Division of Budgets July 6, 2011
Transportation Funding in California
2
Transportation Funding & Challenges
Funding complex and unstableFunding is insufficientRevenues currently decliningIncreased oversight
Scarce resources increases scrutiny of every priorityIncreasing mandates Increased demand for transportation
3
Reality Check
What does it really take to fund a highway project? How many gallons of gasoline need to be sold to fund a single
mile of road rehab? $240,000 avg cost per mile State excise tax of $0.18/ gal, only $0.1077/ gal remains with the State Need 2.2 million gallons!
An average tanker truck holds 9,000 gallons of fuel, generating almost $1,000 in revenue. So a $1 million project would take the revenue from the fuel in over 1,000 tanker trucks!
4
State Excise Tax Analogy
0.0 1.0 2.0 3.0 4.0
I t takes the revenue generated from the sale of 2.2 million gallons of gasoline to pay for the rehabilitation of one lane mile of highwyay - The amount contained in 3.4 miles of tanker trucks parked end- to- end. That's enough gasoline to drive an average car 47 million miles!
N
5
Statewide Transportation Resources:State, Local and Federal Funding
Bonds are limited-term funding
State Revenues17%
Local Revenues56%
Federal Revenues12%
Bonds15%
6
Statewide Transportation ResourcesBy Administering Agency
State-Admin-istered Re-
sources29%
Locally-Admin-istered Re-
sources71%
7
Major Uses of State Revenue Sources
Local Appor-tionment
28%
Bond Debt Service/
General Fund15%
Caltrans Projects and Maintenace
58%
8
Capital Investment Increasing Over Time…
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
$0$1,000,000$2,000,000$3,000,000$4,000,000$5,000,000$6,000,000$7,000,000$8,000,000$9,000,000
State-Funded Transportation Capital
Local Systems Investment
9
…But Inflation Reduces Value for Money
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
Comparative Loss of Buying Power Since 1994
Percent Change in Buying Power Percent Change in VMT
This chart compares the cumulative change in Vehicle Miles Travelled against the buying power of the excise tax, using the California Highway Construction Cost Index
10
External Factors Limit Available Funding
11
The Future
Proposition 1B bonds will be exhaustedARRA spending will completeInflation expected to outweigh revenue growthCost of doing business expected to continue
increasingUncertainty of federal funding, at least until a new
act is in place
12
What Have We Done
Federal Toll Credit program Minimize need for state cash on federal projects
Budgetary Flexibility Allows changes within the framework of the budget to
meet changing needs without undue delay.Cash Basis and Cash Management
Shifted to a cash basis in 2003-04, managing cash to maximize project funding
Broadening the public view by shifting the focus to full project cost (including support, R/W, etc)