1
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
Opportunities
in
Freight
Infrastructure
Financing
Joung
H.
Lee
Associate
Director
for
Finance
and
Business
Development
American
Association
of
State
Highway
and
Transportation
Officials
Deputy
Director
Session
Objectives
•
To
provide
the
national
context
on
transportation
funding
and
financing
•
To
discuss
the
policy
and
finance
recommendations
for
freight
from
two
Congressionally
‐
authorized
national
commissions
and
the
House
Transportation
Committee
•
To
provide
AASHTO’s
freight
funding
and
3
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
Transportation
Spending
Cuts
in
19
States
in
FY
2010
•
Arizona
•
California
•
Delaware
•
Georgia
•
Idaho
•
Illinois
•
Louisiana
•
Massachusetts
•
Minnesota
•
North
Carolina
•
New
Jersey
•
New
York
•
South
Carolina
•
Utah
•
Virginia
•
West
Virginia
5
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
American
Recovery
and
Reinvestment
Act
(ARRA)
of
2009
Overall
Features
•
$48.12
billion
to
USDOT
•
100
percent
Federal
share
•
Maintenance
of
effort
required
•
Periodic
reporting
of
economic
impact
of
Status
of
ARRA
Implementation
USDOT
received
$56.6
billion
in
project
funding
request
for
$1.5
billion
TIGER
discretionary
grant
program
2,900
2,920
2,940
2,960
2,980
3,000
3,020
3,040
3,060
(B
illio
n
s
o
f M
ile
s
)
36.3
37.0
41.0
9.9
10.3
19.8
42.8
43.1
34.2
10.4
15
20
25
30
35
40
45
50
($
b
illio
n
s
)
Purchasing Power Loss of the Highway Program
$32.5
$42.0
$51.8
$55.0
$-$10
$20
$30
$40
$50
$60
FY 2003
Funding
Level
Actual
Enacted as of
May 2008
FY 2003
Inflated for
Cost
Increases
(PPI)
Young-Oberstar $375
Billion
Proposal
(B
illio
n
s
)
AASHTO
Bottom
Line
Report:
Trends
•
VMT
increase
o
2.4
trillion
miles
in
1993
o
3+
trillion
miles
in
2007
o
2.9
trillion
miles
currently
•
Population
increase
o
305
million
in
2005
o
420+
million
2050
•
Truck
freight
expected
to
increase
by
100%
by
13
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
AASHTO
Bottom
Line
Report:
Needs
•
Highway
Investment
Requirements
o
Passenger
vehicle
demand
parallels
population
growth
(1%
per
year)
o
Truck
freight
demand
parallels
economic
growth
(2
to
3%
per
year)
o
Growth
in
VMT
will
at
least
equal
population
growth
•
Current
spending
is
$78
billion
Growth
Rate
of
VMT
Per
Year
Cost
to
Improve
Highways
(2006
Dollars)
1.4
percent
$166
billion
1.0
percent
$132
billion
Surface
Transportation
Authorization
15
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
NATIONAL
SURFACE
TRANSPORTATION
POLICY
AND
REVENUE
STUDY
Overall
Findings
•
We
need
a
clear,
comprehensive,
well
‐
articulated,
and
widely
understood
strategic
vision
•
Federal
program
be
consolidated
and
reformed
to
17
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
Freight
Rail
Findings
•
Freight
ton
‐
mile
expected
to
increase
by
92%
over
next
30
years
•
$272
billion
in
new
capital
investment
needed
through
2055
($5.7
billion
per
year)
to
meet
needs
o
Class
I
capital
expenditure
was
$1.4
billion
in
2006
Commission
Recommendations
•
“…the
Commission
recommends
that
a
portion
of
Customs
duties
be
dedicated
to
help
pay
the
costs
of
freight
‐
related
improvements.”
