Funding the Future A Forecast of Transportation Finance

1
Funding the FutureA Forecast of Transportation
Finance

• Dan Kessler
• Assistant Director of Transportation
• North Central Texas Council of Governments
• TEMPO, Executive Director

2
FUNDING THE FUTURE CONTRIBUTORS

• TEMPO/TxDOT Workgroup
• Brian Barth, TxDOT, Fort Worth District 
• Andrew A. Canon., Hidalgo County MPO 
• Christopher Evilia, Waco MPO 
• Jeanne M. Geiger, San Antonio, Bexar County MPO
• Ron Hagquist, TxDOT, Government and Public
  Affairs Division 
• Dan Kessler, North Central Texas Council of
  Governments, Dallas-Fort Worth MPO 
• Ashby Johnson, Houston-Galveston Area Council,
  Houston-Galveston MPO 
• Randy Redmond, TxDOT, Beaumont District 
• Jessica Castiglione, TxDOT, San Antonio District
• Research and Development Assistance
• Texas Transportation Institute Dr. David Ellis,
  Dr. Bill Stockton, Dr. Tim Lomax
• Center for Transportation Research Rob Harrison,
  Dr. Khali Persad, Lisa Loftus-Otway, Seokho Chi,
  Patricia Franco, Prakash Singh, Alejandra
  Cruz-Ross
• University Of Texas School of Engineering
  Transportation Systems Management Graduate
  Course, Dr. Michael Walton, Professor
• Students Lu Gao, Andrew Karl, Eleni Pappas,
  Daniel Pachy, Melissa Thompson, Dan Seedah,
  Beatriz Rutzen, Hui Wu, Yao Yu, Sruthi
  Peddibhotla, Migdalia Carrion, Tadahisa
  Muramatsu

3
WORKGROUP CHARGE
To develop a transportation revenue forecasting
model, a range of reasonable model input
assumptions, and to utilize this model to develop
estimates of future available State and federal
funding for capacity improvements.
4
TRENDS MODEL
Transportation Revenue Estimator and
Needs Determination System
Advancements in Revenue Forecasting

• Provides rapid multiple-scenario forecastsbased
  on user input assumptions.
• Captures the impact of future fuel efficiency on
  transportation revenue.
• Accounts for the diversion of transportation
  revenues to non-transportation uses.
• Allows for user-specified level of investment in
  system maintenance.
• Serves as a web-based tool for evaluating current
  and future revenue strategies.

5
TRENDS MODELCaptures Population Growth Impacts
and Provides Flexibility for Evaluating Future
Scenarios
Texas Population Growth
45
High growth Medium growth Low growth
40
35
Population (Millions)
30
25
20
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
Source Texas State Data Center
6
TRENDS MODELCaptures Fuel Efficiency Impacts and
Provides Flexibility for Evaluating Future
Scenarios
Fuel Efficiency Scenarios
50
Median forecasts of technology and market
penetration result in 34 mpg average by 2030.
45
40
35
30
Miles per Gallon
25
20
15
10
5
0
2005
2010
2015
2020
2025
2030
Source Cambridge Systematics/TTI
7
FUNDING THE FUTUREProvides a Baseline Revenue
Forecast
200
Total Revenue 155B
PROP. 14
MOBILITY FUNDS
OTHER FEDERALREVENUE
OTHER AGENCYREVENUE
Billions
Baseline revenue forecast in nominal dollars,
2009 to 2030 (adjusted for inflation)
8
FUNDING THE FUTUREProvides a Range of Revenue
EstimatesThrough Combined Scenarios
Range of Possible Revenues (2009 to 2030)
200
180
169
165
161
155
153
160
148
144
137
120
Billions
80
40
9
FUNDING THE FUTURETRENDS Model Revenue Variables

• State Gasoline and Diesel Taxes
• Federal Gasoline and Diesel Taxes
• Indexing State and Federal Motor Fuels Tax
• Vehicle Registration Fees
• Vehicle Miles of Travel (Distance-based) Tax
• Levels of Bond Financing

10
FUNDING THE FUTUREProvides Funding Estimates
from Possible Revenue Enhancements
Possible Revenue Enhancements
Billions
77 B
11
FUNDING THE FUTURENeeds Versus Revenue
12
2030 Committee Scenario Implementation and
Congestion Costs
Reduce Congestion
Current Funding Trend
Maintain Economic Competitiveness
PreventWorseningCongestion
Not Adjusted for Inflation
13
Translating 2030 ReportAdjusting for Inflation
and State Share of Needs
Historically, 2/3 of mobility is State
investment
TMMP/TUMP estimate of need 584B
14
Total Needs 487B
Other TxDOT Functions and Other Agencies
Amount To 100 Billion of Encumbrances.
15
Estimated Expenditures forOther TxDOT Functions
(2009 2030)
16
TxDOT Funding to Other Agencies(2009 2030)
17
FUNDING THE FUTURENeeded Revenue Challenge 2030
Committee Investment Scenarios
2030 Report Recommended Scenario
527
487
403
332
206
155
MaintainEconomicCompetitiveness
CurrentFundingTrend
PreventWorseningCongestion
ReduceCongestion
Total revenue needs increased by 100B to include
anticipated TxDOT encumbrances.
18
Maintaining Texas Highway System

• Pavement Lane Miles 193,000

Bridges 51,000
19
Maintaining Texas Highway System

• 2030 Committee Recommendations
• Pavement Maintenance
• Preserve the asset value of all pavements by
  maintaining the 90 percent good or better
  pavement condition goal.
• Establish a statewide system to forecast and
  prioritize pavement maintenance needs.
• Bridge Needs
• Replace on-system structurally deficient and
  substandard for load only bridges by 2012
• Replace remaining structurally deficient,
  substandard for load only and functionally
  obsolete bridges by 2030.

20
Maintaining Texas Highway System
Cost to Meet Pavement and Bridge
MaintenanceNeeds Based on 2030 Committee
Recommendations
21
Funding the FutureHow Much Do We Pay?

• Average Passenger Vehicle Cost Per Mile(Assuming
  12,000 Miles Driven Per Year)

22
FUNDING THE FUTURETEMPO / TxDOT Ongoing
Initiatives

• Use the TRENDS model to develop a 2035/2040
  baseline revenue forecast with statewide
  consensus for development of upcoming
  Metropolitan Transportation Plans, Texas
  Transportation Plan, TxDOT Unified Transportation
  Program (UTP), and Transportation Improvement
  Programs/Statewide Transportation Improvement
  Program
• Provide TRENDS model to all 25 MPOs
• Develop local option TRENDS model for 25 metro
  areas

23
FUNDING THE FUTURETEMPO/TxDOT Workgroup Next
Steps

• Update/Monitor TRENDS model to account for
• Changes in State and Federal Legislation
  (Diversions)
• Population Growth and Fuel Efficiency
• Allocation of Funding to Maintenance Activities
• Collaborate with TxDOT Finance Division on
  bridging the gap between cash flow estimates
  (short term) and TRENDS revenue forecasts
  (mid-range to long term)
• Provide assistance to State Legislature in
  evaluating future revenue options for the 82nd
  Legislative Session

24
FUNDING THE FUTURETxDOT Next Steps

• Approve Baseline Revenue Forecast for Texas
  Transportation Plan Development
• Set Performance Goals for all Investment
  Strategies
• Allocate Investment Levels for all Strategies
• System Preservation
• Routine maintenance
• Preventive maintenance
• Rehabilitation
• Bridges
• Congestion Management
• Capacity Improvements