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Nypta fall 2010

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Nypta fall 2010

  1. 1. State Transportation Infrastructure Finance Context & Issues Uncertain Fiscal Future New York Public Transit Association Fall Conference and Trade Show November 19, 2010
  2. 2. “New York State currently lacks the revenue necessary to maintain its transportation system in a state-of-good-repair, and the State has no credible strategy for meeting future needs.” Lieutenant Governor Ravitch November 17, 2010
  3. 3. Session Discussion Topics  New York and the nation are at a crossroads in transportation  The current climate – FederalState budgets are driving force in future investment decisions – Congress is stalled and is not moving forward – The financial backbone of the surface transportation programs is all but broken – Administration is focused on climate change, livability and performance based planning  What is the Federal government’s role going to be in the future?  How will the State/nation best generate the required revenue for investment?
  4. 4. NYSDOT Capital Program Commitments/ Funding Shares
  5. 5. The Current Climate
  6. 6. The Current Climate  The bad news  The Administration and the Congress have not put a high priority on reauthorization  The Highway Trust Fund (and Stated Dedicated Fund) has all but gone broke – There is no support for increasing user fees – There are many competing goals at the national level  Difficult to develop multi-year plan at State level
  7. 7. Administration’s Direction  The long-term proposals postponed/Up front Investment of $50 billion  Some key features will likely include: – Livable communities – Major emphasis on transit – Congestion reduction – Passenger rail revitalization – Climate change – Performance based programming/planning (Discretionary?) – No user fee increases in the immediate future
  8. 8. The Congress  Facing difficult choices – The House of Representatives -Transportation and Infrastructure Committee - has developed a bill – The Senate counterpart (EPW, Banking, ET AL) has not taken action but started work – The Congress passed and extension through December 31st. – Funding is in critical condition  The road ahead is bumpy/no clear path forward
  9. 9. Mid-term Election Impacts  Results may have a significant and lasting impact on future surface transportation legislation/New York  New Congress will be more conservative/less likely to consider increase taxes and/or expenditures  Future of Oberstar’s proposed $500 billion program
  10. 10. House Transportation and Infrastructure Committee  Committee that will write next transportation bill in House  State may lose up to 4 of 5 seats on T&I (Bishop?)  Nadler Remaining member  Five (possibly six) new members of Congress. Encourage them to seek a seat on T&I  Congressman Mica (R-FL) expected to become next Chair – “…do more with less”
  11. 11. Senate Environment and Public Works Committee (EPW)  Writes highway title of the bill  Senate Democrat margin reduced  May result in reduced democratic committee slots  Senator Gillibrand - junior committee member – could lose EPW seat
  12. 12. Senate Banking, Housing and Urban Affairs  Writes transit title of the bill  Senator Dodd (D-CT) retired  Leadership will likely pass to Senator Johnson (D-SD) and Senator Shelby (R-AL) as ranking member  Shift to rural states may have further adverse implications for transit intensive states  Senator Schumer, however, remains second most senior Democrat
  13. 13. Declining Federal Share…
  14. 14. Steady Growth for New York Total $B $11.77 $13.79 $16.55 ISTEA TEA-21 SAFETEA-LU $6.20 $5.57 $10.07 $6.48 $8.49 $5.30 $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 $billions Transit Highways
  15. 15. NY’s Share Eroding Highways Transit ISTEA 92-97 5.63% 21.2% TEA-21 98-20 5.16% 19.7% SAFETEA-LU 04-09 4.63% 17.6%
  16. 16. “Equity” Bonus Rate of Return ISTEA 90.0 TEA-21 90.5 SAFETEA-LU – 2005 90.5 – 2006 90.5 – 2007 91.5 – 2008 92.0 – 2009 92.0