•
“The
Commission
recommends
that
a
19
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
NATIONAL
SURFACE
TRANSPORTATION
INFRASTRUCTURE
FINANCING
Existing
Revenue
Sources
•
Existing
Federal
Truck
‐
related
Taxes
($14.4
billion
in
revenues
in
2007
‐
2008)
o
Diesel
taxes
o
Heavy
Truck
and
Trailer
Sales
Tax
o
Truck
Tire
Tax
o
Heavy
Vehicle
Use
Tax
21
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
Potential
Revenue
Sources
To
produce
$1
billion…
•
Customs
Duties
and
Fees
o
3.5%
surcharge
•
Freight
Waybill
Tax
o
0.16%
tax
on
all
truck
freight
waybills
•
Weight
‐
Distance
Tax
o
.08
cent
per
ton
‐
mile
•
Container
Tax
o
$20
per
container
•
Harbor
Maintenance
Tax
Surface
Transportation
23
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A RSurface
Transportation
Authorization
Act
of
2009
Funding
•
Total
funding
$450
billion;
a$500
billion
with
High
Speed
Rail
•
$337.4
billion
in
Highway
investment
o
$100 billion for Capital Asset Improvement (NHS, IM, Bridge)
o
$50 billion for Metropolitan Mobility and Access (MMA)
o
$25 billion for Projects of National Significance
o
$162.4 billion for other FHWA‐administered programs (e.g. Highway
Safety Improvement, Surface Transportation, CMAQ, Freight, etc)
•
$99.8
billion
transit
o
$87.6 billion from HTF
o
HTF share was 15.2% in SAFETEA‐LU; it is increased to 19.5% in STAA
o
$12.2 billion from GF
•
$50
billion
high
speed
rail
corridors
Surface
Transportation
Authorization
Act
of
2009
•
Specific
authorizations
are
not
included
in
the
bill
nor
are
the
apportionment
formulas
•
While
the
top
line
numbers
are
in
the
bill
there
is
no
specific
breakdown
by
category
and
no
formulas
or
runs
that
would
show
state
shares
or
25
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
STAA
Freight
Improvement
Program
•
Managed
by
the
Federal
Highway
Administration
•
Establishes
a
dedicated
source
of
funding
for
freight
‐
related
highway
projects
•
Requires
States
to
consider
their
freight
transportation
needs
in
a
strategic,
statewide
context
•
Institutes
new
performance
measures
to
focus
State
efforts
on
improving
the
speed
and
reliability
of
freight
movement
•
Requires
States
to
inventory
and
assess
the
STAA
Freight
Funding
•
“Provides
state
formula
grant
funding
for
freight
and
goods
movement
projects
and
for
improving
States’
ability
to
conduct
freight
planning.”
•
“To
support
Freight
Improvement,
States
27
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A RSurface
Transportation
Authorization
Act
of
2009
National
Infrastructure
Bank
/
Metropolitan
Infrastructure
Bank
•
No
details
on
the
NIB
•
Metropolitan
Infrastructure
Bank
(Section
1304)
o
Provides
federal
credit
assistance
for
programs
of
projects
within
individual
metropolitan
areas
participating
in
the
MMA
program
o
Allows
DOT
to
enter
into
cooperative
agreements
with
MPOs
to
create
the
MIBs
TIFIA
program
(Section
1302)
•
Authorizes
credit
support
up
to
49
percent
from
33
AASHTO
’s
Vastly
Expanded
29
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
Legislative
Recommendations
•
Between
2010
and
2015,
in
order
to
invest
in
a
robust
surface
transportation
program
to
meet
significant
national
needs,
Congress
should
fund
a
$545
billion
multimodal
program
comprised
of:
o
Highway
program
funded
at
$375
billion
(2015
level
=
$75
billion)
o
Transit
program
funded
at
$93
billion
(2015
level
=
$18.5
billion)
o
Freight
program
funded
at
$42
billion
(2015
level
=
$9
billion)
o
Intercity
passenger
rail
program
funded
at
$35
billion
Legislative
Recommendations
•
Federal
government
must
continue
to
play
a
strong
role
in
investing
and
maintaining
