Massachusetts Transportation Infrastructure Funding Gap: Revenue Alternatives - The Challenge and Potential Solutions

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1 Massachusetts Transportation Infrastructure Funding Gap: - The Challenge and Potential Solutions Paul T. Godfrey, PE Associate Vice President, HNTB 1

2 Why are we considering this?? Federal and State Transportation Funding in critical condition No support for increasing federal/ state gas tax Nationally, only meeting about 1/3 of required funding to maintain and improve the transportation system State DOT s believe they must solve the problem themselves 2

3 3 Source: AASHTO

4 Massachusetts Motor Fuel Tax s: ( in millions of $$) Alternative Actuals Forecasts FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY Source: BHI Massachusetts Tax Forecasts

5 Potential Solutions Tolling Interstate Highways Mileage Based Fee 5

6 Tolling Interstate Highways Massachusetts Opportunities under FHWA s Interstate System Reconstruction and Rehabilitation Pilot Program 6

7 FHWA Tolling and Pricing Programs Available under Title 23 of U.S. Code following enactment of SAFETEA-LU in 2005 Current programs available Value Pricing Pilot Express Lanes Demonstration Program HOV Facilities Interstate System Reconstruction and Rehabilitation Pilot Program Interstate System Construction Toll Pilot Program 7

8 FHWA Tolling and Pricing Programs Available under Title 23 of U.S. Code following enactment of SAFETEA-LU in 2005 Current programs available Value Pricing Pilot Express Lanes Demonstration Program HOV Facilities Interstate System Reconstruction and Rehabilitation Pilot Program Interstate System Construction Toll Pilot Program 8

9 Interstate System Reconstruction and Rehabilitation Pilot Program Program to allow funding of up to three interstate facilities (highway, bridge or tunnel) Tolls used to fund needed reconstruction or rehabilitation 9 Must be in different states (1 project/state) States must clearly demonstrate need Two of three slots have been reserved: Virginia: I-95 (previously I-81) Missouri: I-70 (no state authority to implement tolling)

10 Opportunities in Massachusetts Several non-tolled interstates: I-93 I-95 I-495 I-91 Massachusetts has enabling legislation for tolling MassDOT currently tolls Massachusetts Turnpike and Harbor Bridges/Tunnels 10

11 Challenges to Implementing 11 Public/Political Double taxing Diversion Interstate Commerce Social Inequity Clearly demonstrate need to FHWA: Funding shortfall Demonstration of need Facility Management Plan Ability to toll

12 Mileage Based Fee using Vehicle Miles Traveled (VMT) 12

13 Mileage Fee Concept State Transportation funds come primarily from fuel tax revenues Historically, gas tax has worked well nationally and locally However, fuel tax revenues are in decline: Higher Fuel Efficiency More alternate fuel vehicles Economic conditions Indexing does not keep pace 13

14 Mileage Fee Levels the Fuel Tax Playing Field Based on miles driven, not fuel used More equitable meaning that all users can pay the same per mile rate Other pricing options can be considered: Specific Area/Road Pricing Weight Air emissions 14

15 State of Oregon Pilot Program Established by Oregon Legislature to evaluate alternatives to replace fuel tax 28 different alternatives identified Program evaluated two strategies: Replace fuel tax with mileage-based fee collected at fueling stations Using mileage based fee to assess congestion charges 12 month pilot program conducted 15

16 How it works 16 Source: TransportLine, December 2007

17 Results of Pilot Program The concept is viable Paying at the pump works Can be phased over time Can be integrated with current system Other pricing options are viable 17

18 Challenges to Implementing Predictability Dispelling Privacy Concerns Public Education and Outreach State/National standards Fuel retailer coordination Automaker coordination Multi-state integration issues 18

19 Conclusion Real opportunities available for Massachusetts Tolling provides opportunity for new transportation revenues Mileage based fees provide opportunity for more consistent transportation funding stream Implementation can be near term 19