  17. 17. CT: $1.28 DE: $1.64 NJ:$0.92 RI: $2.18 MA: $0.92 CA $0.92 VT: $2.06 NH: $1.00 WA $0.92 OR $1.02 ID $1.44 NV $0.94 AZ $0.92 UT $0.94 NM $1.14 TX $0.92 MT $2.27 ND $2.07 SD $1.98WY $1.52 MN $0.92 OK $0.92 CO $0.92 NE $0.99 KS $0.96 IA $0.92 MO $0.98 AR $1.05 LA $0.95 WI $1.03 MI $0.92 IL $0.92 IN $0.92 OH $0.92 AK $5.27 FL $0.92 GA $0.92 SC $0.92 ME $0.96 NC $0.92 AL $1.07 MS $0.95 TN $0.92 KY $0.96 WV $1.69 NY $1.10 PA $1.13 VA $0.92 MD$0.92 DC$4.25 Donor/Donee Legend Donee Donor HI $1.75
  18. 18. Prospects of New York getting a larger share of federal funding… 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% $0 $500 $1,000 $1,500 $2,000 $2,500 $inmillions Year NYS Apportionments/Allocations NYS Percent Share/National Total
  19. 19. Message to Congressional Delegation  Transportation matters!  Need a “clean” long-term extension – Allows states to plan for larger projects – With new Congress – struggle to get better deal than current law
  20. 20. The Financial Backbone is All But Broken…
  21. 21. -$10.3 $41.9 $31.6 -15 -10 -5 0 5 10 15 0 5 10 15 20 25 30 35 40 45 50 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ($billions) Federal Highway Account of the Highway Trust Fund: Receiptsand Outlay Discrepancy Negative Annual Cash Flow Highway Account Outlays Highway Account Receipts *Excludes $8.017 billion transfer from General Fund to Highway Account of HTF in September 2008. **Excludes $7 billion transfer from General Fund to Highway Account of HTF in July 2009. Actual Estimated
  22. 22. Decline in Purchasing Power of Motor Fuel Taxes (Based on Inflation since 1993) 0 10 20 30 40 50 60 70 80 90 100 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year Percentage
  23. 23. NYS General Fund Transfers into the DHBTF $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 $inmillions
  24. 24. “Debt service for MTA and DOT by 2014 will be over $3.6 billion annually.” Mary Ann Crotty November 16, 2010 NYS Business Council
  25. 25. State Revenues Available for Infrastructure Investment $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 $inmillions Debt Service/DHBTF Revenue Debt Service Revenue Available for Investment
  26. 26. “Thus, State is, in effect, spending more than ever before on its transportation program but getting less.” Lieutenant Governor Ravitch November 17, 2010
  27. 27. Trust Fund Spending $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 $inmillions Debt Service Revenue Available for Investment General Fund Transfers
  28. 28. “New York’s recurring revenues to support its transportation related debt are not increasing at anywhere near the rate at which debt itself is increasing. As a result, the state confronts a crippling debt service crisis.” Lieutenant Governor Ravitch November 17, 2010
  29. 29. Low Hanging Fruit…
  30. 30. Revenue  The current federal/State system relies on fuel taxes  We have seen a marked decline in revenues  Two National Transportation Commissions/one Debt Commission have called for an increase in gas tax (short-term)  In the mid- to long-term, study the feasibility of alternatives, such as Vehicle Miles Traveled Fee
  31. 31. Deficit Reduction Commission  Report Released November 10  Recommended increasing gas tax by 15 cents/gallon  Gradual increase beginning in 2013  Revenue exclusive for transportation/not deficit reduction  Recommends change in budgetary treatment/mandatory spending  Relieve general fund transfers  Enough to support a six-year $450 billion bill
  32. 32. In The Interim…  Without longer-term action/infusion of funding – Short-term extensions limit opportunity to plan/make longer-term investment decisions – Uncertainty is increasing the costs for transportation-related projects – Jobs in the transportation sector will be lost without an infusion of funds and longer-term predictability
  33. 33. QUESTIONS ? Ron Epstein Chief Financial Officer New York State Department of Transportation 50 Wolf Road Albany, New York 12232 (518) 457-8362 repstein@dot.state.ny.us

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