an
integrated
and
multimodal
national
surface
transportation
system
•
States
and
local
governments
should
be
provided
with
maximum
flexibility
to
use
federal
revenues
from
existing
core
sources
to
meet
systemic
transportation
needs
•
Strong
accountability
measures
must
accompany
substantially
increased
funding
to
ensure
resources
31
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
Legislative
Recommendations
•
Adopt
a
long
‐
range
approach
to
funding
the
surface
transportation
system
that
gradually
moves
away
from
dependence
on
the
current
motor
fuels
tax
to
a
distance
‐
based
direct
user
fee
such
as
a
fee
on
vehicle
miles
traveled
•
Assure
that
any
climate
change
legislation
that
creates
a
new
revenue
source,
either
through
a
carbon
tax
or
cap
‐
and
‐
trade,
provides
substantial
funding
for
transportation
•
Eliminate
or
drastically
limit
earmarking
in
federal
“Menu
of
Options”
Core
Program
Funding
Options
•
Indexing
existing
and
new
Highway
Trust
Fund
Sources
beginning
in
2010
•
Increasing
the
gas
tax
by
the
equivalent
of
10
cents
per
gallon
•
Increasing
the
diesel
tax
by
the
equivalent
of
13
cents
per
gallon
•
Issuing
tax
credit
bonds
to
finance
surface
transportation
programs
•
Discontinuing
motor
fuel
tax
exemption
reimbursement
•
Reinstituting
collection
of
interest
on
Highway
Trust
Fund
balances
33
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
“Menu
of
Options”
Freight
Program
Funding
Options
(“Outside
the
Highway
Trust
Fund”)
•
Dedicating a share of customs fees
for transportation purposes
•
Enacting a bill‐of‐lading charge
for all highway and rail freight,
to be dedicated for freight infrastructure improvements
•
Enacting container fees
in support of freight needs
•
Including a dedicated source of revenue outside the Highway
Trust Fund
to support a Freight Corridors program
•
Providing authority for tolling
where determined by States to
be an appropriate funding solution
State
Freight
Network
Fund
•
Congress
should
create
a
state
‐
administered,
federally
supported
freight
transportation
infrastructure
investment
program
funded
at
an
average
level
of
$3
billion
apportioned
annually
over
the
term
of
the
authorization
o
Fund
would
provide
states
with
flexible
resources
to
support
“state
freight
plans”
developed
by
state
transportation
agencies
and
MPOs
o
State
plans
would
provide
for
strategic
investment
35
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
National/Regional
Freight
Corridor
Fund
•
Congress
should
create
a
fund
from
new
sources
of
revenue
for
investment
in
high
‐
return
projects
on
national
freight
corridors
o
Funding
at
least
$4
billion
annually,
$2
billion
to
be
apportioned
to
states
and
$2
billion
to
be
allocated
by
the
U.S.
DOT
o
A
portion
of
these
funds
should
be
provided
to
state
‐
initiated
organizations
responsible
for
planning
and
Investment
Tax
Credit
•
Congress
should
authorize
an
investment
tax
credit
for
Class
1
freight
rail
projects
that
create
needed
new
capacity
in
priority
corridors
and
generate
significant
public
benefits
•
Congress
should
also
reauthorize
the
37
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
Reauthorizing
Existing
Programs
•
Congress
should
reauthorize
the
following
programs:
o
Transportation
Infrastructure
Finance
and
Innovation
Act
amendments
(TIFIA)
‐
Sec.
1601
o
Extend
Regional
Railroad
Tax
Credits
o
State
Infrastructure
Banks
amendments
‐
Sec.
1602
o
Private
Activity
Bonds
for
Intermodal
Facilities
‐
Sec.
1143
o
Capital
Grants
for
Rail
Line
Relocation
Projects
‐
Sec.
9002
o
Rail
Rehabilitation
and
Improvement
Financing
amendments
(RRIF)
‐
Sec.
