Blue Ribbon Committee

onHighway Finance

Act 374 of 2009

Arkansas’ Public RoadArkansas’ Public RoadMileage and TravelMileage and Travel

(Year Ending 12-31-08)(Year Ending 12-31-08)

Mileage Daily Vehicle Miles Traveled(Percent of Total) (Percent of Total)

State Highways 16,428 68.2 million(16%) (77%)

County Roads 68,832 8.0 million(69%) (9%)

City Streets 14,551 12.7 million(15%) (14%)

Public Roads 99,811 88.9 million(100%) (100%)

Arkansas’ Primary Highway NetworkArkansas’ Primary Highway Network

47% of State Highway System Miles

89% of Vehicle Miles Traveled

Four-Lane Grid System Four-Lane Grid System

Arkansas’ Metropolitan AreasArkansas’ Metropolitan Areas

Jonesboro

West Memphis - Marion

Metroplan

Pine Bluff Texarkana

Fayetteville – Springdale – Rogers

Hot Springs

Bi-State

Gasoline *………………………………….. 21.5¢ per gallonDiesel *………………………………………. 22.5¢ per gallonLPG …………………………………………….. 16.5¢ per gallonAlternative Fuels (CNG)………………… 5.0¢ per gallonPassenger Vehicle Registration Fees……………… $17 to $30 per vehicle

(varies by vehicle type and size)

Truck Registration Fees……………………………… $39 to $1350 per vehicle

(varies by truck weight)

* Excludes 0.3¢ per gallon fee for Regulated Storage Tank Trust Fund. The amount of this fee fluctuates through administrative actions of the Arkansas Pollution Control and Ecology Commission.

State Highway User FeesState Highway User Fees

AHTD(70%)

Cities(15%)

Counties(15%)

• 3% to Central Services Fund3% to Central Services Fund

• Balance is 70/15/15Balance is 70/15/15

State Highway Revenue State Highway Revenue Distribution FormulaDistribution Formula

State Highway Revenue TurnbackState Highway Revenue Turnback

City TurnbackCity Turnback ($82 million in FY 2008) ($82 million in FY 2008)

• Distributed based on populationDistributed based on population

County Turnback County Turnback ($82 million in FY 2008)($82 million in FY 2008)

• 31.0% distributed based on land area31.0% distributed based on land area

• 13.5% distributed based on rural population13.5% distributed based on rural population

• 17.5% 17.5% distributed based on license feesbased on license fees

• 20.5% distributed evenly20.5% distributed evenly

• 17.5% distributed based on total population17.5% distributed based on total population

County Road ProgramCounty Road ProgramAnnual Funds AvailableAnnual Funds Available

Federal-aid Surface Transportation Program…..$5.9 millionFederal-aid Bridge Program……………………...$3.9 million State-aid County Road Funds……………….….$20.2 million (Act 445 of 1973 and Act 1028 of 1999)Highway Revenue Turnback…………………….$82.0 million

TOTAL ANNUAL FUNDS AVAILABLE……..$112.0 million  

City Street ProgramCity Street ProgramAnnual Funds AvailableAnnual Funds Available

Federal-aid Surface Transportation Program…..$4.0 millionFederal-aid Bridge Program……………………...$2.0 million State-aid City Street Funds……………….….…...$0.0 million (Act 982 of 1975)Highway Revenue Turnback…………………….$82.0 million

TOTAL ANNUAL FUNDS AVAILABLE…..…..$88.0 million  

Current Sources to AHTD, Cities, and Counties*Current Sources to AHTD, Cities, and Counties* TOTAL AHTD CITIES/COUNTIES

MOTOR FUELS REVENUEGasoline (21.5 ¢ per gallons) $293.3M $199.2M $42.7MDiesel (22.5 ¢ per gallons) $137.8M $93.6M $20.1MLPG (16.5 ¢ per gallon) / CNG (5.0 ¢ per gallon) $0.1M $0.1M $0.01M

