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Michigan Transportation Funding Task Force Schoolcraft College Livonia, Michigan May 19, 2008

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Page 1: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Michigan Transportation Funding Task Force

Schoolcraft CollegeLivonia, Michigan

May 19, 2008

Page 2: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Welcome and Introductions

Dennis Gillow, Co-Chairman

Page 3: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Michigan Transportation Funding Task Force (TF2)

Approval of April 21 MinutesApproval of Today’s Agenda

Page 4: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Public Comment

Page 5: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Report from the CAC

Gretchen Driskell, CAC Chairperson

Page 6: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

CAC ReportFour subcommittees continue meeting

Aviation, Highway, Road and Bridge, Intermodal Passenger, Intermodal Freight

Hearing presentations, gathering data from variety of transportation interestsAnalyzing needs under alternate scenarios

Good, better, best

On track to deliver reports to TF2 in July

Page 7: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Michigan Laborers' District Council

Jonathan ByrdLegislative Representative

Michigan Laborers' District Council

Page 8: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Southeast MichiganCouncil of Governments

Carmine PalomboDirector, Transportation Programs

Page 9: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

National Surface Transportation Policy & Revenue Study Commission

Frank BusalacchiNSTPRSC Commissioner

Secretary, Wisconsin DOT

Page 10: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Current Events

Proposed Federal Gas-tax HolidayComments from Other National FiguresProposed State Sales-tax Holiday on gasoline purchases only Proposed State Legislation

Page 11: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Discussion

Page 12: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Trends Impacting Transportation Funding

Susan P. MortelDirector, Bureau of Transportation

Planning, MDOT

Page 13: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Trends Impacting Transportation Funding

DemographicEconomicTravelSystem PerformanceGlobal Climate ChangeRevenue & Cost Trends

Page 14: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

How Demographic Trends May Impact Transportation Funding

Number of people impacts number of tax payers, drivers, riders, flyersPopulation density has implications for aero & transit effectiveness, cost efficiencyWill an aging population have different transportation needs?Will a longer-working population stretch out peak highway travel hours?

Page 15: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Correlation between Population and Travel

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

CA

TX NY

FL IL PA

OH

MI

NJ

GA

NC

VA

MA

IN

VMT

(in m

illio

ns)

05

101520

2530

3540

2000

Pop

. (in

mill

ions

)

VMT (in millions) 2000 Pop (in millions) Source: 2000 census, FHWA statistics 2006

Page 16: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

MARQUETTE

GRAND RAPIDS

DETROIT

Source: MDOT

% Change Pop. Decline 0 % to 10 % 10 % to 25 % 25 % to 38 %    56 %

Projected Population Change by 2030

Source: MI Transportation Plan

Page 17: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

MARQUETTE

GRAND RAPIDS

DETROIT

Source: MDOT

% Change Pop. Decline 5 % to 20 % 20 % to 40 % 40 % to 70 % 70 % to 100 % 100 % to 180 %   229 %

65+ Population Change by

2030

Source: MI Transportation Plan

Page 18: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

MI Population growth vs US, 2030

Michigan 7.6%

increase

-40.0

-20.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

NV TX WI IN MICHIGANNY

perc

ent

Source: 2000 US Census, MI Transportation Plan, 2007 REMI update to US Census data

Page 19: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Change in Population Age 65+ by 2030

Michigan 70%

increase

-50

0

50

100

150

200

250

300

NV AZFL TX MNWI

MICHIGANIN IL NYOH PAD.C.

perc

ent

Source: 2000 US Census, MI Transportation Plan, 2007 REMI update to US Census data

Page 20: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Projected Michigan Population, 2030

Projected Population by Age Group

0

2

4

6

8

school agechildren

workingpopulation

Seniors (65+)

in m

illio

ns

2000 2005 2010 2015 2020 2025 2030 2035Source: 2007 Remi update to 2000 census data

Page 21: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Discussion

Page 22: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

How Economic Trends May Impact Transportation Funding

Businesses rely on transportationTransportation is one factor in business location decisions & where they buy servicesVibrant service sector means more trucks, more dispersed; do they pay their share?Service sector may need improved air serviceDecrease in manufacturing means fewer very heavy trucksGlobal economy impacts border crossings

