1. Transportation Funding 2006 Now or Never? Committee For Dulles January 19, 2006 Robert O. Chase, President Northern Virginia Transportation Alliance NVTA – Making a Difference

2. Virginia’s Transportation Funding Crisis Since Last Transportation Tax Increase (1986) Demand Up; Supply Down

3. Third Largest Highway System Virginia has the nation’s third largest state-operated highway (58,000 miles) and bridge (12,000) network. Miles Interstate5,356Interstate5,356 Primary21,385Primary21,385 Secondary23,558Secondary23,558 Urban 7,762Urban 7,762 Total58,061Total58,061 Virginia’s Transportation Funding Crisis

4. 9 th Lowest State Gas Tax Virginia’s Gas Tax ranks 41 st of 50 states Virginia’s Gas Tax ranks 41 st of 50 states Last raised January 1, 1987 Last raised January 1, 1987 17.5-cent gas tax (1987 dollars) = 10-cents (2006 dollars) 17.5-cent gas tax (1987 dollars) = 10-cents (2006 dollars) Higher fuel efficiency means more miles per tank Higher fuel efficiency means more miles per tank Virginia’s Transportation Funding Crisis

5. Unfunded Capital/Construction Needs Statewide: $40 to $100 billion Statewide: $40 to $100 billion Northern Virginia: $8 to $15 billion Northern Virginia: $8 to $15 billion Virginia’s Transportation Funding Crisis

6. Highway Maintenance and Operations Unfunded maintenance = $2 billion Unfunded maintenance = $2 billion Maintenance consumes 50% of transportation budget. Maintenance consumes 50% of transportation budget. Only 25% of transportation funds go to construction. Only 25% of transportation funds go to construction. Virginia’s Transportation Funding Crisis

7. Remaining state funds insufficient to fully match federal funds All available state revenues are transferred to the HMOF Virginia’s Transportation Funding Crisis State Construction Funds Required for Maintenance In Millions $1400 $1200 $1000 $800 $600 $400 $200 0 HMOF Transfer (crossover) in excess of available state revenue HMOF Transfer (crossover) State funds available for construction 2006 20252010 2015 2020 First year federal funds are used for maintenance

8. Federal Funding Federal funds make up 60% of the construction budget. Federal funds make up 60% of the construction budget. More strings. More expensive. More strings. More expensive. US Chamber estimates Feds may not be able to fund 2009 commitments. US Chamber estimates Feds may not be able to fund 2009 commitments. Virginia’s Transportation Funding Crisis

9. Virginia Department of Transportation Performance 74% maintenance outsourced 74% maintenance outsourced 87% construction outsourced 87% construction outsourced 1100 fewer employees 1100 fewer employees Nearly 80% on time Nearly 80% on time Nearly 90% on budget Nearly 90% on budget Virginia’s Transportation Funding Crisis

10. Funding Solutions 2005 General Assembly Package 2005 General Assembly Package FY ’06 - FY ’08 Warner Budget PackageFY ’06 - FY ’08 Warner Budget Package Governor Kaine’s InitiativesGovernor Kaine’s Initiatives House of DelegatesHouse of Delegates State SenateState Senate Funding Solutions

11. 1986 Package (Millions) Gas tax (2.5-cents per gallon) $125 Gas tax (2.5-cents per gallon) $125 General sales tax (.5%) $418 General sales tax (.5%) $418 Motor vehicle sales tax (1%) $180 Motor vehicle sales tax (1%) $180 Driver’s license fee ($3.00) $6 Driver’s license fee ($3.00) $6 Net new dollars per year $729 Net new dollars per year $729 2005 Package (Millions) Federal/state transportation funds (one-time) $477.3 Federal/state transportation funds (one-time) $477.3 General Fund (GF) surplus (one-time) $240.0 General Fund (GF) surplus (one-time) $240.0 GF insurance premiums (ongoing) $107.6 GF insurance premiums (ongoing) $107.6 GF vehicle rental taxes (ongoing) $23.2 GF vehicle rental taxes (ongoing) $23.2 Total $848.1 Total $848.1 –Less one-time funds -$717.3 –Net new dollars per year $130.8 1986 vs. 2005 Transportation Funding Comparison

12. Governor Warner’s $625 Million FY06-FY08 Biennium Budget $286 million to meet commitments of Virginia Transportation Act of 2000 $286 million to meet commitments of Virginia Transportation Act of 2000 $229 million for debt service $229 million for debt service $57 million for public transit capital fund $57 million for public transit capital fund $339 million in one-time General Fund support $339 million in one-time General Fund support $142 million for state match for 154 Federal earmarks $142 million for state match for 154 Federal earmarks Northern Virginia Projects include:Northern Virginia Projects include: I-66/Gainesville Interchange ($8.4 m) I-66/Gainesville Interchange ($8.4 m) I-66 Westbound inside Beltway ($6.9 m) I-66 Westbound inside Beltway ($6.9 m) I-95 Fourth Lane – Route 123 to FFX Pkwy ($3.2 m) I-95 Fourth Lane – Route 123 to FFX Pkwy ($3.2 m) Route 50/Gilberts Corner “traffic calming” ($2 m) Route 50/Gilberts Corner “traffic calming” ($2 m) Battlefield Parkway Extension ($400,000) Battlefield Parkway Extension ($400,000) Alexandria Transit ($2.1m) Alexandria Transit ($2.1m) Arlington Transit ($1.76 m) Arlington Transit ($1.76 m) $143 million for other major mobility federal projects$143 million for other major mobility federal projects Northern Virginia Projects include Northern Virginia Projects include I-66 WB Inside Beltway ($16 m)I-66 WB Inside Beltway ($16 m) Metro Rail Car Storage ($20 m)Metro Rail Car Storage ($20 m) Virginia Railway Express Rail Cars ($15 m)Virginia Railway Express Rail Cars ($15 m) $54 million integrated Port initiative $54 million integrated Port initiative Funding Solutions

