NCDOT Finance Overview NC FIRST Commission H. Burt Tasaico July - - PowerPoint PPT Presentation

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NCDOT Finance Overview NC FIRST Commission H. Burt Tasaico July - - PowerPoint PPT Presentation

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NCDOT Finance Overview NC FIRST Commission H. Burt Tasaico July 12, 2019 Agenda Why are we here? Problem and Transportation Disruptors The User Pay Principle NC Transportation Milestones NC Transportation Revenues

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NCDOT Finance Overview

NC FIRST Commission

  • H. “Burt” Tasaico

July 12, 2019

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Agenda

  • Why are we here?
  • Problem and Transportation Disruptors
  • The User Pay Principle
  • NC Transportation Milestones
  • NC Transportation Revenues
  • Federal
  • State
  • Variables and Sources
  • Trends
  • Driving Forces Transforming All of Mobility
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Why are we Here

Problem

Transportation Disruptors Automation, Connectivity Shared mobility, CAFÉ* standards, Demographics, Electric/Hybrids Declining Revenues Motor fuel, highway use and driver and vehicle fees Growing population wanting safe, affordable, eco-friendly logical mobility that is seamless

*CAFÉ – Corporate Average Fuel Efficiency

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Transportation Disruptors

  • Electrics/Hybrids
  • Ride Sharing
  • Micro-Mobility
  • Population
  • Automation
  • Connectivity
  • Federal Funding
  • CAFÉ Standards
  • Car Ownership
  • Commuter Preferences

Miles Driven

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User Pay Principle

Motor Fuel Tax Driver & Licenses fees Highway Use Tax Federal Funding

Innovative Financing PPP’s GARVEEs, SIBs, TIFIA, BABs, PABs, Section 129, Toll Credits, etc.

GARVEE – Grant Anticipation Revenue Vehicles TIFIA - Transportation Infrastructure Finance and Innovation Act SIB – State Infrastructure Bank BAB – Build America Bonds PAB – Private Activity Bonds (2009 – 2010) Section 129 – of Title 23

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Vehicle Ownership - $7,000/year

Depreciation 33% Financing 7% Insurance 20% Maintenance And Tires 16% Transportation System (TS) Fees and Fuel 24% Fuel 17%

  • Gas 13%
  • Tax* 4%

TS Fees 7%

* Federal and State motor fuel taxes

AAA 46.7 ¢/mile IRS 54.5 ¢/mile Transportation System Fee + Fuel Tax = 11% ($770)

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North Carolina – Funding Milestones

Before 1900s 1900 to 1949

  • Turnpikes
  • Plan Roads

1st Federal Road

  • The National

Road – (1806) Private Investors

  • NC Highway Commission

(1901 & 1915)

  • Highway Fund
  • Motor Fuel Tax (1921/1907?)
  • Present DMV Fees
  • Bonding (1921, 1923,1925,1927 -

Total $115M)

  • 1st Federal Aid (1916)
  • Federal Motor Fuel Tax (1932

for deficit reduction)

Vehicles and Needs 1950 to 1988 Building Progress

  • NC Department of Transportation
  • Local Funding (Powell Bill)
  • Motor Fuel Tax (Indexed)
  • Increased DMV Fees
  • More Bonding
  • First TIP
  • Trust Fund – Highway Account
  • Trust Fund – Mass Transit Account
  • Federal Diesel Tax ≠ Gas Tax
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North Carolina – Funding Milestones (Cont)

1989 to 1999 2000 to Present

  • NC Highway Trust Fund
  • Highway Use Tax (1989)
  • More Bonding
  • Project Cash Flow
  • Motor Fuel Tax Collection at Distribution Pt

Population & Growth

  • Multi-year Authorization Bills
  • Last Federal Gas Tax Increase
  • Project Cash Flow
  • State Infrastructure Bank
  • GARVEE
  • TIFIA