Page 23: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

World Economic Growth Slowing

0

1

2

3

4

5

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

(Percent change, real GDP)

Source: Robert West, Managing Director, Global Trade & Transportation, Global Insight

Page 24: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

National Economic Trends Mixed

Good NewsService sector strong & productiveInfrastructure & durable goods spending better than expected last yearStrong export performanceRapid acceleration of technological innovationGlobalization

Bad NewsRising interest ratesRising fuel costsDecline in housing marketRising food costsDrops in consumer spending/confidenceProgressively weaker $ InflationPossible recession

Page 25: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Michigan in Economic TransitionGood News

Typically ranks 2nd or 3rd in R & DRanks 4th in high tech manufacturingHealth care, education projected to growAgriculture seeing record high returnsInternational gateway still going strong

Bad NewsDecline of over 270,000 manufacturing jobs from 1999 to 2007 overshadows every successTourism travel relatively flatHousing sales as bad here as elsewhere

Page 26: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Transportation and Economic Trends in Michigan

0

50

100

150

200

250

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

Percentage of 1990 Value

Vehicle Miles TraveledCommercial VMTGross State Product

Source: MI Transportation Plan, US Dept. of Commerce, MDOT

Page 27: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Raw MaterialProducer / Shipper

ManufacturerReceiver / Shipper

3rd Party Logistics (3PL)Provider or Freight

Forwarder

Warehouse / Dist. CenterReceiver / Shipper

3PL or Freight Forwarder

Retail StoreReceiver

Consumers

Carriers

Carriers

Carriers

Raw MaterialProducer / Shipper

ManufacturerReceiver / Shipper

3rd Party Logistics (3PL)Provider or Freight

Forwarder

Warehouse / Dist. CenterReceiver / Shipper

3PL or Freight Forwarder

Retail StoreReceiver

Consumers

Carriers

Carriers

Carriers

Illustrative Supply Chain Network

Page 28: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Transportation Requirements by Industry

$0.00

$0.01

$0.02

$0.03

$0.04

$0.05

$0.06

$0.07

$0.08

$0.09

Agriculture,Forestry andFisheries

Construction Wholesale &Retail Trade

Mining Manufacturing Services Communicationsand Utilities

Other Finance,Insurance & Real

EstateIndustry Groups

Amount spent for $1 output (in dollars)

Pipelines, Freight Forwarders & Related Services

Water

Air

Railroad & Passenger Ground

Motor Freight and Warehousing

In‐House (Mostly Vehicles)

Source: MI Transportation Plan

Page 29: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Logistics Trends

Accounted for 9.95% of US GDP in 200522.3% in China, 17% in India7.15% in Europe

US transportation costs risingRail expenditures up 12% in 2006Truck tonnage down 1.3% in 2006Air freight up 7.6% in 2006, not as sharp as the 17% increase in 2005

Source: Supply Chain Digest, June 2007

Page 30: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Michigan Freight ForecastFor shipments to, from and within the state

0200400600800

10001200

1998 2010 2020

tons

(in

milli

ons)

Highway Rail WaterSource: FHWA state by state freight analysis

Page 31: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

State to State Flows(Tons)

25,001 - 100,000100,001 - 250,000250,001 - 500,000

0 - 25,000

More than 500,000Office of Freight Management and OperationsOperations Core Business Unit

Federal Highway AdministrationU.S. Department of Transportation

(Tons)Network Flows

Total International Truck Flows(1998)

MICHIGAN

C A N A D A

M E X I C O

Atlantic Ocean

Pacific Ocean

Gulf of Mexico

0 to 250,000

250,001 to 1,000,0001,000,001 to 5,000,000More than 5,000,000

USDOT Bureau of Transportation Statistics Transborder Freight Data Website

Page 32: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Impact of International Truck Flows on Michigan’s Highway Network

Source: National Roadside Survey

Page 33: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Cross-Border Commerce

Passenger traffic generates millions $ for local & regional economies16.8 million passenger cars in 2006

25% work-related5-10% of Detroit nurses & med-techs live in Ontario, Canada

40% dining, entertainment & casinos12% shopping

Page 34: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Autos Crossing the Border

