O hio C ontractors A ssociation Jana Cassidy Administrator, Budget & Forecasting October 2015

Overview ODOT Funding Sources General Revenue Trends ODOT Budget Overview State Motor Fuel Tax Trends Bonds Federal Revenue – Highway Trust Fund 2

ODOT Funding Sources

All Revenue Sources 4 State Highway Revenue43% Federal Highway Revenue – FHWA43% Bonds – State and Federal 9% Federal Transit / Federal Aviation 1% Local Government Deposits 3% State General Revenue 1% Excludes SIB; SSR and Carryforwards

Revenue Forecasts & State Motor Fuel Trends State 1% Growth % Growth Federal Flat at FY 2015 MAP-21 Levels2016 –

State Revenue Sources FY 16 - Estimates 6 FY16 estimates State Motor Fuel Tax$1,163 m 90.5% Commercial Truck Registrations (IRP) 0 0% Fuel Use Tax (IFTA) % Petroleum Activity Tax % Interest Income and Misc % $1,287 m %

General Revenue Trends

General Revenue Funding Trends 8

ODOT Budget Overview

FY 16 – Primary Funding Sources $2.96 Billion Budget 10

FY15 - Primary Uses $3.34 Billion Budget 11

Transportation Revenue and Program Summary 12 Preservation Program - Locals includes: MPO, CEAO and other funding provided to local governments Preservation Program - ODOT includes: Pavement, Bridges, Safety, and Statewide ODOT / Federal Earmark Programs State AssumptionsFederal Assumptions Tax State Motor Fuel Tax1% Growth FY16 & FY17 Federal Revenue - Flat FY Rates Flat FY18 - FY25

State Motor Fuel Tax Trends

FY16 State Motor Fuel Tax Distribution 14

Ohio Motor Fuel Price Components 15

Net Taxed Gallons 16 Percent changes compared to 2007 levels

Ohio VMT vs Monthly Gasoline Price 17

Bonds

Bond Background ODOT can issue: – State Bonds – Backed by State Motor Fuel Tax – Federal Bonds – Backed by 80% Federal Motor Fuel Tax & 20% State Motor Fuel Terms  State Bonds: 10 – 15 years  Federal Bonds: 10 – 12 years Average Interest Rate the past few years: 2.0% to 2.5% Bonds issued only for Construction phase ODOT Bond Policies: – Revenue Dedicated to paying debt No more than 20% of our State Revenue should be dedicated to State & Federal Debt Service No more then 20% of our Federal Revenue should be dedicated to Federal Debt Service ODOT likes to stay within 15% ODOT benefitting from bonds backed by Turnpike Toll Revenue - $930 million initially.

Federal Revenue Highway Trust Fund

Federal Highway Fuel Tax Rate 1¢ = $61 M - (Contributions to Fund) $61 M x 93% = $57 M - (Est Returned to Ohio) Last Federal Gas Tax Increase was 4.3 ¢ in 1993

U.S. Consumption Trend 1960 Change in % share of U.S. Motor Fuel Consumption since

U.S. Consumption Trend 1970 Change in % share of U.S. Motor Fuel Consumption since

U.S. Consumption Trend 1980 Change in % share of U.S. Motor Fuel Consumption since

U.S. Consumption Trend 1990 Change in % share of U.S. Motor Fuel Consumption since

U.S. Consumption Trend 2000 Change in % share of U.S. Motor Fuel Consumption since

U.S. Consumption Trend 2010 Change in % share of U.S. Motor Fuel Consumption since

Consumption Trends Ohio Ohio has lost 33% of share since 1950 Largest Loss Kansas has lost 47% of share since 1950 Largest Gain Nevada has gained 294% of share since

Federal Highway Trust Fund General Fund Transfers since 2008 * Includes both Highway and Mass Transit accounts of the HTF. After MAP-21 sequestrations Note: CBO has indicated that keeping pace with both the Highway Account and Mass Transit Account spending, would require a $0.10 to $0.15 increase in Federal Motor Fuel Tax. 29

Federal Highway Trust Fund SHORT-TERM EXTENSIONS OF THE 2005 SAFETEA-LU LAW SAFETEA-LU expired 9/30/09 10/1/2009 – 7/6/2012 (10 different short-term extensions) 2 years, 10 months MAP-21 in effect from 7/6/2012 to 9/30/ years, 3 months SHORT-TERM EXTENSIONS OF THE 2012 MAP-21 LAW 10/1/ /31/20158 months 6/1/2015 – 7/31/ months 8/1/2015 – 10/29/20153 months 30

Highway Trust Fund Projected Balances 31

Comparison of FHWA Revenue to State Revenue 32

Questions ?