State of Alabama Transportation Infrastructure Funding

Prepared by the

Alabama Depar tment o f Transpor ta t ion

MAY 2 , 2014

State of AlabamaTransportation Infrastructure Funding


Funding TrendsProgram AllocationWhat about PPP’sOther Funding Thoughts

Last state gas tax increase was 5¢ in 1992

Last federal gas tax increase was 5¢ in 1993

[however, not available until 1997]

Funding Trends

Total State and Federal Highway Revenue

1991

1994

1997

2000

2003

2006

2009

2012

$-

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

$1,600,000,000

$1,800,000,000

$2,000,000,000

FederalStateTotal

Does not include Stimulus (ARRA) funding

Construction Costs

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 20060

50

100

150

200

250FHWA Construction Index

Construction Costs


1991 2012


$514 mil-lion

1991 2012


$514 mil-lion

$1,215million

1991 2012


$514 million

$92.5 m

2012

$1123million

1991

New Diversion


$514 mil-lion

$92.5 m

$493million

2013

Inflation

$630million

1991

New Diversion

Funding in 1991 Dollars[with Diversions and without Stimulus]

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

300000000

400000000

500000000

600000000

700000000

800000000

900000000

Adjusted Revenue

$493

$788m

35 % Drop

How do we spend our funds?

Program Allocation

HIGHWAY REVENUE

ESTIMATED STATE FUNDS 2013 $ 480,260,000

ESTIMATED FEDERAL FUNDS $ 733,095,000

TOTAL $1,213,355,000

ALLOCATION OF FUNDS

State Funds to Others $ 87,500,000

ALLOCATION OF STATE FUNDS TO OTHERS

ADMINISTRATIVE OFFICE OF COURTS* $ 35,000,000PUBLIC SAFETY* $ 28,500,000REVENUE DEPARTMENT $ 4,900,000STATE PERSONNEL $ 1,375,000STATE PARK MAINTENANCE $ 500,000INDUSTRIAL ACCESS APPROPRIATION* $ 11,000,000COUNTY ENGINEER SALARY SUPPORT $ 6,100,000CAPTIVE COUNTY INSURANCE $ 125,000

Total $ 87,500,000

ALLOCATION OF FUNDS

State Funds to Others $ 87,500,000Federal Funds to Others $ 130,427,000

ALLOCATION OF FEDERAL FUNDSTO CITIES AND COUNTIES

LARGE URBAN AREAS $ 35,705,000SMALL URBAN AREAS $ 13,312,000COUNTIES (Including Off-System Bridge) $ 35,711,000CMAQ – B’HAM AREA $ 10,919,000TRANSPORTATION ALTERNATIVES $ 16,780,000METROPOLITAN PLANNING $ 2,915,000GARVEE BOND PAYMENT* $ 18,000,000

Total $ 130,427,000

ALLOCATION OF FUNDS

State Funds to Others $ 87,500,000Federal Funds to Others $ 130,427,000ALDOT Overhead/Equipment/Building $ 83,625,000Routine/Emergency Maintenance $ 147,500,000Safety $ 60,420,000Interstate Maintenance $ 170,000,000Bridge Replacement $ 80,000,000Resurfacing $ 260,000,000ATRIP $ 33,883,000Unrestricted $ 10,000,000Capacity/System Enhancement/APD $ 150,000,000

Total Program $1,213,355,000

What Are Our Capacity Needs?

• Divisions identified needs of $9 billion.

• $4 billion in five year plan.

• Development of $1.5 billion - 10 year plan

Impact of ATRIP Program

$1.2 Billion : $966m federal + $242m match

Mobile County - $50.2 million (#2)

Baldwin County - $34.2 million (#6)

Will take $90 million from future program

We currently have sufficient funds to maintain

what we have and do a minor amount of capacity.

Trend is toward a maintenance only operation.

Program AllocationConclusions

Public Private PartnershipsPPP’s or P3’s

Are P3’s the answer?

Who

24 states and the District of Columbia26 states have not initiated a P3

transportation projectAlabama is included in the states that

have P3 projects

How Many

At least 96 transportation projects in 22 years worth a total $54.3 B

Half (48) of these projects occurred in just four states—Florida (10), California (11), Texas (18), Colorado (9)

Significance

The P3 market share of total U.S. capital investment in highways by all levels of government since 2008 is about 2 percent

Since 2008, P3 account for about 11 percent of total national capital investment in new highway capacity in 2011

Myth

P3s do not provide “new” or “free” money for building transportation projects

P3s do not provide project funding, they provide project financing—borrowed money that must bereimbursed, at a profit, to the lender. The investment is funded through government‐levied taxes and user fees, or through public borrowing—debt which must be repaid with interest with public funds generated by future tax or fee collections

Past Projects

No. of $State Population Rank Projects

AmountCalifornia 37.3m 1 11 $6.0bTexas 25.1m 2 18 $9.6bFlorida 18.8m 4 10 $5.6bColorado 5.0m 22 9 $4.9bAlabama 4.8m 23 4 ?

The 9 P3 projects in Co. consist of E-470 corridor and TRex. All in the Denver area. Denver area population is 2.4m.

The Future

P3’s are best suited for large projects with a high probability for strong revenue generation over many years

Perhaps two to four new P3 projects per year in the U.S. would be a reasonable assumption for the future

Source: “The Role of Private Investment in Meeting U.S. Transportation Infrastructure Needs” by William Reinhardt, publisher and editor of Public Works Financing for ARTBA Transportation Development Foundation, May 2011

Other Considerations

?

Future Fuel Economy Standards

Future Fuel Economy Standards

What do we drive?

1994 Honda Accord, #2 Top Seller

21/27 mpg city/hwy

2013 Honda Accord, #4 Top Seller

27/36 mpg city/hwy

What did we spend?

If you drove 12,000 miles – ½ city, ½ hwy

You consumed 508 gallons of gas

If you drove 12,000 miles – ½ city, ½ hwy

You consumed 389 gallons of gas

You paid $185 in gasoline tax

You paid $142 in gasoline tax

Vehicle Miles of Travel

0

10000

20000

30000

40000

50000

60000

70000

Vehicle Miles

Mil

lio

n V

ehic

le M

iles

1993 – 47,360 mvm

2010 – 64,150 mvm

35% Increase

Vehicle Miles of Travel

0

10000

20000

30000

40000

50000

60000

70000

Vehicle Miles

Mil

lio

n V

ehic

le M

iles

3.5% per year

1.2% per year

Solvency of Federal Highway

Trust Fund?

Other Considerations

Questions

?

Documents

State of Alabama Transportation Infrastructure Funding