February 22, 2013 What’s New With Tolling Ed Regan CDM Smith Lowell Clary Clary...

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Transcript of February 22, 2013 What’s New With Tolling Ed Regan CDM Smith Lowell Clary Clary...

  • February 22, 2013Whats New With TollingEd ReganCDM Smith

    Lowell ClaryClary Consulting

  • The Gas Tax: A System at RiskWithout major changes, the motor fuel tax will not be able generate the revenue needed to maintain and expand our nations transportation infrastructure in the future3 general fund infusions to the HTF in the last 3 years aloneAn ominous trendPolitical reluctance to raise tax ratesFederal Policy to significantly increase fuel efficiencySearch for alternative fuelsMajor inconsistency in national policyThe backbone of all transportation finance is dependent on the taxation of a commodity we seek to discourage the use of !!

  • 39.05.63.40.921.860.26Rate Per GallonPer Mile EquivalentGas Tax Purchasing Power

    Chart1

    0.0750.04

    0.2060.184

    0.030.026

    0.0180.016

    Average State Gas Tax

    Federal Gas Tax

    2010 Tax Levels

    Sheet1

    Average State Gas TaxFederal Gas Tax

    19630.0750.04

    Actual0.2060.184

    Inflation Adj.0.030.026

    MPG Adj.0.0180.016

    To resize chart data range, drag lower right corner of range.

    Chart1

    0.0092

    0.0186

    0.0026

    Average State Gas Tax

    2010 Tax Levels

    Sheet1

    Average State Gas Tax

    19630.0092

    Actual0.0186

    Inflation Adj.0.0026

    To resize chart data range, drag lower right corner of range.

  • The Gas Tax: Unsustainable Revenue SourceTax Revenue Per Mile (2010 $)1.860.930.38No gas tax increaseGas tax indexed for inflation

    Chart1

    0.01860.0186

    0.01788461540.0174910664

    0.01660714290.0158843076

    0.01550.0144991235

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    0.01367647060.0122365067

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    Series 1

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    20200.01240.0099263256

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  • Users Fees May Provide the SolutionIn the near term (2015-2025):Increased use of tolling and pricingTo supplement the gas taxEmergence of a National Toll Pricing SystemIn the long term (2030 and beyond)A shift from per gallon to per mile basis of taxation to replace the gas taxEmergence of a National Road Pricing SystemToday our Focus is on the Near Term: Re-emergence of tolling and pricing

  • Presentation OverviewRebuilding Our InterstatesPaying for the next 50 years?Cashless All-Electronic TollingNo more toll boothsExpress Toll LanesHOT new movement in tollingTolling Perspectives from Florida$1.2 billion in transportation revenueA bit on new paradigms in toll finance, P3s and public acceptabilityInnovative uses of tolling

  • The US Interstate Highway System47,000 miles of mobility, connectivity and economic vitalityMost important transportation investment in historyBut its over 50 years old!The Interstate system was originally conceived as a toll systemFranklin Roosevelt envisioned a system which would be self liquidating thru tolls and sale of property rightsAbout 3000 miles of the system had already been built (or financed) as toll roads thru the 1950sIncluding CT Turnpike

  • The 1956 Program: No TollsUltimately built without tolls; funded largely through the Federal gas taxCost $132 billion to build; $119 billion in Federal funds The Federal government conceived it, largely funded it, but owns virtually none of itThe states are left holding the bagKey question: who pays for the next 50 years, and how do we fund the rebuilding of this great national asset?

  • Lead Argument Against Tolling our Interstates:The Roads are Already Paid forCase Study: Connecticut TurnpikeOriginally a toll road ; Opened in 1958129 miles through southern ConnecticutTotal cost: $465 millionDesignated as part of I-95 soon after completionMianis River Bridge Collapse in 1983When Turnpike was 25 years oldTolls removed in 1985

  • New Haven Area Project13 miles of improvementsWideningMajor bridge replacementInterchange reconstructionTotal cost: $2.2 billionReconstruction of 10% of the Turnpike cost almost five times the original cost of the entire Turnpike

  • Theyre Already Paid For???The Connecticut examples show:Roads (and bridges) dont last forever; andIt will cost 10-20 times more to rebuild the system than it did to build it in the first placeMore proof:The states are spending over $25 billion per year on Interstate system maintenance, expansion and reconstructionThat means we are spending more every five years than the original cost of the entire 47,000 mile system!Whats worse:The Federal share of total interstate funding has declined to less than 45%Given the state of the Highway Trust Fund , the Federal share will likely continue to decline even more

  • The Next 50 YearsStateFederalOriginalSystem CostFuture Maintenance, Expansion andReconstruction Cost by Decade2011-202021-302031-402041-502051-60

    Chart1

    11500015000

    120648180972

    135135250965

    148272345968

    158167474502

    202468607403

    Series 1

    Series 2

    Billions

    Sheet1

    Series 1Series 2

    11500015000

    2011-20120648180972

    2021-30135135250965

    2031-40148272345968

    2041-50158167474502

    2051-60202468607403

  • Why Tolling May be a Good OptionInterstates are limited access and provide a premium level of serviceMost appropriate for tollingCan be added today with minimal impact on traffic thru all electronic tollingCan provide a sustainable future new source of revenue to help pay for the ongoing cost of repair and expansionAssesses cost of rebuilding to road Users, including out-of-state drivers passing through without buying fuelContribute to wear and tear and congestionWithout paying the gas taxWithout user charging the financial burden falls to local motorists, many who dont even use the road

  • States are Beginning to ActInterstate Reconstruction Pilot Program (3 slots)I-95 in VirginiaI-95 in North CarolinaI-70 in Missouri (in abeyance)Rhode Island applied for I-95 but did not get the last slotMAP-21 silent on pilot program remains in effect until 2015, but no slots currently available Growing pressure by states to reduce federal restrictionsAASHTO now strongly supports freedom to toll interstate routes

  • Where Tolls can Now be Used on Interstate HighwaysAny new capacityIncluding new interstate routes in their entiretyIncluding new lanes on existing interstate routes (as long as equivalent number of free lanes remain)HOV lanes converted to HOT lanesReconstructed bridges or tunnelsCongestion pricing on urban interstatesUnder Value Pricing program (CT already in this program)Not only permitted, but federal funds can also be used on these toll projectsNot new money, but above are now eligible for Fed. funds

  • Where we may be headedGradual continued Congressional relaxation of federal restrictionsThis may be inevitable-almost no other viable optionsBut it wont be easyProbably initially expand pilot program to 10 or more slotsPerhaps in next billEventually remove current restrictionsWill require all-electronic tolling (no toll booths)Will require national interoperabilityIf only half the interstate miles in US becomes tolled, it will increase mileage of toll roads five-foldNumber of vehicles with ETC increases from 40 million today to more than 100+ million in 10-15 years

  • Tolling in Connecticut(Circa 1978)

  • Tolling Today(no more need to stop and pay toll) Melbourne Ci