let's fix funding! panel apwa 2016
TRANSCRIPT
Chris Evers727-638-1699
Let’s fix funding!
The wisdom of learning
“When I was a boy of fourteen, my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished at how much he had learned in seven years.”
Mark Twain
Our Esteemed Panel• Eric Poole – Assistant Legislative Director, Florida
Association of Counties
• John Goodnight, P.E. – Executive Liaison, FACERS
• Rick Howard, P.E. – Public Works Director, Orlando
• Ramon Gavarette, P.E. – County Engineer, Highlands County
1 How do we currently fund our roads
How much actually gets to the road2
3
4
Panel Discussion
How do we fix funding and whenLet’s fix funding strategy
Cost of Deficient Infrastructure
We’re #19!We’re #19!
2013 U.S. Infrastructure Needs
Florida Department of Transportation
FLORIDA’S HIGHWAYS
• State Highway System (FDOT Maintained)– State Roads, US & Interstate Highways– 12,116 centerline miles– 6,783 bridges– 54% of all traffic
• Local Governments:– 107,674 centerline miles– 5,091 bridges
• Federal Government:– 2,315 centerline miles– 290 bridges
ASCE 2013 Report Card
How do we currently fund our roads?
Did you know?• “Every dollar invested in transportation
results in a return of $4.40 in benefits to Florida’s residents and businesses.”– FDOT, Macroeconomic analysis of Florida’s
Transportation Investments, January 2015
• “Every dollar spent at the top of the deterioration curve saves between $4 and $10 at the bottom.” Good roads cost money, bad roads cost more!
How are we funding roads?• Primarily we rely on fuel taxes although there are
other funding sources such as:– Motor vehicle license fees– Registration fees– Title fees– Rental Car surcharge– Documentary Stamp tax– Impact fees– Red Light Cameras– Sales tax
How are we funding roads?
How are we funding roads?
How are we funding roads?
State Transportation RevenueFiscal Year 2013-14
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
$ in
Mill
ions
Doc Stamps
Local Option
Rental Car
Aviation
Motor Vehicle Fees
SCETS Fuel
Fuel Tax
State Transportation Revenue
Actual through fiscal year 2014, 2015 through 2020 based on Spring 2015 Revenue Estimating Conference
How are we funding roads?
How are we funding roads?
Local Option Fuel Tax 1-6 cents approved by simple majority of
County Commission or vote of citizens 1-5 cents approved by super majority of
County Commission or vote of citizens “Ninth Cent” approved by super majority
of County Commission or vote of citizens Local Option Fuel Tax for each county
(Map shown on next page)
Local Option Sales Tax Charter County Transportation System Surtax –
approved by vote of citizens 31 counties are eligible to levy the surtax Duval, Walton, and Miami-Dade have enacted
Local Government Infrastructure Surtax All counties eligible to levy the surtax, 18 have
enacted Small County Surtax
31 counties eligible to levy the surtax, 29 have enacted
http://edr.state.fl.us/Content/ to find the Counties that have implemented the tax as of 2016
21
State Grants Small County Road Assistance Program (SCRAP)
Statute 339.2816 (30 counties qualify) Population of 75,000 and under “At a minimum small counties will be eligible only if the
county has enacted the maximum rate of the local option fuel tax authorized by s. 336.026 (1)(a) (6 max’d)
Small County Outreach Program (SCOP) Statute 339.2818 (37 counties qualify) Population of 150,000 and under Criteria include condition of the road…does the County
have a pavement management plan
22
How are we funding roads?
Local Government spending
How are we funding roads?
Locally Imposed Fuel TaxesDistributed to Local Governments
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
$ in
Mill
ions 9th Cent
Local Option
Actual through fiscal year 2014, 2015 through 2020 based on Spring 2015 Revenue Estimating Conference
How are we funding roads?
Construction inflationOver the same twenty year period that fuel efficiency improved 12% transportation costs grew by 60%!
