1. 1 Idaho Highway Cost Allocation Study Patrick Balducci, Battelle Joe Stowers, Sydec July 27, 2010

2. 2 Battelle – Sydec Team Prime Contractor – Battelle: Patrick Balducci, Project Manager & Co-Principal Investigator Principal Subcontractor – Sydec: Joe Stowers, Co- Principal Investigator Other Members of Research Team: –Roger Mingo – pavements, vehicle weights, travel data –Harry Cohen – bridges, revenue attribution –Holly Wolff – model operation, programming

3. 3 Study Overview

4. 4 Key Questions Addressed by the 2010 Idaho HCAS Do highway users as a whole pay the full cost of highways or are they subsidized by non-users? Or do they subsidize non-users and if so, how much subsidy occurs? How do broad classes of highway users compare with each other in terms of paying their estimated shares of highway costs? Are some classes of users overpaying or underpaying and if so, by how much? How would specific changes in the tax structure or tax rates impact equity among highway users?

5. 5 HCASs Conducted in the U.S. In 1937, Oregon conducted the nation’s first HCAS. Over the past 73 years, at least 84 HCASs have been performed in 30 states.

6. 6 Overview of HCAS Process

7. 7 Key Study Parameters Idaho HCAS analysis time period – state fiscal years (SFYs) 2007-2012 Equity examined at the federal, state, and local levels of government Idaho HCAS uses 20 vehicle classes – automobiles, LT4s (pickups and SUVs), single unit trucks (3 classes), combination trucks (14 classes), and buses Expenditures and travel data broken down by 11 road classes (6 rural and 5 urban classes)

8. 8 FHWA’s State HCAS Model Idaho is one of at least 6 states to use the model Developed by members of 2010 Idaho HCAS team Previous users: Oregon, Texas, Vermont, Idaho, Minnesota, Nevada, others? Components of model: –CostAlloc.xls – performs allocation of all costs –Rev&Tables.xls – performs revenue attribution and creation of summary tables of results –DefaultData.xls – default data which can be used for any state for much of the model’s required inputs –SpecialVehicleAnalysis.xls – can be used as a follow-up to a state HCAS to evaluate equity for any selected vehicle (e.g., overweight permit vehicles)

9. 9 Major Expenditures Included for State Highway Cost Allocation Construction and other capital costs Maintenance and related costs Highway operations Administration and other overhead costs Division of Motor Vehicles Idaho State Police (Highway Patrol Budget)

10. 10 Major Cost Allocation Procedures (i) Pavement costs allocated with national pavement cost model (NAPCOM) using 2007 highway section data reported by ITD New bridge costs allocated based on an incremental analysis of the costs of constructing bridges using different design loadings Replacement bridge costs allocated based on estimates of the percentage of these costs that are incurred because the load-bearing capacity of existing bridges are deficient Bridge rehabilitation costs allocated based on fraction of costs associated with different types of bridge rehabilitation projects and extent to which expenditures for each type of project are load- related

11. 11 Major Cost Allocation Procedures (ii) Cost ElementMethod of Allocation DMV DMV programs divided between passenger vehicles and heavy trucks; allocated based on vehicle miles of travel (VMT) shares Administration (e.g., Director’s Office, Legal)VMT shares PlanningOverhead on construction activities Construction Activities under Highway Operations and Maintenance (O&M) BudgetOverhead on construction activities Design Activities under Highway O&MOverhead on construction activities Lab Testing Activities under Highway O&MOverhead on construction activities Equipment Expenditures under Highway O&MVMT shares General Activities under Highway O&MOverhead on highway O&M activities Safety Expenditures under Highway O&MPassenger car equivalent (PCE) – miles Traffic Control Activities under Highway O&MPCE-miles Maintenance Activities under Highway O&M Variable (VMT, axle-miles of travel, PCE- miles, or overhead on all maintenance activities) Highway Patrol Portion of Idaho State Police BudgetVMT shares

12. 12 Revenue Attribution Inputs Used in HCAS Model Receipts for each tax and fee broken down by vehicle class VMT broken down by: –Vehicle class –Fuel type Fuel economy by vehicle class Number of vehicle registrations by gross vehicle weight

