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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, Highway Needs Through 2030
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
Jack Basso Chief Operating Officer and Business Development Director American Association of State Highway and Transportation Officials(AASHTO)
Surface Transportation Funding
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
Objectives
• To outline the needs for the combined levels of government in surface transportation
• To describe the looming funding crisis with the Highway Trust Fund
• To identify some possible actions to better address the needs
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
Highway Needs Through 2030
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
Transit Needs Through 2030
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
Transit Needs Through 2030
"Federal Share" of Highway Investment (assumed to be 45% of total needs)Current Law HTF/HA Revenues extended through 2030
Note: Annual Revenue / VMT growth assumed to slow from 2.2% in 2007 to 0.7% by 2030.Note: Nominal Federal gasoline tax rate assumed to remain at 18.4 cents through 2030.
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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
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"Improve" Target "Maintain" Target HTF/HA Baseline Revenues
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007"Federal Share" of Highway Investment (assumed to be 45% of total needs)
Revenue Enhancement: 3-cent fuels tax increase ("solvency fix") in 2009
Note: Annual Revenue / VMT growth assumed to slow from 2.2% in 2007 to 0.7% by 2030.Note: Nominal Federal gasoline tax rate increases from 18.4 cents to 21.4 cents in 2009 and remains at 21.4 cents through 2030.Note: Aggregate additional HTF/HA revenues through 2030 = $120 billion.
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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
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$ B
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"Improve" Target "Maintain" Target Baseline Revenues Enhanced Revenues
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007"Federal Share" of Highway Investment (assumed to be 45% of total needs)
Revenue Enhancement: 10-cent fuels tax increase phased in from 2009-2015
Note: Annual Revenue / VMT growth assumed to slow from 2.2% in 2007 to 0.7% by 2030.Note: Nominal Federal gasoline tax rate increases from 18.4 cents to 21.4 cents in 2009 to 28.4 cents by 2015 and remains at 28.4 cents through 2030.Note: Aggregate additional HTF/HA revenues through 2030 = $362 billion.
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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
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$ B
illio
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"Improve" Target "Maintain" Target Baseline Revenues Enhanced Revenues
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007"Federal Share" of Highway Investment (assumed to be 45% of total needs)
Revenue Enhancement: 10-cent fuels tax increase phased in from 2009-2015 plus indexing
Note: Annual Revenue / VMT growth assumed to slow from 2.2% in 2007 to 0.7% by 2030.Note: Nominal Federal gasoline tax rate increases from 18.4 cents to 44.0 cents by 2030.Note: Aggregate additional HTF/HA revenues through 2030 = $651 billion.
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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Year
$ B
illio
ns
"Improve" Target "Maintain" Target Baseline Revenues Enhanced Revenues
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
Revenue Picture
• Highway Trust Fund revenues are NOT decliningo 1995-2005: $22 billion to $38 billiono 2005-2015:$38 billion to $47 billion
• Fuel tax is still viable• But purchasing power eroding• Spending has exceeded income
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
Highway Trust Fund Options toIncrease Revenues
Highway Program Level Made Possible by 2021
• 10 Cent Rate Increase $75 billion
• 10 Cent Rate Increase, Indexed to CPI$82 billion
• Five Percent Sales Tax on Gas $85 billion(if fuel prices increase 4% annually)
• 14.2 Percent Sales Tax on Gas $95 billionin lieu of 28.4 Cent Gas Tax(if fuel prices increase 4% annually)
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
The Looming Crisis
36.3 36.9
42.0 41.843.4
27.4
$0
$5
$10
$15
$20
$25
$30
$35
$40
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2005 2006 2007 2008 2009
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ions
$18 billion cut in Fed Hwy Program if Congress takes no corrective action
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
Impact of InflationPercentage Reduction in Purchasing Power 1998-2015
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57.7
47.8
29.9
17.9
8.4
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1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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Perc
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ge
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
Restoring Purchasing Power
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
A Vision from the Financing Team
What do we want America to have for transportation? We concluded that…
America wants a unified national transportation system that fosters international competitiveness and energy independence, is safe and secure, provides efficient domestic mobility, and enhances the environment.
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
Revenue Picture• What is being done to address the
problems?o SAFETEA-LU created a National
Commissiono AASHTO has developed a series of
reports to address issues• Needs• Recommendations• Funding• Freight• Vision (to come)
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Presentation to the AASHTO Standing Committee on Finance and Administration July 17, 2007
Questions?
Peter “Jack” BassoChief Operating Officer
American Association of State Highway and Transportation Officials444 North Capitol Street N.W., Suite 249
Washington, DC 20001Phone: (202) 624-5800
Fax: (202) 624-5806Email: [email protected]
