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MnDOT Revenue Outlook Duane Leurquin Office of Finance Minnesota Department of Transportation Minnesota Transportation Alliance November 10, 2011
MnDOT Revenue Outlook
Duane LeurquinOffice of Finance
Minnesota Department of Transportation
Minnesota Transportation AllianceNovember 10, 2011
Agenda How state raises funds for highways How state funds are distributed to road systems How state revenue has changed in last 13 years End of Session (EOS) forecast Recent travel and tax trends Federal Outlook Debt Service and Fund Balance compared to Policy 2012-2013 Biennial Budget overview
State Highway User Taxes FY 2010
$ in millions
3
GAS TAX $823.4
TAB FEES $531.6
MOTOR VEHICLE SALES TAX $216.7
TRUNK HIGHWAY FUND COUNTY STATE AID FUND MUNICIPAL STATE AID FUND
62% 29% 9%
HIGHWAY USER TAX DISTRIBUTION FUND
$1,577.3
5% SET-ASIDE
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $-
$500
$1,000
$1,500
$2,000
$608 $642 $648 $651 $656 $644 $648$743
$823 $849 $869 $886 $888 $887
$479$487 $496 $492 $488 $481 $477
$501
$532 $545$567 $587 $602 $615
$193$195 $176 $165 $163 $159 $196
$196
$217$272 $321
$339 $348 $366
$1,280$1,324 $1,319 $1,308 $1,307 $1,284 $1,322
$1,440
$1,572$1,666
$1,757
$1,812 $1,838$1,868
Minnesota Highway User Tax Revenue
$s in Millions, Actual Revenue 2002-2010; End of Session 2011 Forecast 2011-2015, Budgetary Basis
Motor Fuel Tax
Tab Fees
Motor Vehicle Sales Tax
End of Session 2011 Forecast
Total HUTD Rev-enue
4
2011 2012 2013 2014 2015 $1,500
$1,550
$1,600
$1,650
$1,700
$1,750
$1,800
$1,850
$1,900
$1,657
$1,747
$1,806
$1,828
$1,860
$1,671
$1,762
$1,818
$1,844
$1,875
Highway User Tax Distribution (HUTD) Revenue Forecast
Nov '10 FcstEOS '11 Fcst
State Fiscal Year
$ in
Mill
ions
5
Gas Tax2011 EOS vs. 2010 Nov
Gas tax up $21.6M (1.2%) from November forecast for FY12-13. Forecast assumes slightly higher consumption than prior forecast
for FY11 – FY13. Reviewed Global Insights (GII), Energy Information Administration
(EIA) consumption forecasts, and actual trends for guidance.
The outlook for fuel consumption is affected by: the economy world oil prices longer term policy (CAFE standards) trends consumer trends toward more fuel efficient vehicles
Trends can be offsetting.
6
2011 2012 2013 2014 2015 $820
$830
$840
$850
$860
$870
$880
$890
$900
$847
$859
$875 $877 $879
$849
$869
$886 $888 $887
Gas Tax Forecast
Nov '10 FcstEOS '11 Fcst
State Fiscal Year
$ in
Mill
ions
7
Highway Consumption of Gas & Special FuelsHistory and Global Insight Forecast(Billions of Gallons, Annual Rate)
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
140
145
150
155
160
165
170
175
180
185
190
GII Oct'11
GII Feb'11
GII Nov'10
History
Billions of Gallons
8
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
0.0
1.0
2.0
3.0
4.0
5.0
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Mot
or F
uel C
onsu
mpt
ion
(bill
ions
of g
allo
ns)
VMT (billions of m
iles)
VMT (right scale)
Fuel Consumption (left scale)
Vehicle Miles Traveled (VMT) and Motor Fuel ConsumptionAll Minnesota Roads, 1975-2009
Registration Tax and Motor Vehicle Sales Tax (MVST)2011 EOS vs. 2010 Nov
Registration taxes up $20.3 M (1.8%) from the November forecast for FY12-13.
MVST is down $14.5 M (2.1%) for the same period.
GII’s February 2011 national new car sales forecast increased from Nov. 12.0M to 12.3M in FY11, and from 13.9M to 14.1M in FY12.
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2011 2012 2013 2014 2015 $500
$520
$540
$560
$580
$600
$620
$640
$545
$558
$575
$589
$601
$545
$567
$587
$602
$615
Registration Taxes Forecast
Nov '10 FcstEOS '11 Fcst
State Fiscal Year
$ in
Mill
ions
11
2011 2012 2013 2014 2015 $-
$50
$100
$150
$200
$250
$300
$350
$400
$261
$326
$349 $355 $373
$272
$321 $339
$348 $366
Motor Vehicle Sales Tax (MVST) to HUTD Forecast
Nov '10 FcstEOS '11 Fcst
State Fiscal Year
$ in
Mill
ions
MVST 60%
MVST 54.5%
12
Unit Sales of New Light VehiclesHistory and Global Insight Forecast
(Millions of Units, Annual Rate)
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
6
8
10
12
14
16
18
20
GII Oct'11
GII Feb'11
GII Nov'10
History
Millions of Units
13
Federal Highway Formula Funding Outlook
Previous multiyear surface transportation law “SAFETEA-LU” expired in September 2009
Has been temporarily extended eight times since then through continuing resolutions
Current extension expires March 31, 2012
MnDOT cash position
14
Debt Service Forecast
2009 2010 2011 2012 2013 2014 20150.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Debt Service Debt Limit
15
Fund Balance Forecast
2011 2012 2013 2014 20150.0%
5.0%
10.0%
15.0%
20.0%
Fund Balance Fund Balance Limit
Major Debt Service Risks
Interest rates on uncommitted debt
Revenue forecasts
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2012-13 Biennial Budget overview Essentially, we received the budget changes we expected
in the Trunk Highway Fund.
Biennial State Road Construction appropriations:
Increased and changed between years to utilize federal funding
Increased for Better Roads for Minnesota, which required appropriations to utilize federal funding and existing fund balance and debt.
Increased due to an additional rider that allows MnDOT to transfer up to $20 million for economic development in 2012.
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Greater MN Transit A General Fund reduction occurred in
the Transit Assistance fund - $2.7M total for the biennium.
Motor vehicle sales tax on leased vehicles (MVLST) was $5M to the fund in FY11. This was forecast by MMB to be zero.
CY 2012-14 Contract Budgets• CY 2012 total grant contracts (Federal, GF,
MVST) at same total level as 2011• CY 2013 can be a 1% increase over 2012• CY 2014 can be a 2% increase over 2012
• Any MVLST revenues or unused contingency will be programmed in succeeding years
Bienniums — Year by Year
2010 2011 2012 2013$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
MVLSTMVSTGeneral Fund
Millions
Questions?Duane LeurquinOffice of Finance
Minnesota Department of [email protected]
651-366-3165
FY2011-3
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