1. Wisconsin Transportation Finance and Policy Commission Freight Rail Day 2012 October 26, 2012

2. Slide 2 Commission overview  Organization and directive  Meetings  Needs and revenue scenarios  Public involvement  Draft recommendations  Policy  Finance  Contacts and resources

3. Slide 3 Organization and directive Created by the Legislature in the 2011-13 budget Directed to examine issues related to the future of transportation finance in Wisconsin, including: o Highway and other mode expansion and maintenance o Local programs (General Transportation Aids, LRIP, etc) o Transportation fund debt service o Options to achieve balance between revenues, expenditures and debt service o Impact of highway project planning on abutting property

4. Slide 4 Commission members Secretary of Transportation ( Chair and non-voting member) Appointments made by Governor (6) and legislative leadership (4) representing diverse interests: o Former elected officials o Economic development organization o Shipper o Labor o Engineering o Agriculture o Former DOT Secretary

5. Slide 5 Other Studies National o 2009 – National Surface Transportation Infrastructure Financing Commission o 2008 – National Surface Transportation Policy and Revenue Study Commission Wisconsin o 1997 – Transportation Finance Study Committee o 2006 – Road to the Future Committee Other States

6. Slide 6 Meetings Commission meets monthly, started Oct. 2011 Public listening sessions o Madison o Milwaukee o Appleton o Eau Claire Focus groups Subgroup meetings on policy issues

7. Slide 7 Broad Work Plan Flow Meetings One through Three Statutory Charge, Programs, Revenues, Challenges and other States’ Approaches

8. Slide 8 Broad Work Plan Flow Meetings One through Three Statutory Charge, Programs, Revenues, Challenges and other States’ Approaches Meetings Four through Six Needs Analysis Definition of Key Issues for Commission Work

9. Slide 9 Broad Work Plan Flow Meetings One through Three Statutory Charge, Programs, Revenues, Challenges and other States’ Approaches Meetings Four through Six Needs Analysis and Definition of Key Issues for Commission Work Meetings Seven through Nine Revenue and Policy Scenarios

10. Slide 10 Broad Work Plan Flow Meetings One through Three Statutory Charge, Programs, Revenues, Challenges and other States’ Approaches Meetings Four through Six Needs Analysis and Definition of Key Issues for Commission Work Meetings Seven through Nine Revenue and Program Scenarios Meetings Ten through Twelve Addressing Outstanding Areas for Further Commissioner Review and Drafting the Final Report

11. Debt Service Rail Program

12. Slide 12 2011-13 Revenues Total Budget: $6.50 Billion

13. Slide 13 State Revenues FY 2013 Motor Fuel Tax Revenues$979,050,00051.9% Vehicle Registration Fees611,280,00032.4% Transfers163,385,5008.7% Miscellaneous Revenues131,727,5007.0% Total Revenues$1,885,443,000100.0% Nearly $1.9 billion in gross state revenue collections

14. Funding Needs Under Four Scenarios  Scenario One – Disinvestment  Scenario Two – Preservation  Scenario Three – Capacity Management  Scenario Four – Multi-Modal Enhancements

15. State Highway Programs 10-Year Totals By Scenario Scenario One Scenario Two Scenario Four Billions $15.9 $16.9 $26.4 Scenario Three

16. Local Highway Programs 10-Year Totals By Scenario Scenario One Scenario Two Billions $5.5 $7.3 Scenario Three $7.3 Scenario Four

17. Multi-Modal Programs 10-Year Totals By Scenario Scenario One Scenario Two Billions $3.1 $4.1 Scenario Three Scenario Four $5.9 $4.1

18. Comparison of Scenarios Total 10-Year Needs By Scenario Scenario One Billions $27.0 $30.8 Scenario Two Scenario Four $40.3 Scenario Three $42.1 +$1.0 +$9.5 +$1.8 +$1.0 +$1.8

19. Slide 19 State Revenues FY 04 - FY 23

20. Slide 20 Revenue vs. Needs: Least Revenue - $23.8 Billion $3.3 billion $7.0 billion $16.5 billion $18.4 billion 10.3 ¢ 21.9 ¢ 51.5 ¢ 57.5 ¢

22. WI Gas Tax Price History

23. Slide 23 Gas tax as Percent of Price

24. Slide 24 Freight Rail Mode 1970 – Freight Rail Preservation Program Currently 600 miles of stated owned track Cost share o Purchase the underlying real estate o 80 percent of the cost of track and other improvements, with the rail transit commission(s) providing the remaining 20 percent. o Operating agreement with a freight railroad for service on the line

25. Slide 25 Freight Rail Mode Issues: Demands on the Freight Rail Programs Exceed Available Funding Railroad bridges Local budget constraints Supporting Commerce

26. Slide 26 Freight Rail Mode Commission deliberation Current program o 98% funds for rehabilitation o 11% funds for acquisition (10 year average) Current revenue generation o Ad valorem - $28.1 million collected annually o Project match – 20 percent o Maintenance responsibilities o Railroad generated improvements o Commission fees

27. Slide 27 Freight Rail Mode GOAL: Entire state-owned system up to operating speeds of 25 mph. Annual Budget (in 2012 dollars) Percent of System Meeting the Goal after 10 Years Years to reach 100% of Goal $15,000,00070%25 $30,000,00086%12 $50,000,000100%10

28. Slide 28 Freight Rail Mode Commission draft recommendations: Funding at $15M annually Create stakeholder group o Deliberate priorities between rehabilitation and acquisition Create a car fee for use of state lines

29. Slide 29 Draft Recommendations - Policy Local Program o Increases in program go to LRIP o Revisit eligible reimbursable costs o Revisit per-mile reimbursement o Replace federal funds with state funds in some programs o Eliminate Management Consultant management of program Project Delivery o Allow design-build o Allow Construction Manager / General Contractor (CMGC)

30. Slide 30 Draft Recommendations - Policy Majors program o Require life cycle cost analysis Support constitutional amendment o Firewalls transportation revenue Transit o Keep program in the transportation fund o Create tier flexibility Highway maintenance o Keep county maintenance model o Evaluate regionalization maintenance functions

31. Slide 31 Draft Recommendations - Policy Bicycle program o Create a state-funded bicycle commuter program Support constitutional amendment o Firewalls transportation revenue Transit o Keep program in the transportation fund o Create tier flexibility o Transit work group proposal on mobility managers Highway Maintenance o Keep county maintenance model o Evaluate regionalization maintenance functions

32. Slide 32 Draft Recommendations - Revenue Fuel tax increase Registration fee increase o Flat fee o Mileage based fee Eliminate sales tax exemption on car sales Regional transportation authorities Create limitations on use of bonding

33. Slide 33 Timeline Commission’s report to the Legislature is due no later than March 1, 2013 Work plan direction is to develop a report and recommendations by the end of 2012

34. Slide 34 Contacts and resources Visit the web at www.dot.wisconsin.govwww.dot.wisconsin.gov o Look for the Commission logo and click on it to access pages Beth Nachreiner, TFP Commission Staff WisDOT Office of Policy, Budget and Finance P.O. Box 7910 Madison, WI 53707-7910 (608) 264-9523 dottfpcommission@dot.wi.gov dottfpcommission@dot.wi.gov Martin Hanson – HansonM@AyresAssociates.comHansonM@AyresAssociates.com