01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,000

10,000,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Y e a r

Ambassador Bridge Detroit Windsor TunnelBlue Water Bridge International Bridge

Source: Bridge and Tunnel Operators Association (BTOA) annual figures AND Public Border Operators Association (PBOA) annual figures (PBOA replaced BTOA)

Page 35: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Trucks Crossing the Border

0500,000

1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Ambassador Bridge Detroit Windsor Tunnel

Blue Water Bridge International Bridge

Source: Bridge and Tunnel Operators Association (BTOA) annual figures AND Public Border Operators Association (PBOA) annual figures (PBOA replaced BTOA)

Page 36: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Trains Crossing the Border

-

2,000

4,000

6,000

8,000

10,000

12,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Num

ber o

f Tra

ins

Detroit Port Huron Sault Ste MarieSource: Bureau of Transportation Statistics (BTS) Research and Innovative Technology Administration (RITA)

Page 37: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

World-wide commercial passenger traffic is expected to increase from 4.4 billion to 9.0 billion between 2007 and 2025, per FAA

In the same period, world air cargo traffic is expected to triple

Nearly 40% of the value of world trade now goes by air (versus under 2% by weight)

Air Commerce Trends

*Source: US Department of Transportation, from FAA Aerospace Forecasts: Fiscal Years 2007-2020, Table 5.

Page 38: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Air Freight ForecastShipments to, from and within Michigan

012345

1998 2010 2020

tons

(in

milli

ons)

0100200300400500600

valu

e (in

billi

ons)

tons valueSource: FHWA state by state freight analysis

Page 39: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Discussion

Page 40: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

How Travel Trends May Impact Transportation Funding

All modes rely on user fees generated by auto and truck travel

Will increasing gas prices reduce auto travel?Will increased price of gas make people more likely to try alternative fuel vehicles?

Air travel also generates user feesWill fewer drivers mean more carpoolers, transit riders, or cyclists seeking an alternative to autos?

Page 41: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Average Trend of Michigan Gas Prices 2003-2007

Monthly Average Gas Prices(Source AAA of Michigan)

1.00

1.50

2.00

2.50

3.00

3.50

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

Avg

Mon

thly

Gas

Pric

e

2003 2004 2005 2006 2007Source: MDOT

Page 42: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Moving 12-Month Total on ALL Roads

1,4001,4501,5001,5501,6001,6501,7001,7501,8001,8501,9001,9502,0002,0502,1002,1502,2002,2502,3002,3502,4002,4502,5002,5502,6002,6502,7002,7502,8002,8502,9002,9503,0003,0503,100

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

YEAR

Ann

ual V

ehicle-D

ista

nce Tr

aveled

(Billio

n M

iles)

Source: FHWA

Page 43: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Annual Vehicle Miles of Travel State Trunkline Only

40

45

50

55

1995 1997 1999 2001 2003 2005

Billi

ons

Source: HPMS

Page 44: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

National Trend: GA Fleet Activity

0

50,000

100,000

150,000

200,000

250,000

1970 1980 1990 1992 1994 1996 1998 2000 2002 2004Source: MDOT Bureau of Aeronautics

Page 45: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Aircraft Operations at Towered Airports

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1997 1999 2001 2003 2005 2007

Source: Air traffic control tower records

Page 46: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

National Airline Fleet Evolution

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1970

1975

1980

1985

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Total Aircraft 2 Engine 3 Engine 4 EngineSource: MDOT Bureau of Aeronautics

Page 47: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Airline trends affecting Michigan

Mergers and bankruptciesMicromanaging Aircraft Fuel Consumption

Reducing Cruising SpeedsTaxiing with Single Engine Running

Fleets evolvingGeneral trend toward twin engine aircraftEngine efficiency gains

Page 48: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Michigan Airline Passengers

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,00019

96

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Source: MDOT Bureau of Aeronautics

Page 49: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Discussion

Page 50: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

How System Performance May Impact Transportation Funding

Convenience, connectivity, safety and on-time performance impact rail, bus and air travelSome people will not travel at peak times, or will avoid congested routesSome people will pay to avoid highway congestion

Page 51: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Safety: General Aviation Accidents in Michigan

05

101520253035404550

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Total GA Accidents Fatal GA Accidents

Source: NTSB

Page 52: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Highway Crash Trend

0

100,000

200,000

300,000

400,000

1999 2000 2001 2002 2003 2004 2005 2006

Source: Michigan State Police

Page 53: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Rail Safety TrendCrashes at Public At-Grade RR Crossings

020406080

100120

2003 2004 2005 2006 2007

NO. OF FATALITIES NO. OF INJURED PROPERTY DAMAGE ONLY

Source: MDOT DRoads database

Page 54: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Congestion in Metro AreasAnnual Hours of Delay per Traveler

0

10

20

30

40

50

60

1982 1995 2005

Detroit Grand Rapids

Source: The 2007 Urban Mobility Report: Texas Transportation Institute

Page 55: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

What Does Congestion Cost?