So for every $1 fuel efficiency gains drained from gas tax funds, inflation drained $3.50
Impact of indexing fuel sales tax
Untapped Locally Imposed Fuel Taxes
$0
$50
$100
$150
$200
$250
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
$ in
Mill
ions
9th Cent
Local Option
Actual through fiscal year 2014, 2015 through 2020 based on Spring 2015 Revenue Estimating Conference
The top 15 counties account for over 87% of the total unutilized gas tax
That’s a bunch of money!
Top 15 Counties
Rank COUNTY TOTAL REVENUE RATE Total Unutilized $ Indexed Year 11 ORANGE 44,589,922.32$ 0.06$ 37,311,062.26$ 1,965,623.63$ 2 HILLSBOROUGH 46,120,215.15$ 0.05$ 27,972,510.99$ 1,778,225.43$ 3 DUVAL 32,594,893.82$ 0.06$ 25,541,669.41$ 1,395,277.52$ 4 DADE 107,673,694.57$ 0.02$ 19,694,412.26$ 3,056,834.56$ 5 PINELLAS 27,536,741.66$ 0.05$ 17,915,119.45$ 1,090,844.67$ 6 BREVARD 21,806,106.27$ 0.06$ 13,987,226.94$ 859,040.00$ 7 SEMINOLE 14,656,702.42$ 0.05$ 9,569,564.48$ 581,430.41$ 8 OSCEOLA 13,546,816.92$ 0.05$ 8,964,599.73$ 540,274.00$ 9 LAKE 10,222,347.36$ 0.05$ 6,509,982.57$ 401,575.92$
10 ST JOHNS 7,594,416.56$ 0.06$ 6,213,457.62$ 331,388.98$ 11 BAY 7,162,206.67$ 0.05$ 4,496,539.50$ 279,809.91$ 12 SANTA ROSA 4,591,567.25$ 0.06$ 3,927,029.26$ 204,446.32$ 13 INDIAN RIVER 4,900,567.64$ 0.06$ 3,775,783.18$ 208,232.42$ 14 CLAY 5,853,833.91$ 0.05$ 3,771,054.07$ 230,997.31$ 15 SUMTER 5,946,346.43$ 0.05$ 2,760,809.93$ 208,971.75$
354,796,378.94$ 192,410,821.64$ 13,132,972.81$
How much gets to the road?
Examples of where the $ goes• I didn’t even know this data existed• For each expenditure there are cost codes and these enable
the State of Florida to track expenditures by agency• These next slides are examples of what is available if you look• What I’ve learned is that some of the data is too broad for our
purposes• To start with we can find ways to drill down and get more
accurate data• For Counties the $ go into a Trust Fund but for municipalities
it appears to flow into the general fund, shouldn’t that change?
• Are there improvements we can make in tracking?
St. Johns Example FY 2013 Ninth Cent 1-6 Cent 1-5 Cent Combined Countywide Countywide Countywide Countywide Realized Realized Realized RealizedCounty Tax Revenues Tax Revenues Tax Revenues Tax RevenuesSt. Johns $ 209,119 $ 6,821,258 $ - $ 7,030,378
County Transportation TOTAL - All Expenditure Account CodesGovernment Total Per Capita % of Total Total Per Capita % of TotalSt. Johns $ 32,210,975 $ 159.82 8.2% $ 391,666,995 $ 1,943.36 100%
St. Johns County Unrealized Tax Revenue = $5,702,644
County 2015 resurfacing budget = $1,300,000
Annual resurfacing needs = $15,000,000Total Backlog = $500,000,000
Palm Beach Example FY 2013
County Transportation TOTAL - All Expenditure Account CodesGovernment Total Per Capita % of Total Total Per Capita % of TotalPalm Beach $ 254,198,112 $ 188.90 10.1% $ 2,505,898,432 $ 1,862.22 100%
Ninth Cent 1-6 Cent 1-5 Cent Combined Countywide Countywide Countywide Countywide Realized Realized Realized RealizedCounty Tax Revenues Tax Revenues Tax Revenues Tax RevenuesPalm Beach $ 5,705,854 $ 32,119,219 $ 23,992,986 $ 61,818,059
Palm Beach County 2015 resurfacing budget = $4,000,000
Annual resurfacing needs = $12,000,000Total Backlog = $?