Building Progress

  • Cash Management Policy
  • Increased DMV Fees
  • Debt Limit
  • Turnpike
  • 10 Year Work Plan
  • STI
  • SL 2015-2 & SL 2015-241
  • SL 2018-16
  • SAFETEA-LU, MAP-21 Expired
  • FAST Enacted
  • Federal Trust Fund Bailouts
  • Federal Gas Tax renewed
  • CAFÉ Standards
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NC Transportation Revenues

75%

Overall

25%

Overall

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Federal Aid Revenue Sources

Motor Fuel Tax:

  • Gasoline

18.4 cents/gallon

  • Diesel

24.4 cents/gallon Truck Sales: 12% of retail price for trucks over 33,000 lbs. or trailers over 26,000 lbs. GVW Truck Use:

  • Up to 55,000 lbs.

No Tax

  • Over 55,000 lbs.

$100 + $22/1,000 lbs. over 55,000 lbs. ($550 maximum) Tires:

  • 9.45 cents/10 pounds over 3,500 lbs. maximum rated load

capacity

  • 4.725 cents for bias-ply or super single tire

General Fund Transfers: $143.6 billion since 2008 (through 1/2016)

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State Revenue Sources

Motor Fuel Tax Gasoline and Diesel 36.2 cents/gallon (effective 1/1/2019) DMV Fees 20+ Driver and Vehicle fees Most fees adjusted Quadrennially based on CPI Highway Use Tax 3% of vehicle sale transaction net of trade-in General Fund Transfers None

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12 Source Variables Data Sources Rate

  • Population – OSBM Demographics
  • CPI-Energy – Global Insight
  • Legislative

Fuel Consumption

  • In-House Model (SAS)

Rate

  • General Statute

Transactions

  • CPI – Global Insight
  • Regression Analysis
  • NC Population Growth

Rate

  • General Statute

Vehicle Pricing

  • In-House Mode (SAS)

Federal

Revenue

  • Congressional Budget Office

Motor Fuel Tax DMV Fees Highway Use Tax

Revenue Variable and Data Sources

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13 Motor Fuel Tax DMV Fees Highway Use Tax Federal

10 Year Revenue Forecast – State & Federal Sources

Year over Year Change – Total Revenue

Year over Year Change – Revenue Source

$ in Millions

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NCDOT Annual Highway Composite Construction Cost Index by Calendar Year (2012 is base year)

130 120 110 100 90 80

CCI 2012 100.0 2013 101.6 2014 95.4 2015 103.0 2016 110.7 2017 118.7 2018 120.6

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Future Driving Forces Transforming All of Mobility

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Historical – Vehicle Technology Deployment

Vehicle Technology Deployment Cycle Typical Cost Premium Market Saturation Share Air bags 25 years (1973-98) A few hundred dollars 100%, due to federal mandate Automatic transmissions 50 years (1940s-90s) $1,500 90% U.S. 50% worldwide Navigation systems 30+ years (1985-2015+) $500 and rapidly declining Uncertain; probably

  • ver 80%

Optional GPS Services 15 years $250 annual and rapidly declining Uncertain - 10+% Hybrid vehicles 25+ years (1990s-2015+) $5,000 Uncertain - Currently about 4%

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Evolving – Vehicle Fuel

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Projection – Autonomous Vehicle Deployment

Stage Decade Vehicle Sales Vehicle Fleet Vehicle Travel Available – large price premium 2020s 2-5% 1-2% 1-4% Available - moderate price premium 2030s 20-40% 10-20% 10-30% Available – minimal price premium 2040s 40-60% 20-40% 30-50% Standard - included on most new vehicles 2050s 80-100% 40-60% 50-80% Saturation (everybody who wants it has it) 2060s ? ? ? Required – on all new and operating vehicles ??? 100% 100% 100%

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Projection – Autonomous/Vehicle Ownership

The Car - will grow smarter and more efficient, with high-efficient engines, lighter materials and autonomous driving vehicles The Industry – will evolve with new competition from tech companies, and suppliers capable of producing high- tech parts at low prices

Current Self Ownership Multiple Ownership Single Ownership

The Driver – will look at cars differently sharing cars and using them as a space to consume media and make calls Transportation Funding Model – will have to evolve in anticipation of the change

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Questions?