13. Governor Kaine’s Funding Plan – To Date TTF Constitutional Amendment TTF Constitutional Amendment Local Matching Partnership Fund Local Matching Partnership Fund General Funds General Funds Retain portion of insurance premium tax revenues Retain portion of insurance premium tax revenues Surplus only; one time uses Surplus only; one time uses Long-term transportation investment plan – Jan. 20 th Long-term transportation investment plan – Jan. 20 th - Bonds(?) – Abuser Fees(?) – Auto Registration(?) – Vehicle Sales(?) Funding Solutions

14. Senate Initiatives – To Date Trust Fund Constitutional Amendment Trust Fund Constitutional Amendment Higher truck fees Higher truck fees Insurance premium fund Insurance premium fund Increase gas sales tax for public transit Increase gas sales tax for public transit 1/4 % regional sales tax for Metro 1/4 % regional sales tax for Metro Divert more of sales tax to transportation Divert more of sales tax to transportation Virginia’s Transportation Future Fund (Potts) Virginia’s Transportation Future Fund (Potts) Major funding proposal $1-$2 billion per year - Sales Tax(?) – Income Tax(?) – Sales Tax on Gas(?) -Auto Sales Tax(?) – Auto Registration Fee(?) – Tolls(?) Major funding proposal $1-$2 billion per year - Sales Tax(?) – Income Tax(?) – Sales Tax on Gas(?) -Auto Sales Tax(?) – Auto Registration Fee(?) – Tolls(?) Funding Solutions

15. House of Delegates Initiatives – To Date Trust Fund Constitutional Amendment Trust Fund Constitutional Amendment Abuser Fees Abuser Fees Higher Truck Fees Higher Truck Fees Insurance Premiums Funds Insurance Premiums Funds Divert more of sales tax to transportation Divert more of sales tax to transportation Rust Regional Package Rust Regional Package No Higher Taxes No Higher Taxes “More multi-faceted structural/organizational/allocation reforms, regional autonomy, PPTAs, accountability, citizen participation and better long-term planning.” “More multi-faceted structural/organizational/allocation reforms, regional autonomy, PPTAs, accountability, citizen participation and better long-term planning.” Funding Solutions

16. Estimated Annual Shortfall $2 - $5 billion $2 - $5 billion Price of delay/negligence Price of delay/negligence Big shortfall requires big, new revenue stream(s) Big shortfall requires big, new revenue stream(s) Funding Solutions

17. Statewide Funding Options Motor Vehicle Titling Tax (current rate: 3%) 1% increase = $202.8 million Vehicle Registration Fee (current fee: $29.50) $10 increase = $70.1 million Motor Fuels Tax (current rate: $.175 per gallon) $.01 increase = $50 million Diesel Fuel Excise Tax (current rate: $.16 per gallon) $.015 increase = $18 million General Sales Tax on Motor Fuels (current tax: 0) 5% tax = $334 million (2004 data) General Sales Tax on Auto Repairs (current tax: 0) 5% tax = $58.3 million Tire Excise Tax (current tax: $1.00 per tire) $2.00 increase/tire = $10.6 million Vehicle Rental Tax (current tax: 10%) 1% increase = $7.7 million Lodging Fee (current tax: 0%) $1/room/night = $31 million

18. #8 Regional Options Northern Virginia Regional Income Tax ½% = $202 million (2002 data) Regional Sales Tax 0.5% = $148.9 million (FY 2005 data) Regional Income Tax ½ % = $57.4 million (2002 data) Regional Sales Tax 0.5% = $167.7 million (FY 2005 data) Hampton Roads

19. Doing Nothing/Further Delay Most Expensive Solution Higher construction costs Higher construction costs Higher right of way costs Higher right of way costs Jobs/businesses re-locate elsewhere Jobs/businesses re-locate elsewhere Airport access/economic potential curtailed Airport access/economic potential curtailed Our children/best and brightest re-locate elsewhere Our children/best and brightest re-locate elsewhere Funding Solutions

20. Dulles Airport Success Story Demand YearFlightsPassengers 1986289,16710.9 Million 2005469,00022.9 Million Capital Investment Response =$5.4 Billion Terminal/concourse expansion Terminal/concourse expansion Taxiways Taxiways New runway New runway Parking garages Parking garages Cargo expansion Cargo expansion Automated train system Automated train system Etc. Etc. Funding Solutions

21. 2006 Is THE Year 2007- Election Year2007- Election Year 2008 - Unlikely2008 - Unlikely 2009 - Election Year2009 - Election Year 2010 - May not matter. Backlog even greater. Best solutions lost.2010 - May not matter. Backlog even greater. Best solutions lost. 2006 - Our Best and Last Shot “We must do something significant, and we must do it this year.” Governor Tim Kaine George Mason High School January 3, 2006

22. Progress Just Doesn’t “Happen” It’s our future It’s our future It’s our economic prosperity It’s our economic prosperity It’s our community It’s our community It’s up to us It’s up to us 2006 Is THE Year

23. Be part of the solution - www.nvta.org

24. Serious Problems Demand Serious Solutions This Year 2006 Is THE Year