Total going to mass transit?At 15% it would be $9,272,708.85
How much gets to the road?• Statewide we really don’t know• When I looked for the answer I found that the figures were too broad
to be sure• We don’t do a very good job of tracking expenditures• What I did find was this:
– Many agencies seem to have trouble funneling money down to the project level– Some agencies have depended on fuel taxes to fund operations (Statutory intent
ignored?)– The amount of asphalt use in the State has dropped dramatically (easiest way to
track since 97% of roads are asphalt) about 40% drop since 2006– Disconnect between statutory intent and practice– Huge unfunded needs that could be met with shift in either policy or attitudinal
shift, both– Many of the non-transportation budget items actually are dependent on quality
and safe infrastructure
Historical FDOT Asphalt Tonnages
Historical Florida Asphalt Tonnages
Florida Department of Transportation
Historical Statewide Performance
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
$ in
Mill
ions
Veterans Programs
SEED Transfers
Agriculture
DEP & GFC
Tourism & Trade
Admin Charges
GR Service Charges
GR Fund Transfers
Education
Transportation Revenue Used For Non-Transportation Purposes
Actual through fiscal year 2014, 2015 through 2020 based on Spring 2015 Revenue Estimating Conference
How do we fix it and when?
The answer should be now• Gas prices have dropped significantly in
the last year• Even in DC attitudes towards
increasing the gas tax have softened• Indexing is not the same as raising
taxes!• We have a window to act but need to
come up with a game plan
Gas Prices have dropped significantly
Several Counties are trying• Brevard County is currently attempting
to go after a ½ cent sales tax– Is that better than increased impact fees/gas
tax?
Go Hillsborough is under way
• The County is attempting to increase funding by implementing either a ½% or full 1% sales tax to fund transportation projects
• For some reason they feel it’s easier than increasing gas tax
• Gas tax is seen as broken already and some agencies are opting for sales tax as a more sustainable approach
Revenue Stream Challenge:The Future of Fuel Tax
Various market pressures are driving up average vehicular fuel efficiencies
Alternative fuels are exempt from fuel taxes (CNG) Corporate fuel economy standards for new cars
will increase from 35.5 MPG in 2016 to 54.5 MPG in 2025
The average driver will pay less for use of the roadway network in the future Fuel taxes paid decrease as fuel efficiency increases
The fuel tax will become a less sustainable and less equitable fee for road use
Graphing the bad news
Revenue Stream Challenge:The Future of Fuel Tax
Let’s fix funding strategy
Let’s break it down…• We hear all of the
time how opposed everyone is to increased taxes
• The common retort is that it just can’t be done because the public hates it
• Of course that’s more accurate when gas is $4/gallon
We need to get the public to rally around the effort!
Public Opinion
What’s the public perception of our roads?