9003
Annual Highway Miles Traveled Fee (Cars Only) $ 17,298 1.0¢ $ 17,298 $ 17,616 $ 105,696 Annual Highway Miles Traveled Fee (All light duty vehicles) $ 27,610 1.0¢ $ 27,610 $ 28,682 $ 172,094 Annual Highway User Vehicle Fee $1.00 Fee = $ 263 $1.00 $ 263 $ 275 $ 1,652 Carbon Tax or Cap And Trade Auction Proceeds $ 553 30.0¢ $ 16,594 $ 17,250 $ 103,501 Container Tax $ 57 $20.00 $ 1,137 $ 1,336 $ 8,013 Diesel Tax Increase Plus Indexing 1¢/gal = $ 411 13.0¢ $ 5,337 $ 5,976 $ 35,856 Existing Highway Trust Fund Sources $ 40,566 $ 42,569 $ 255,413 Gas Tax Increase Plus Indexing 1¢/gal = $ 1,380 10.0¢ $ 13,796 $ 15,082 $ 90,489 General Fund Support for Intercity Passenger Rail $ 3,000 $ 3,000 $ 18,000 General Fund Transfers for Transit $ 3,167 $ 3,167 $ 19,000 Index Existing Highway Trust Fund Sources Beginning in 2010 $ 791 $ 3,032 $ 18,192 Index Heavy Vehicle Use Tax Retroactively to 1997 $ 411 $ 536 $ 3,217 Interest on Highway Trust Fund Balances $ 200 $ 200 $ 1,200 Motor Fuel Tax Exemption Reimbursement (Retroactive and Future) $ 1,057 $ 1,099 $ 6,593 Sales Tax on Motor Fuels 1.0% of Sales = $ 6,136 2.5% $ 15,340 $ 15,658 $ 93,949 Share of US Customs Revenues 1% of Receipts = $ 314 5.0% $ 1,570 $ 1,817 $ 10,904 Tax Credit Bonds for Highways and Transit $ 8,333 $ 8,333 $ 50,000 Tax Credit Bonds for Intercity Passenger Rail $ 4,167 $ 4,167 $ 25,000 Ton Freight Charge -- All Modes 1¢/ton = $ 162 10.0¢ $ 1,617 $ 1,801 $ 10,804
1¢/gal or equiv = $1 per TEU = 1¢/VMT = 1¢/VMT =
Proposed
Program
Funding
Levels
to
Restore
Purchasing
Power
Potential Program Name
2010
2011
2012
2013
2014
2015
TOTAL
Preservation and Renewal
$28.00
$30.80
$33.60
$36.40
$39.20
$42.00
$210.00
Highway Freight (Based on Existing Revenues)
$2.40
$2.64
$2.88
$3.12
$3.36
$3.60
$18.00
Highway Safety Improvement Program
$2.60
$2.86
$3.12
$3.38
$3.64
$3.90
$19.50
Operations
$2.40
$2.64
$2.88
$3.12
$3.36
$3.60
$18.00
Transportation System Improvement/Congestion Reduction
$11.10
$12.21
$13.32
$14.43
$15.54
$16.65
$83.25
Environment Program
$3.50
$3.85
$4.20
$4.55
$4.90
$5.25
$26.25
TOTAL - Highways
$50.00
$55.00
$60.00
$65.00
$70.00
$75.00
$375.00
TOTAL - Transit
$12.5
$13.7
$14.9
$16.1
$17.3
$18.5
$93.00
TOTAL - Freight (Based on New Revenues
Outside of Highway Trust Fund)
$5.0
$5.8
$6.6
$7.4
$8.2
$9.0
$42.00
TOTAL - Intercity Passenger Rail
$5.0
$5.3
$5.6
$5.9
$6.2
$7.0
$35.00
Current
State
of
Play
•
The
good
news:
a
high
priority
given
to
infrastructure
by
the
new
Administration
o
The
creation
of
new
law
is
underway
and
we
have
excellent
Congressional
leadership
•
The
bad
news:
the
Highway
Trust
Fund
has
gone
broke
41
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
Current
State
of
Play
•
Obama
Administration’s
“Stage
I
Reauthorization
– Down
Payment
on
Reform”
o
Duration:
18
months
o
$20
billion
General
Fund
transfer
to
Highway
Trust
Fund
o
Principles
•
Revenue
‐
neutral
general
fund
transfers
to
address
Highway
Trust
Fund
solvency
•
State
and
MPO
capacity
‐
building
measures
($300
million)
Current
State
of
Play
•
House
Extension
(HR
3617)
o
Duration:
3
months
(to
31
December
2009)
o
Maintains
FY
2009
pre
‐
rescission
spending
level
‐
$13.144
billion;
$10.735
billion
for
FHWA
o
No
repeal
of
$8.708
billion
rescission
of
contract
authority
o
Passed
House
•
Senate
Extension
o
Duration:
6
months
(to
30
April
2010)
43
2
N
D
A
N
N
U
A
L
B
I
– S
T
A
T
E
R
E
G
I
O
N
A
L
F
R
E
I
G
H
T
S
U
M
M
I
T
1 8
N O V E M B E R2 0 0 9
F O R T S M I T H , A R
