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State Transportation Dollars: Addressing Needs Or Running Out Of Gas

State Transportation Dollars: Addressing Needs Or Running Out Of Gas. Virginia Municipal League Transportation Policy committee July 24, 2014. General Assembly Passed HB 2313 With High Hopes.

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State Transportation Dollars: Addressing Needs Or Running Out Of Gas

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  1. State Transportation Dollars: Addressing Needs Or Running Out Of Gas Virginia Municipal League Transportation Policy committee July 24, 2014

  2. General Assembly Passed HB 2313 With High Hopes • TheWashington Post headline was typical of the reaction following the first major transportation revenue bill in 27-years. • Virginia lawmakers approve sweeping transportation plan • The conference report for the bill projected $3.5 billion over a five-year period for statewide construction and maintenance projects. An additional $1.7 billion and $1.0 billion were also projected for transportation projects in Northern Virginia and Hampton Roads, respectively. • HB 2313 dramatically overhauled the way the state will pay for roads, highways, rail and transit.

  3. Gov. McDonnell Nicks The Revenues • The governor offered amendments that clarified the bill and reduced projected revenues in the Reconvened Session following the passage of HB 2313. • Reduced Alternative Fuel Vehicle Fee from $100 annually to $64 each year, cutting $24.0 million from the 5-year total ($66.6 million to $42.6 million). • Trimmed the Titling Tax from a maximum rate of 4.3 percent to 4.15 percent, cutting $95.3 million from the 5-year total ($1,213.8 million to $1,118.5 million). • The General Assembly accepted the amendments, reducing the five-year statewide total by 3.0 percent or $119.3 million. • The Northern VA package was also reduced by $183.2 million (11%) over five-years by changing the congestion fee (grantor’s tax) from 25¢ per $100 to 15¢ per $100 and the TOT increment from 3.0 percent to 2.0 percent.

  4. New Spending Boost for Maintenance, Construction, Transit, & Rail

  5. More Revenue Nibbling • In the aftermath of the 2013 Session, constituents stung several Northern Virginia legislators over the $64 annual fee on hybrid electric motor vehicles. • Bills were introduced in the 2014 Session to address these concerns. As a result, legislation (SB 127 and HB 975) was enacted to repeal the annual $64 tax. • The revenue impact, beginning in FY15 is ($6.9 million), increasing to ($10.7 million) by FY19 and beyond.

  6. Stormy Days Ahead? • In February, VDOT reported that the state revenue forecast for FY 2014 – F 2019 would be reduced by $796.0 million. • For the same period, VDOT forecasted a reduction of $123.0 million in federal and other sources. • For the FY 2015 – FY 2020 improvement program, VDOT forecasted $491.0 million less than the previous six-year improvement program. • $55.0 million less in state and federal revenues • $436.0 million less in anticipated bond sales • The projections for the new six-year improvement program mean fewer construction dollars. • Elimination of funds for urban and secondary roads through the construction formula • Transfers from the construction budget to maintenance is projected at $724.4 million for fiscal years 2015 – 2020.

  7. Transit Challenges • If Congress fails to pass the Marketplace Fairness Act by January 1, 2015, then the tax at the “rack” increases to make up the revenue loss. • However, the new increment would be used exclusively for road maintenance. DRPT expects roughly more than a $20.0 million revenue loss for transit projects. • After the state bonds for transit are exhausted, even with the HB 2313 revenues, the state match for transit capital will drop to about 10.0 percent by FY 2020. Dropping from $160.0 million in FY15 to less than $120.0 million in FY 2020 and to just over $60.0 million by FY 2023.

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