13. 13 Idaho Highway User Revenues by Source and Level of Government (Annual Average – SFY 2007-2012) User FeeFederalStateLocal Gasoline Tax $110,513,290 $160,136,408 Special Fuels Tax $62,868,557 $65,898,469 Passenger Vehicle Registration Fees $51,750,702 $6,304,362 Truck and Bus Registration Fees $53,993,433 96-Hour, Single Trip, and Oversize Permits $5,935,462 Driver’s License Fees $7,496,147 Title Fees $4,731,849 Misc. Plate Fees and Penalties $9,966,388 Heavy Vehicle Use Tax $7,230,191 Trucks and Trailers Tax $12,667,236 Tire Tax $2,776,322 Total Federal $196,055,596 $359,908,858 $6,304,362

14. 14 Findings

15. 15 1994, 2002, and 2010 Idaho HCAS Results by Vehicle Class, State and Federal Revenues and Expenditures Definitions An unadjusted equity ratio is calculated by dividing attributed revenue by cost responsibility for each vehicle class. Example: $1.5 million in payments / $1 million in cost responsibility = 1.5 unadjusted equity ratio. An adjusted equity ratio is constructed by expressing each ratio as the percent of total highway user revenue paid by the percent of total cost responsibility. Example: 1.5% of total payments / 1.5% of total cost responsibility = 1.0 adjusted equity ratio.

16. 16 1994, 2002, and 2010 Idaho HCAS Results by Vehicle Class, State Revenues and Expenditures

17. 17 Revenues and Cost Responsibilities by Vehicle Class, State and Federal Combined Programs (Full GARVEE)

18. 18 Equity Ratios by Registered Gross Weight Class – State and Federal (Full GARVEE)

19. 19 Equity Ratios by Registered Gross Weight Class – State and Federal (Full GARVEE vs. Reduced GARVEE)

20. 20 Repeal of the Weight Distance Tax

21. 21 Key Findings (i) Idaho HCAS findings by vehicle class –Highway user payments fall short of expenditures by 21 percent ($139.5 million annually) for state and federal programs because Idaho is a donee state and also due to GARVEE bond program –At state level, automobiles overpaying by 26% (8% reduced GARVEE), federal and state combined 47% (38% reduced GARVEE) –Adjusted equity ratios for combination trucks is.73 state and.67 state and federal combined (full GARVEE) and.86 and.72 state and state and federal combined, respectively (reduced GARVEE) –Equity ratios fall as low as 0.36 among heavy vehicle classes (0.39 reduced GARVEE) Idaho HCAS findings by RGW class –Adjusted equity ratio for 80,000 pound trucks is.77 (.72 reduced GARVEE) for federal and state combined –Adjusted equity ratio for vehicles weighing less than 8,000 pounds is 1.32 (1.25 reduced GARVEE) for federal and state combined

22. 22 Key Findings (ii) GARVEE bond program influences results due to emphasis on construction and pavement expenditures –Majority of pavement costs are due to impacts of heavy axle loads –Large bond program increases responsibility of heavy trucks Repeal of weight-mile tax reduced revenues attributed to heavy trucks –Weight-mile tax repealed in 2000 and replaced in 2001 with a mileage-based registration fee system –ITD estimates impact of weight-mile tax repeal at $11.6 million annually

23. 23 Policy Analysis

24. 24 Policy Options Examined in 2010 Idaho HCAS Tax and fee options tied to existing system: 1.Increase both gasoline and special fuel tax rates by 5 cents per gallon 2.Increase gasoline tax rate by 5 cents per gallon; increase special fuel tax rate to achieve equity 3.Increase special fuel tax rate by 5 cents per gallon; increase gasoline tax rate to achieve equity 4.Increase all vehicle registration fees by 10 percent 5.Increase passenger vehicle registration fees by 10 percent; adjust heavy truck registration fees to achieve equity 6.Increase heavy truck registration fees by 10 percent; adjust passenger vehicle registration fees to achieve equity Implementation of a new fee 7.Institute a VMT tax for all vehicles with RGWs in excess of 26,000 pounds

25. 25 Revenue Impact of Policy Options ($Millions in Annual Revenue)

26. 26 Impact on Equity of Policy Options (Full GARVEE Bond Scenario)

27. 27 Impact on Equity of Policy Options (Reduced GARVEE Bond Scenario)