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Revenue Enhancement 2013

Wayne Hammond of the AGC, and Stuart Davis of IAHD formed a Coalition.

The purpose of the Idaho Transportation Coalition is to raise awareness of the need for

long term sustainable funding for Idaho’s roads and bridges.

The Coalition’s partners are a broad base of Idaho transportation stake holders.

• Commercial Trucking

• Agriculture

• Freight

• Governmental Entities

• Natural Resources

• Citizen’s Committees

Genesis

Revenue Enhancement Legislation introduced 2013 Session• HB 337 - Imposed an additional 1% sales tax for 5 Years

- Generated $202.7 million in additional funding..

• HB 338 – Variety of fuel tax/transfer fee/registration..- Generated $236.5 million at end of five year phase in

• HB339 – Sales Tax on tires/auto related/lease and rental increase- Generated $25.4 million at end of five year phase in

• HB340 – Increases fuel and diesel fuel taxes/increase transfer fee on delivery or storage/enforcement of dyed fuel program- Generated $149.7 million at end of five year phase in

• HB341 – Registration fee increase on cars and trucks/hybrid fee/ increase overweight fees- Generated $61.4 million at end of five year phase in

Coalition Held First Meeting on July 23rd

Over 50 people attended

The Purpose and Scope of the Coalition was discussed, and stakeholder input was incorporated

into setting the agenda for the process of raising the awareness of Revenue Enhancement.

Today’s Presentation

• Revenue shown is for Idaho’s entire transportation system

• Totals are approximated

Revenue Needs

The Task Force on Modernizing Transportation Funding recommended that Idaho should increase transportation funding by $543 million annually for all system needs, or by at least $262 million annually to operate, preserve, and restore the existing system. The system is suffering from:

• Aging infrastructure: Much of Idaho’s infrastructure was built in the 1950s and 1960s.

• Growing demand: Idaho has been one of the fastest growing states in the nation for over a decade.

• Flat revenue: Idaho’s fuel tax, currently 25¢ per gallon, has not been raised since 1996.

• Inflation: In inflation-adjusted value, the 25¢ fuel tax implemented in 1996is worth only 17¢ today.

Real World Examples

In 1996, Burley Highway District paved 10 miles of new road every year.

In 2013, the Highway Districts paved just 1 mile of road.

Currently Deficient Local Bridges

Currently Deficient State Bridges

679 DeficientState and Local Bridges

395 State and Local Bridges Built Prior to

World War IILocal Bridges

State Bridges

Fuel Tax Progression

1960 1970 1980 1990 2000 2010

5¢

10¢

15¢

20¢

25¢

+ 1¢+ 1.5¢

+ 1¢+ 2¢

+ 1¢

+ 2¢

+ 3.5¢

+ 3¢

+ 4¢Fuel Tax Revenue Increases 1960 - 2013

Sources of State Transportation Revenue

— FY13 Actual Revenue Before Distribution • Dollars in millions and rounded —

PassengerVehicle

Registration$50.5

CommercialVehicle

Registration*$50.2

*Includes Permits**Includes Special Fuels

Misc. Fees $8.3

Total Revenue to HDA $346.7

Gasoline Tax$172.1

DieselTax**$65.6

Fuel Taxes$237.7

Revenue Potential: Fuel Taxes

1¢ of additional fuel tax realizes approximately $9,000,000.00

Idaho Currently assesses ¢25.0 per gallonThe Federal Government assesses ¢18.4

Total State/Federal Tax 43.4%

National Average 49.5%

Eliminate the sales tax exemption on gasoline and diesel

6% increase = $175 million

Revenue Potential: Fuel Taxes

Revenue Potential: Sales Tax

Increase the state sales and use tax from 6% to 7% Place the additional 1% sales tax directly into the Highway Distribution AccountEstimated Annual Revenue Increase: $202.7 million*

Bulk Petroleum Transfer Fee

1¢ Transfer Fee for the Petroleum Clean Water Trust Fund (PCWTF).

Applies to all bulk petroleum products brought into Idaho.

Estimated Annual Revenue Increase: $10.5 million

Sales Tax on Tires

Transfer the 6% sales tax on tires to the Highway Distribution Account

Estimated Annual Revenue Increase: $23.4 million

Based on SIC Code 553

Passenger Vehicle Registration Fees

Approximate revenue potential of passenger vehicle registration fees:

10% increase =$5 million

50% increase =$25 million

100% increase =$50 million

Value-Based Registration Fees

Charge a registration fee, based on vehicle MSRP, age or other factor

Commercial Vehicle Registration Fees

Approximate revenue potential of Commercial vehicle registration fees:

1% increase = $500,000

5% increase = $2.5 million

10% increase = $5 million

Commercial Vehicle Mileage Surcharge

Charge a cents per mile fee, based on weight, for trucks weighing 26,001 lbs. or more

Estimated Annual Revenue Increase: $50 to $60 million

Note: Elimination of Idaho’s truck weight/distance tax in 2001 caused a $9 to $10 million annual revenue shortfall.

Dyed Fuel Enforcement

Enforce the current state law that prohibits dyed fuel from being used in vehicles that are registered to operate on Idaho Highways

Estimated Annual Revenue Increase: $2.7 million

Electric / Hybrid Vehicle Fee

Implement a $140 annual fee for electric vehicles

Implement a $75 annual fee for hybrid vehicles

Estimated Annual Revenue Increase: $720,000

Rental Car Fee

Implement a 6% rental car fee

Estimated Annual Revenue Increase: $2 million

Safer Highways and Bridges

Reduced Unemployment

Improve Idaho’s Economy

Investments Today, Save Money Tomorrow

What is the return on investment?

Formed sub groups

At the first stakeholders meeting, ITC formed specialized groups to discuss pros and cons of

all issues related to revenue enhancement. • Fuels• Sales Tax • Trucks• Vehicles• Public Awareness (including Economic Impact Study)

Economic Impact Study

ITC is collaborating with a highly respected national consulting firm specializing in utilizing TREDIS software to produce a study that will demonstrate the positive effects

of passage of revenue enhancement, including:• Economic Impacts• Traffic Flows• Growth Patterns & Pace• Job Creation in all Sectors

Study will use Idaho data from ITD and Compass.

Formed sub groups

The next steps for ITC will be to• Finish subcommittee meetings• Compete economic study• Meet with Legislators, Governor’s office, and other

stakeholders to develop information to be utilized by legislature for revenue enhancement efforts

The Purpose of the Idaho Transportation Coalition is to raise awareness of the need for

long term sustainable funding for Idaho’s roads and bridges.

The coalition also provides an opportunity for all stakeholders to add input and

share ideas.