishes a payroll tax increase dedicated to transportation South Carolina Establishes a road use fee for commercial New $120 fee for EVs $181 million in FY 17- HB 3516 12 CPG over 6 years $16 increase to biennial fees and motor vehicles; Increases driver license fees; X and $60 for hybrids 18 growing to $727 $250 first time registration fee Requires Transportation Asset Management (both biennial) million by FY 23-24 Plan; Makes various tax reforms Tennessee New $100 fee for EVs HB 534 6 CPG over 3 years X $5 increase and increased tax rates $350 million annually Makes various income and sales tax reforms (10 CPG over 3 years) on alternative fuels Utah Accelerated indexing SB 276 No immediate increase but will lead to an Neutral provisions from 2015 X X N/A effective increase if fuel prices rise. legislation West Virginia Adjusted existing Increased various motor vehicle $200 for EVs and $100 HB 1006 3.5 CPG price floor on $140 million annually fees for hybrids variable rate tax * The New Mexico Legislature passed legislation to increased motor fuel taxes in both the 2017 regular session and 2017 special session. The Governor vetoed both bills.
Electric Vehicle Fees Strong States, Strong Nation Georgia and W. Virginia are highest in nation at $200 ID, IN, MI, OK and WV impose fees on Hybrids as well
U.S. Toll Facilities Strong States, Strong Nation
Toll Revenues Strong States, Strong Nation
18 th highest Strong States, Strong Nation Registration & Weight Fee ($2,126) 8th highest diesel tax 3 rd highest total tax/fees on trucks
Weight-Distance Taxes Strong States, Strong Nation KY – 2.85 cpm NM – 4.378 cpm NY – 3.9 cpm OR – 13.16 cpm *cpm – cents per mile Ranked 1 to 4 in country for total charges to large trucks
Pay per Mile? Strong States, Strong Nation OreGo Pilot Turns 1 in July 5,000 volunteers; largest pilot to date California Road Charge Pilot 9-month pilot starting Summer 2016 Washington Steering Committee to study feasibility of RUC program Illinois Senate President Cullerton – SB 3267 (postponed) FAST Act – §6020 offers $95 million in competitive grants. US DOT supported various other small pilots.
Federal Grants Strong States, Strong Nation $14.2 million awarded in 2015 8 programs funded Testing a variety of approaches
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