1. Transportation leadership you can trust. prepared for Transportation Planning Board presented by Arlee Reno Cambridge Systematics, Inc. in cooperation with K.T. Analytics July 7, 2006 Progress Report on the Region’s Short Term Transportation Funding Needs Item 3

2. 2 Purpose of Progress Report Report on What Has Happened Since a “Time To Act” Program and Project Actions Since 2004 Finance Actions Since 2004 Update on Challenges Remaining Construction Costs are Increasing Congestion Continues to Grow both Highway and Transit Identify “Potential Solutions” - drawing on a review of promising national, state, and regional funding proposals

3. 3 Progress Since 2004 “Time To Act” Programmed Project Actions since 2004 Regional: Initiated the Regional Transportation Coordination Program to facilitate coordination and information sharing among the region’s transportation agencies Suburban Maryland: Intercounty Connector is moving forward with the project planning phase completed and funds identified. Northern Virginia: Dulles Corridor MOU signed with MWAA and project is also moving forward DC: Enhanced existing transit services by adding a circulator and opening the New York Avenue station WMATA: Approval of Metro Matters will buy additional buses and rail cars and other improvements

4. 4 Progress Since 2004 “Time To Act” Finance Actions since 2004 Metro Matters funding has been committed, but transit ridership constraint on Metrorail core capacity still applied beyond 2010 Davis Bill for funding Metro capacity and rehabilitation for existing system introduced Federal revenues for region increased under SAFETEA-LU ( but not dramatically: inflation has eroded all resources

5. 5 Street and highway construction costs have gone up the most drastically over the past few years Update on Challenges Construction costs are increasing * Table shows the PPI rates over the past twenty years as indexed

6. 6 Highway - Total lane miles of congestion have increased significantly since 2003 throughout the AM and PM Peak hours Greatest increase (64%) in the first hour of the PM peak (4:30 to 5:30) Transit – Crowding at peak and core capacity continues to be limited Update on Challenges Congestion Continues to Increase

7. 7 Potential Solutions Wide array of candidate revenue sources, but there is not a one size fits all solution for all agencies Fuel Taxes MD, VD, and DC are below the national average States such as Kentucky, Maine, Nebraska, New York, North Carolina, West Virginia, and Wisconsin already have variable rates, usually responding to price indices Tolling, Pricing, and Other Direct User Fees

8. 8 Candidate State and Local Revenue Sources ScopeYield Locations Used Specific Tool Primary PurposeProgramProject Potential Yield I. Revenue Generation Fuel Taxes Raising the motor fuel excise (per gallon) tax X H All states, federal Indexing of the motor fuel tax (can be indexed to inflation or to other factors such as program costs) X H FL, KY, ME, NE, NY, NC, PA, WV Sales tax on motor fuel X H CA, GA, HI, IL, IN, MI, NY Other motor fuel-related taxes X H NY, PA Registration and Vehicle Fees Raising registration or related fees X H All states Excise tax on vehicle sales X H KS, NC, NE, MN, MO, OK, SD Tolling and Pricing, and Other User Fees Tolling new or existing roads and bridges XM TX, FL, VA HOT lanes, express toll lanes, truck toll lanes XM CA, CO, GA, MN, TX VMT fees X H OR testing, 15 state pooled fund Transit fees (fares, park-and-ride fees, other) X H All transit agencies Local Option and Beneficiary charges Beneficiary charges/value capture (special assessment impact fees) and tax increment financing XL CA, FL, OR Permitting local option taxes for highway and transit improvements XXM Multiple General Revenue Sources Most States and localities

9. 9 Candidate State and Local Financing Techniques ScopeYield Locations Used Specific Tool Primary PurposeProgramProject Potential Yield II. Financing Techniques Leveraging of Federal Grants GARVEE bondsxxAK, AK, AR, AZ, CA, CO, KY, ME, MT, NM, ND, OH, OK, PR, RI, VI State Infrastructure BanksxxAL, AZ, AR, CA, CO, DE, FL, IN, IA, ME, MI, MN, MO, NE, NM, NY, NC, ND, OH, OR, PA, PR, RI, SC, SD, TN, TX, UT, VT, VA, WA, WI, WY Section 129 LoansxTX Leveraging of User Fees or Tax Revenues with Credit Instruments TIFIA/RRIF AssistanceX CA, NV, TX, NY, SC, FL, PR, DE, DC, MD, VA, LA, RI, IA, ME, MN, TN, AK, MO Leveraging of User Fees and/or Tax Revenues with Tax Subsidies Private activity bonds X None to date ($15 billion cap). Long history of PAB use for airports, seaports, etc. Tax credit bondsXXNot yet enacted for transportation; current tax credit bond programs exist for school, housing State/Local Initiatives Leveraging of Tax Revenues (Shadow tolls/Availability Payments) X United Kingdom, Finland, Germany, FL pending Leveraging of User Fees (Asset Leases)X IL, IN

10. 10 Candidate State and Local Management Techniques ScopeYield Locations Used Specific Tool Primary PurposeProgramProject Potential Yield III. Management Techniques Federal Initiatives Grant management (Cash Flow) tools, including flexible match, tapered match, toll credits, AC/PCAC (SEP ‑ 15) X Many State/Local Initiatives Public-private partnerships (PPP) for project delivery X AL, AK, AZ, CA, CO, DE, FL, GA, IN, LA, MD, MN,MO, NV, NC, OR, PR, SC, TX, UT, VA, WA

11. 11 Potential Solutions A Longer Term Option – VMT Fees Oregon’s field test of technologies for collecting VMT fees is an innovative “transition” strategy VMT fees are collected at the pump, with a record of miles since the last fueling rather than gallons used No more private information is collected than during current fuel purchases Additional testing of how a VMT fee system works will be necessary to examine public acceptability

12. 12 States that Authorize Local Option Gasoline Taxes for Transportation Source: Institute of Transportation Studies, University of California at Berkeley, “Local Option Transportation Taxes in the United States,” March 2001.

13. 13 States that Authorize Local Option Sales Taxes for Transportation Source: Institute of Transportation Studies, University of California at Berkeley, “Local Option Transportation Taxes in the United States,” March 2001.

14. 14 PPP’s Have Been Used for Transportation Projects in a Number of States Partial List of Financed Projects; Source: Public Works Financing. Reno Rail Corridor SR 125 Toll Road -Hudson-Bergen Light Rail Line Chicago Skyway Asset Sale Dulles Greenway Miami Intermodal Center Central Texas Turnpike Pocahontas Parkway Camden Trenton Light Rail Line Project Location Intermodal Projects in Green Highway Projects in Blue Transit Projects in Yellow San Joaquin Hills Toll Road Foothill Eastern Toll Road Alameda Corridor -Trans Texas Corridor Denver E-470 Northwest Parkway NM 44 (US 550) Southern Connector Hiawatha Light Rail Line Jamaica JFK Airtrain Tacoma Narrows Bridge Osceola Parkway Las Vegas Monorail I-15 Reconstruction AZ-17

15. 15 States Issuing Debt for Transportation Purposes G.O. versus Special Revenue* PR States with Special Revenue Bond credit for transportation (excluding GARVEE Bonds) States with General Obligation Debt Outstanding for Highway or Transit Purposes * Excludes GARVEE Bonds backed by Federal-aid) Source: FHWA Highway Statistics, 2004, Bond Rating Agencies (data being confirmed)

16. 16 Next Steps Working Group has made suggestions on the draft progress report Receive comments and suggestions from the Technical Committee (today’s goal) Prepare final for TPB review