State & Federal Transportation Funding Trends 2017 Ohio Municipal League September 20, 2017

Long-term solvency of the Highway Trust Fund CSG Statement of Principles on the Federal-State-Local Transportation Partnership (2016) Long-term solvency of the Highway Trust Fund Support for state experimentation with funding mechanisms Opposition to efforts to eliminate federal tax exemption on municipal bonds

Gas Taxes in Ohio and Surrounding States Ohio: 28 cents Kentucky: 26 cents (incl. 24.6-cent excise tax) Indiana: 41.8 cents (incl. 28-cent excise tax) Michigan: 39.94 cents (incl. 26.3-cent excise tax) Pennsylvania: 59.3 cents West Virginia: 35.7 cents (incl. 20.5-cent excise tax)

Ohio’s Infrastructure Report Card 17 percent of public roads in poor condition $475 in annual vehicle repair costs 1,942 bridges (6.9 percent) structurally deficient

State Transportation Funding Trends 2017 Eight states raised gas taxes Others approved one-time transportation funding 10 states approved new fees for electric and/or hybrid vehicles Total funding approved: $68.1 Billion Since 2012, 31 states have enacted a funding increase 20 states have variable gas tax rates

California (2017) $52 billion plan to repair roads and bridges Increases excise taxes on gasoline by 12 cents and on diesel by 20 cents Adjusted for inflation after 2020 Increase in diesel fuel sales tax New road improvement fee New $100 zero emission vehicle fee

Colorado (2017) $1.8 billion bond measure for road work over next decade At least 25 percent required to be spent on projects in counties with fewer than 50,000 residents

Idaho (2017) $52 million from the budget surplus for emergency road funding $300 million in GARVEE bonding (borrowed against future federal highway allocations) Extended surplus eliminator for another 2 years Created new Transportation Expansion and Congestion Mitigation Fund

Indiana (2017) 10 cent gas tax increase in two steps of 5 cents each 6 cent diesel fuel tax increase Indexing starting in 2019 (up to 1 cent annually) Increases vehicle registration fees (50% on decal fee for alternative fuel vehicles) $150 fee on electric vehicles $75 fee for alternative fuel vehicles

Indiana (2017) Increases fee on sale of new vehicle tires 10 cent increase in aviation fuel tax Allows INDOT to seek federal waiver on interstate tolling INDOT tolling feasibility study $328 million for the state highway fund in year one, $43 million for local roads, $1.7 million for airports $552 million state, $85 million local by year two

Montana (2017) Increases gas tax by 4.5 cents a gallon, then 1.5 Increases diesel tax by 1.5 cents, then 0.5 Increase in vehicle registration fee New tax on cars, recreational vehicles worth more than $150K $37 million in year one, $49 million by 2023

New Hampshire (2017) Transferred $38 million in surplus funds from the revenue stabilization reserve account to the highway and bridge betterment account $6.8 million to New Hampshire DOT for critical bridge work Remainder to cities and towns

Oregon (2017) Four cent gas tax increase in 2018 Gradually adds another six cents Increase in vehicle fees New tax on new vehicle sales Payroll tax for transit Bike tax

South Carolina (2017) Veto override Increases gas tax 2 cents a year for six years Increases license and registration fees Increases vehicle sales taxes

South Carolina (2017) New one-time fee for vehicles purchased out-of-state New fees on electric and hydrogen-powered cars New hybrid fees New fee on large commercial vehicles $630 million a year for road repairs

Tennessee (2017) Increases gas tax by 6 cents over 3 years Increases diesel tax by 10 cents over 3 years Increases vehicle registration and other fees $350 million annually for state’s dedicated highway fund Also cuts taxes

Utah (2017) Allows $1 billion to be bonded over the next 4 years to speed up high priority transportation projects across the state Modifies the variable-rate gas tax formula enacted in 2015 to allow for more robust revenue growth. It will result in a roughly 0.6-cent-per-gallon increase in 2019 and a 1.2-cent increase in 2020.

West Virginia (2017) Increases variable minimum wholesale gas tax Vehicle sales tax increase Increases tolls and tolling authority Voter referendum on $1.6 billion in bonds $140 million a year more for roads

Wisconsin (2017) Borrowed $400 million for roads Raised fees on hybrid and electric cars No long-term funding solution to keep construction projects on track

Wyoming (2017) Increased vehicle registration fees Increased commercial vehicle weight fees Increased DMV license fees

States Looking to the Future Connecticut Delaware Kentucky Missouri Utah

State Transportation Funding http://knowledgecenter.csg.org/kc/content/state-transportation-funding-trends-2017

President Trump’s Plan to Rebuild America’s Infrastructure Make targeted federal investments Encourage self-help Align infrastructure investment with entities best suited to provide sustained and efficient investment Leverage the private sector

“This administration wants to retain the primacy of state and local spending and use federal funding as leverage to increase the total amount of funding available for infrastructure.” Elaine Chao, U.S. Secretary of Transportation Infrastructure Week Kick-Off May 15, 2017

“States and localities that have secured some funding or financing of their own for infrastructure projects will be given higher priority access to new federal funds.” Elaine Chao, U.S. Secretary of Transportation Infrastructure Week Kick-Off May 15, 2017

Infrastructure Week Kick-Off “The days of a state or a city showing up here with an empty hat and thinking you’re going to have a single dollar in that hat when you leave are over.” Eric Garcetti, Mayor of Los Angeles Infrastructure Week Kick-Off May 15, 2017

The Wall Street Journal September 1, 2017

State Federal Share of Highway Spending (FY ‘15) South Dakota 49.6% Indiana 46.0% Nebraska 40.1% Michigan 35.2% United States 34.4% Ohio 33.4% Wisconsin 32.2% Kansas 32.1% Illinois 25.3% North Dakota 23.7% Iowa 23.6% Minnesota 21.2% Source: http://www.governing.com/topics/finance/gov-state-budgets-federal-funding-2015-2018-trump.html

Mileage-Based User Fee Pilots & Demonstrations Oregon Washington California I-95 Corridor Coalition (Delaware, Maryland Pennsylvania) Hawaii Missouri

House Calendar, 115th Congress, First Session

Prospects for Trump Infrastructure Plan in 2017 Speaker Ryan (8/21): “I believe it’s going to be far easier for us to do tax reform than it was for health care reform.” Trump’s deal with Democrats ruptured trust between Trump and GOP Hill leaders making the tax overhaul less likely Trump’s deal with Democrats makes an infrastructure package more likely. The tax overhaul has to come before the infrastructure plan.

Prospects for Trump Infrastructure Plan in 2017 Infrastructure plan could become part of tax overhaul. Details of infrastructure plan not coming until after tax code overhaul gets rolling. Some Democrats like the idea of bundling the tax overhaul with infrastructure spending. That could make the lift heavier for Republicans on the tax overhaul. If tax reform becomes tax cuts for the wealthy, it risks alienating Democrats. Conservatives don’t want to include spending as part of a tax overhaul.

Sean Slone: sslone@csg.org On Twitter: @CSGTransport Questions? Sean Slone: sslone@csg.org On Twitter: @CSGTransport