1. Division of Budgets July 6, 2011 Transportation Funding in California

2. Transportation Funding & Challenges Funding complex and unstable Funding is insufficient Revenues currently declining Increased oversight Scarce resources increases scrutiny of every priority Increasing mandates Increased demand for transportation 2

3. 3 Reality Check What does it really take to fund a highway project? How many gallons of gasoline need to be sold to fund a single mile of road rehab? $240,000 avg cost per mile State excise tax of $0.18/ gal, only $0.1077/ gal remains with the State Need 2.2 million gallons! An average tanker truck holds 9,000 gallons of fuel, generating almost $1,000 in revenue. So a $1 million project would take the revenue from the fuel in over 1,000 tanker trucks!

4. 4 State Excise Tax Analogy

5. Statewide Transportation Resources: State, Local and Federal Funding Bonds are limited-term funding 5

6. Statewide Transportation Resources By Administering Agency 6

7. Major Uses of State Revenue Sources 7

8. Capital Investment Increasing Over Time… 8

9. …But Inflation Reduces Value for Money This chart compares the cumulative change in Vehicle Miles Travelled against the buying power of the excise tax, using the California Highway Construction Cost Index 9

10. External Factors Limit Available Funding 10

11. The Future Proposition 1B bonds will be exhausted ARRA spending will complete Inflation expected to outweigh revenue growth Cost of doing business expected to continue increasing Uncertainty of federal funding, at least until a new act is in place 11

12. What Have We Done Federal Toll Credit program Minimize need for state cash on federal projects Budgetary Flexibility Allows changes within the framework of the budget to meet changing needs without undue delay. Cash Basis and Cash Management Shifted to a cash basis in 2003-04, managing cash to maximize project funding Broadening the public view by shifting the focus to full project cost (including support, R/W, etc) 12