prepared for Transportation Planning Board presented by Arlee Reno Cambridge Systematics, Inc. in cooperation with K.T. Analytics November 16, 2005 Status Report on the Financial Analysis for the 2006 CLRP TPB Hand-Out Item 9

2 Purpose Of Financial Analysis Project “reasonably available” transportation revenues through 2030 from federal, state, local and private sources Estimate annual costs to operate and maintain the existing transportation system Estimate capital and operating costs to build, operate and maintain projects in the current CLRP Identify funding available for additional projects

3 Changes Since 2003 Financial Analysis Toll revenues a key funding source for major projects in the plan (Dulles Rail, ICC, Beltway HOT lanes) Federal revenues for region increased under SAFETEA-LU, but not dramatically Metro Matters funding 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 and moving forward No other significant changes in current or new revenue sources

4 Progress To Date on 2006 Financial Analysis  Revenue and expenditure forecasts by agencies are expected to be synthesized for TPB Technical Committee review in January 2006  Primary inputs have not changed significantly since the 2003 analysis  Major new expansion projects for 2006 CLRP will require project-specific funding plans with identified revenues

5 National Picture Financial analyses for the nation, states, and other metropolitan areas show similar funding challenges to those faced by this region In addition, global market factors are driving rapid increases in highway and transit construction costs

6 U.S. Chamber of Commerce Study: Future Highway and Public Transportation Financing (Fall 2005) Current transportation revenues at all levels of government – Federal, state, and local – are not sufficient to “maintain” or “improve” the nation’s highway and transit systems Average annual gap to “maintain” highways and transit systems through 2015 is $50 billion Average annual gap to “improve” highways and transit systems through 2015 is $107 billion

7 U.S. Chamber Study Federal Highway Trust Fund Faces Deficit The Federal Highway Trust Fund Highway Account could have a negative balance as early as 2008, well before the end of the SAFETEA-LU authorization period Funding gap due in part to gas tax revenues declining as cars are more fuel efficient and/or rely on alternative fuels

8 U.S. Chamber Study Short-Term Solutions The Federal government needs to take action soon to narrow the revenue gap and prevent the Highway Trust Fund from going into negative balance Indexing the Federal motor fuel taxes would have the most immediate and substantial impact Motor fuel taxes and other existing fees must be increased at all levels of government Other revenue measures, innovative financing tools, and private participation would have more modest but important additional impacts

9 U.S. Chamber Study Long-Term Solutions Are Also Needed A two-tier, mileage-based revenue system is needed to address long-term needs Tier 1 - a state-based VMT (vehicle-miles-of-travel) fee; charged for all miles driven in a state, and would replace the current motor fuel tax Tier 2 - a regional or local-option VMT fee; charged for miles driven on congested roadways, especially during peak periods, to manage congestion States should lead the initiative; VMT systems are already under study and development at state level (Oregon) Federal government should provide strong support