$138 million$2.2 billionTotal Costs per year

$2.23/gallonAverage Cost of Gasoline

4,404,00076,062,000Excess Fuel Consumed

$14.60 per person/hour$77.10 per hour of truck time

Value of Time

7,593,000115,547,000Hours of Travel Delay

Grand RapidsDetroit

Source: The 2007 Urban Mobility Report: Texas Transportation Institute

Based on Estimated 2005 Data

Page 56: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

90,000,000

100,000,000

1995 2000 2005 2007Year

Vehi

cle

Hou

rs, P

asse

nger

s, a

nd M

iles

Vehicle Hours Passengers Miles

Local Public Transit Statistics *

* As self-reported to MDOT

Page 57: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

1995 2000 2005 2007

Year

Rid

ersh

ip, M

iles,

Cos

t, an

d R

even

ue

Ridership Miles Cost Revenue

Intercity Bus Contract Service Statistics

Source: MDOT

Page 58: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Passenger Rail Ridership1995-2007

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year

Rid

ersh

ip

Detroit-Chicago Port Huron-Chicago Grand Rapids-Chicago

Page 59: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Passenger Rail Contract Service Statistics

-500,000

500,000

1,500,000

2,500,000

3,500,000

4,500,000

5,500,000

6,500,000

7,500,000

1995 2000 2005 2007Year

Rid

ersh

ip, C

ost,

and

Rev

enue

Ridership Cost RevenueSource: MDOT

Page 60: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Discussion

Page 61: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

How Global Climate Change May Impact Transportation Funding

A critical mass of people are talking about making changes to address climate changeTransportation is expected to be the largest contributor to carbon emissions in Michigan by 2020Financial incentives/disincentives are often used to motivate public change

Page 62: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Climate Change Projections, 2100

Source: EPA’s web site on climate change

Page 63: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

December 12, 2007 Source: www.miclimatechange.us

Michigan Emissions GrowthMillion Metric tons of CO2 equivalent basis (MMtCO2e)

-10 -5 0 5 10 15

Electricity (Consumption Based)

Res/Comm Fuel Use

Industrial Fuel Use

Fossil Fuel Industry

Transportation

ODS Substitutes (HFCs)

Other Ind. Process

Agriculture

Waste Management

MMtCO2e

1990 - 20052005 - 2020

Page 64: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

December 12, 2007 Source: www.miclimatechange.us 64

Transportation & CO2 Emissions

0

10

20

30

40

50

60

70

80

1990 1995 2000 2005 2010 2015 2020

Year

MM

tCO 2

e

Onroad Gasoline Onroad DieselJet Fuel/Av. Gas Boats and Ships - Ports/InshoreRail Other

Page 65: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Discussion

Page 66: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Revenue & Cost Trends

Is federal funding going to continue at current levels?How will revenue be effected by increased gas prices?How will costs be effected?How are other budget pressures effecting transportation revenue?

Page 67: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Michigan’s Rate of Return on Federal Highway Taxes

70%

75%

80%

85%

90%

95%

100%

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Historical Rate of Return 1956-2006 84%

Source: MDOT

Page 68: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

10 Year Federal Revenue Trend (millions)

$0

$200

$400

$600

$800

$1,000

$1,200

Comprehensive TransportationFund

$13.2 $18.6 $18.0 $32.0 $27.8 $25.5 $29.7 $20.5 $24.9 $26.2

Aeronautics $47.6 $51.1 $58.5 $86.6 $106.1 $75.0 $107.2 $123.8 $117.4 $112.7

State Trunkline Fund $515.8 $544.5 $754.7 $686.4 $616.5 $574.4 $616.6 $805.3 $808.4 $889.9