Public Opinion
Public Opinion
Politics – Funding in Florida• Out of 67 Counties only 23 have zero unutilized
County-Imposed gas tax
• Using Hillsborough as an example with 3,318 centerline miles (7,700 lane miles) of paved road their $3M resurfacing budget puts them on a 148 year paving cycle
• That additional 5¢ would generate nearly $30M per year which would wipe out their funding shortfall
• Madison County has 242 centerline miles, industry standard is 20 year paving cycle meaning Madison County should be paving at least 12 miles per year expending $1,815,000
• Instead the County was operating with a 61 year paving cycle
• Madison County purchases a piece of equipment costing $46,851,200– This piece of equipment is vital to all
economic activity in the County– Other tax revenue would not exist
without this equipment– Not investing in upkeep costs every
taxpayer in the County (19,115) since every single taxpayer uses it
– If we let this piece of equipment completely deteriorate it, a new one could cost us as much as 10 times what we paid for it
Communicating with Stakeholders
Communicating with Stakeholders
Important to use everyday examples, analogies
Preventative Medicine is the model we want to shoot for
In infrastructure, the longer we wait the bigger the bill
When you brush your teeth, do you brush only the worst teeth
Why then would we only address the worst roads
Roads vs. AT&TAverage driver logs 12,000 miles per year @ 24 mpg
Average driver uses 500 gallons per year
In Hillsborough County they pay $0.50 per gallon
Average Driver pays $250/yr or just over $20 a month
The argument goes that an extra $0.05/gal or $2/month would anger the electorate
What can we do?• Admit we have a problem and define it
– As an industry and a community we should discuss the issue and begin to mobilize
• Engage elected officials and taxpayers– Continue the education process any way possible
whether that means engaging with legislators, writing editorials or having these panels (APWA, FAC Panel)
• Find partners and champions– We all know folks who can help, government
associations (FAC, League of Cities), private trade organizations (FES, FICE, FTBA, ASCE, ACAF) other public works organizations (APWA, FACERS)
• Craft a multi tier strategy that fits your agency and situation
What can we do?• Some fixes exist at the County level and will benefit the Cities
within the County– Let’s get all of the PWD’s together and game plan how to get the unutilized
gas tax money utilized
• Statutory fixes may also be required– Work with Tallahassee to index the fuel taxes that are distributed to local
governments
• Educate decision makers on the impact ill advised policy has on our roadway health– Hold panel discussions throughout the State– Are local agencies allocating fuel tax funding to operations? Hint: (not
supposed to!) – Does management know that not maxing out fuel taxes could cost
matching funds from FDOT?
What can we do?• Does raising gas taxes have any
discernable effect on retail gas prices?– Work to better understand pricing
mechanisms– Explain the effects of market forces such as
seasonality
Gas price heat map
What can we do?• Work with MPO’s on legislative priorities• For instance MetroPlan Orlando has been debating a
legislative priority that would:– Expand Charter County surtax for municipalities over 150K to
enact 1 cent sales tax; carry over from last year’s priorities; FL MPO AC did revenue study in 2013 and this was one of the items that came out of this study; local option sales tax – where it fails in the county it typically passes in the city; gives cities another tool
• Plan ahead, a lesson from Jim Stivender’s napkin:– Use the calendar to our advantage– Back into the off year election politics– If you look at when the gas tax goes into effect (January 2018) that
puts the vote on an off year election– Typically there will be less acrimony and more political cover with
an off year election
Success Story, Lake County!• Lake County voted overwhelmingly to
renew their Infrastructure Sales Tax– Voters this month passed the 20 year renewal
for the County’s Sales Tax– The vote margin likely means the Commission
will feel comfortable going after the remaining un-imposed gas tax
• Statutory fixes may also be required– Work with Tallahassee to index the fuel taxes
that are distributed to local governments
So what harm comes of asking? They might say yes…
But haven’t we failed before?• We’ve tried some of these approaches
before so how do we succeed this time? • We change the conversation, use our
recess voice and explain the true scope of the problem
• We recruit a champion before hand• Get creative with presenting our
material
The future is this?
SELF DRIVING CARS
Or this…
Or this!!!
Self Driving CarsImplementation will pick up steam between
2020 and 2030• In 2025 SDC will approach 12M with 4.8M self drive
only, nearly all cars will be self drive only by 2050
SDC requires good roadsHuge opportunity • Dependent on smooth pavements• Reduction in capacity requirements• Game changer in productivity,
healthcare etc.
Our Nation’s most valuable asset
“It was not our wealth that made our highways possible; rather it was our highways that made our wealth possible” Thomas MacDonald,
former U.S. Commissionerof Public Roads
We can have a bright future and insure one for future generations!
Chris Evers727-638-1699
Let’s fix funding!