Commonwealth Public Transportation Funding Steve Pittard Chief Financial Officer June 16, 2016

Transit Revenues - Primary Sources Transportation Trust Fund (TTF) – 1986 Session Recordation Taxes – 2007 & 2015 Session Tax on Insurance Premiums – 2007 Session Retail Sales and Use Tax (SUT) – 2013 Session Sales Tax on Fuel (Dedicated) – 2015 Session Various Federal Transit Administration (FTA) programs

1986 Session TTF Major Revenue Sources Motor vehicle fuel tax Motor vehicle sales and use tax Motor vehicle license fees Retail sales and use tax

1986 Session TTF FY $149.8 M Modal split percentage last revised in 1999 –4.2% Port; 2.4% Aviation; 78.7% to VDOT 14.7% to the Mass Transit Trust Fund (MTTF) - § A. Transit share allocated as follows: –Minimum of 72% to transit operations –Up to 3% for transit special programs –25% for transit capital projects

Recordation Taxes FY $45.4 M Tax on recording real estate transactions In 2007, $0.02 of the state recordation tax to the MTTF [$0.25 per $100 of value is the total recordation tax]; dedicated to transit operating assistance In 2015 (HB1887), additional $0.01 redirected from HMOF to transit capital beginning in FY 2017 §

Transportation Capital Projects Revenue (CPR) Bonds FY $110.0 M Total bond authorization $3.0 billion (§ ) 1/3 of gross insurance premiums tax (2.25%) deposited into the Priority Transportation Fund to provide a revenue stream for the CPR bonds - § A minimum of 20% of the bond proceeds for transit capital consistent with subdivision A 4 c of § the Mass Transit Capital Fund DRPT/CTB elected to receive this funding over ten years - $60 million per year

Transportation CPR Bonds Continued Other uses of the bonds include: match to federal funds, revenue sharing funding, statewide or regional projects –$50 million a year for 10 years to match WMATA PRIIA federal funds –Dulles Metrorail also received bond funds from regional projects category Over 45% of the CPR bonds have been allocated to transit initiatives –$600 M transit minimum –$500 M State of Good Repair for WMATA –$225 M to the Dulles Metrorail Project –$41 M to the fixed guideway initiatives

Motor Vehicle Fuel Tax FY $33.0 M 3.11% of the revenues dedicated to transit capital ($27.8 M) 0.35% of the revenues dedicated to transit operations ($3.1 M) 0.24% of the revenues dedicated to transit special programs ($2.1 M) § (2015 session)

Retail Sales and Use Tax FY $77.3 M 0.075% of the general retail sales and use tax to the MTTF Minimum of 72% to transit operations Up to 3% for transit special programs 25% for transit capital projects § (2013 Session)

FTA Revenue Sources FY $68.1 M Approximately $26.9 million a year of flexible STP funds (CTB discretion) Approximately $41.2 million a year from the various FTA programs –FTA 5311 program for rural providers and the FTA 5307 Governor’s Apportionment program for small urban providers

Marketplace Fairness Act Impacts HB Session dedicated a portion of the estimated revenues from internet sales taxes to TTF –Transit share (14.7%) for FY 2017 was estimated to be $26M –Required legislation at federal level –Increase in sales tax on motor fuels if not passed, but all contingent revenues dedicated to highways HB Session redirected a portion of the increase in the motor fuels tax to transit as well as recordation taxes previously allocated to the TTF If Marketplace Fairness Act passes, HB1887 revenues for transit are reversed –Net result is an approximate $22M decrease in transit revenues

Commonwealth Transit Revenues Six Year Forecast Bond funding ends beginning in 2019 Retail SUT and the 1986 transportation trust fund revenues show some growth All other sources are relatively flat

FY 2017 Transit Revenues by Program Loss of bond funds will result in a 44% decrease in transit capital funding

Transit Capital Allocation Process Capital program currently uses a tiered prioritization process –Tier 1 at 68% State Share Rolling stock for replacement or expansion and related items –Tier 2 at 34% State Share Infrastructure and facilities –Tier 3 at 17% State Share Support vehicles, shop equipment, spare parts, etc

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