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: MDOT AFR

Page 69: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Federal Funds Compared Among Modes

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

$0

$5

$10

$15

$20

$25

$30

$35

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

$0

$20

$40

$60

$80

$100

$120

$140

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Transit

AviationHighways

Source: MDOT

Page 70: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Highway Trust FundHighway Account Year End Balance

-$5

$0

$5

$10

$15

$20

$25

1983

1985

1987

1992

1994

1997

1999

2001

2003

2005

2007

2009

Bill

ions

Source: MDOT

Page 71: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Major Issues for Reauthorization

Highway Trust Fund StabilityDespite continued modest growth in revenue, spending continues to exceed incomeLarge cash balances are gone

Congestion130% increase in VMT over next 50 yearsFreight doubles in half the time (by 2035)

Climate ChangeRising CostsAging Infrastructure

Page 72: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

32.4%

21.0% 20.0%

29.0%

12.2%

0%5%

10%15%20%25%30%35%40%

% in

crea

se F

Y 20

02-0

6

Hot MixAsphalt

Concrete Subbase AggregateBase

CPI

Source: CPI, U.S. Bureau of Labor Statistics, Construction Costs, MDOT

Rising Costs

Significant Increase in Construction Costs

Page 73: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Aging Infrastructure

0200400600800

1,0001,2001,4001,6001,800

pre 1

920's

1920

's

1930

's

1940

's

1950

's

1960

's

1970

's

1980

's

1990

's

2000

's

Built Reconstructed

MDOT Bridges by Decade

Source: NBI

Page 74: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Gasoline Gallons Sold Compared with MTF Gasoline Revenue

$700

$750

$800

$850

$900

$950

$1,000

2004 2005 2006 2007*

Year

Rev

enue

In M

illio

ns

3,000,000,000

3,500,000,000

4,000,000,000

4,500,000,000

5,000,000,000

5,500,000,000

Gal

lons

Sol

d

Gas Revenue Reported by Dept. of Treasury Gasoline Gallons Sold

’04 to’05-$10M

’05 to ‘06-$16M

’06 to ’07-$16M

’04 to ’07Decrease

-$42Mor 4.5%

Source: MDOT

Page 75: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Registration Fees changed to value based in 1982

Mix of Fuel Taxes and Registration Fees in MTF

30%

35%

40%

45%

50%

55%

60%

65%

70%

Fuel Tax 65% 65% 57% 54% 55% 53% 50% 47% 44%Registration 33% 34% 42% 43% 45% 47% 49% 52% 56%

1982 1987 1992 1997 2002 2007 2012 2017 2022

Source: MDOT

Page 76: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Decline in Purchasing Power

6

9

12

15

18

Cen

ts p

er G

allo

n

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Actual Purchasing Power of the State Gas Tax has declined by 22.6% since 1998

19¢

12.98¢

Actual Projected

14.7¢

Source: MDOT

Page 77: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Aviation and Motor Fuel Tax Rates

$0.000$0.015$0.030$0.045$0.060$0.075$0.090$0.105$0.120$0.135$0.150$0.165$0.180$0.195$0.210$0.225$0.240$0.255$0.270$0.285$0.300$0.315$0.330$0.345$0.360$0.375

1925

1929

1933

1937

1941

1945

1949

1953

1957

1961

1965

1969

1973

1977

1981

1985

1989

1993

1997

2001

2005

2008

Year

Rat

e pe

r Gal

lon

Auto GasolineDieselAviationAviation (Interstate Airlines)Inflation

Source: MDOT

Page 78: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Aviation Fuel Tax Per Gallon

1929 1968 2007

Total Price: 21¢ per gallon Total Price: 40¢ per gallon Total Price: $4.50 per gallonTax Rate: 3¢ per gallon Tax Rate: 3¢ per gallon Tax Rate: 3¢ per gallonTax: 14% of cost per gallon Tax: 7.5% of cost per gallon Tax: .7% of cost per gallon

Source: MDOT

Page 79: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Local Public TransitState Operating Assistance Distribution Rates

0%10%20%30%40%50%60%70%

1998 2000 2005 2007

Urban Nonurban

Source: MDOT

Page 80: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Local Public Transit Expense by Category

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

1995 2000 2005 2007

Wage &Fringe

Other

Insurance

Fuel

StateReimbursedExpenses

Source: MDOT

Page 81: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Local Public Transit Fuel Expenses

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

1995 2000 2005 2007$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

Fuel Expenses Fuel Cost per GallonSource: MDOT

Page 82: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Benchmark: 2005 State Transit Funding Per Capita

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

$180.00

$200.00

Mas

sach

uset

tsM

aryl

and

New

 Yo

rkN

ew J

erse

yA

lask

aD

elaw

are

Penn

sylv

ania

Conn

ecti

cut

Min

neso

taCa

lifo

rnia

Illin

ois

Rho

de Is

land

Virg

inia

Wis

cons

inM

ichi

gan

No

rth 

Caro

lina

Verm

ont

Flo

rida

Ore

gon

Indi

ana

Wyo

min

gTe

nnes

see

Was

hing

ton

No

rth 

Dak

ota

Iow

aA

rizo

naSo

uth 

Dak

ota

Kan

sas

Ohi

oN

ew M

exic

oSo

uth 

Caro

lina

Texa

sW

est 

Virg

inia

Mai

neM

isso

uri

Loui

sian

aA

rkan

sas

Okl

aho

ma

Geo

rgia

Neb

rask

aM

ont

ana

Ken

tuck

yM

issi

ssip

piId

aho

New

 Ham

pshi

reN

evad

aCo

lora

doU

tah

Ala

bam

aH

awai

i

Michigan, $19.28

7th in the nation in dollar amount of annual operating assistance

Higher per capita assistance levels  found with extensive metropolitan transit systems (light rail/commuter rail). 

15th in total state transit funding per capita

Source: 2005 Survey of State Funding for Public Transportation, AASHTO, APTA, and USDOT

Page 83: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Comprehensive Transportation FundState Revenue

$0

$50

$100

$150

$200

$250

$300

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

MTF Distribution Sales Tax Other

Actual Forecasted

In m

illio

ns

Source: MDOT

Page 84: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Transit Funding: Federal Revenue

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Transit Planning Rural Intercity Transit

Actual Forecasted

In m

illio

ns

Source: MDOT

Page 85: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Impact of CTF Revenue Trends on Transit

Stagnant state transit revenues MDOT’s contribution to preservation of existing service is decreasingNo CTF revenues for expansion

State's Share of Maintaining Local Transit Services is DecreasingAbility to continue to match federal funds is uncertain

Page 86: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Impact of CTF Revenue Trends on Rail Freight

Freight program revenues down 40% since 2000

MDOT Capital projects on state-owned rail lines have been deferredLimited funds for potential applicants to Freight Economic Development Program

Page 87: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Discussion

Page 88: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

EfficienciesLane Miles Under Jurisdiction/# of Employees

1.5

2.3

2.9

2.6

3.3 3.3 3.3

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

New York Pennsylvania Indiana Illinois Michigan Ohio Minnesota

STATE

LA

NE

MIL

ES

PE

R E

MP

LO

YE

E

Source: MDOT

Page 89: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Potential Future Efficiencies

New partnershipsRegionalizationOthers?

Page 90: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

New Partnerships

VehiclesVehicles

InfrastructureInfrastructure InfoStructureInfoStructure

Telematic

sDriv

ing &

Tr

affic

Traffic Operations

Automotive Industry

- Electronic signing- Highway design- Advanced power- Security & reliability- Crash avoidance

- Incident ID & response- CMS & detour signing- Traffic & road database

State of

MI Teleco

m

Industry

DRIVER

Safety & Mobility

- Traffic information- Tracking and routing- Crash & safety notification- Safe driver interface- Remote diagnostics

Page 91: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Regionalization

Southeastern Michigan Snow and Ice Management Project (SEMSIM)

Page 92: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Discussion

Are there others?

Page 93: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Next meeting

Other States Revenue StudiesFunding AlternativesSuggestions?

Page 94: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Other Business

Page 95: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

Public Comment

Page 96: Michigan Transportation Funding Task Force · Forestry and Fisheries Construction Wholesale & Retail Trade Mining Manufacturing Services Communications and Utilities Other Finance,

See you in June!

June 30, 9 a.m. to 4 p.m.MDOT Aeronautics Auditorium

Lansing, Michigan