MOTOR VEHICLE REGISTRATION FEESAutomobiles & Pickups $43.6 M $29.6M $6.3MHeavy Trucks (includes In-State and Out-of-State IRP Fees) $60.7M $41.2M $8.8MOther Vehicles $8.7M $5.9M $1.3M

MISCELLANEOUS REVENUES $41.2M $34.6M $2.9M

TOTAL CURRENT REVENUES $585.4M $404.2M $82.0M

Nature Gas Severance Tax $36.0M $23.2M $5.0M (projected for FY 2010)

TOTAL REVENUE INCLUDING PROJECTED SEVERANCE TAX $621.4M $427.4M $87.0M* Based on FY 2008 Receipts; Severance Tax projected to FY 2010

Federal Funds…………………………………………………………….…. $505 million

State Highway Funds…………………………………………………….…. $393 million

Total Federal and State Highway Funds…………………………….……. $898 million

Less Non-AHTD Federal Funds, Non-Construction Programs, and Federal Obligation Limitation…………....................... ($149 million)  Less State Funds for Fixed Expenditures and Match

for non-Construction Federal-aid………..…………..………………….. ($264 million) Less Federal and State Commitment for Interstate Rehabilitation Program Bond Debt…..……………………………………………………. ($74 million) 

Federal and State Funds Highway Construction….……………………… $411 million

Funds Specific to Categories (Little or No Commission Discretion)…………….………….…............... $144 million 

Highway Construction Funds Available For Commission Prioritization………………………….………………….. $267 million

It should be noted that the outcome of upcoming negotiations regarding the Federal Highway Trust Fund and its possible insolvency in 2010 could have a significant impact on the funds available for Highway Construction, including the possible rescission of authorized Federal-aid funds.

Average Annual Construction Funds Average Annual Construction Funds Available to AHTDAvailable to AHTD

Fiscal Years 2005 – 2009 (SAFETEA-LU)Fiscal Years 2005 – 2009 (SAFETEA-LU)

State General Revenues vs. State General Revenues vs. Gross State Highway RevenuesGross State Highway Revenues

Shrinking Highway DollarShrinking Highway Dollar

Consumption and Revenue TrendsConsumption and Revenue Trends

• Decrease of 2.7% for fuel consumption for State Decrease of 2.7% for fuel consumption for State Fiscal Year 2009 to date compared with State Fiscal Fiscal Year 2009 to date compared with State Fiscal Year 2008.Year 2008.

• Decrease of 3.3% in motor fuel tax revenue for Decrease of 3.3% in motor fuel tax revenue for State Fiscal Year 2009 to date compared to State State Fiscal Year 2009 to date compared to State Fiscal Year 2008.Fiscal Year 2008.

• Decrease of 1.5% in total highway revenues from Decrease of 1.5% in total highway revenues from State Fiscal Year 2009 to date compared to State State Fiscal Year 2009 to date compared to State Fiscal Year 2008.Fiscal Year 2008.

Ten-Year Highway NeedsTen-Year Highway Needs

Congestion Relief………………$3.7 billionMaintaining the System ….$10.9 billion

Arkansas’ Congressionally-Designated Arkansas’ Congressionally-Designated High Priority CorridorsHigh Priority Corridors

Future I-49

Highway 412

Highway 226

Corridor 1 – Highway 71Corridor 8 – Highway 412Corridor 18 – Interstate 69 and

Interstate 530 ExtensionCorridor 39 – Highway 63Corridor 52 – Parallel Highway 226Corridor 55 – Interstates 30 and 40 (Texarkana to West Memphis)Corridor 72 – Proposed Interstate 49

Interstate 40

Interstate 30

Future I-69

Corridor 1 – Highway 71Corridor 8 – Highway 412Corridor 18 – Interstate 69 and

Interstate 530 ExtensionCorridor 39 – Highway 63Corridor 52 – Highway 226Corridor 55 – Interstates 30 and 40 (Texarkana to West Memphis)Corridor 72 – Proposed Interstate 49

Future I-555

Economic Development ConnectorsEconomic Development Connectors

Total Cost for Highway Needs and Total Cost for Highway Needs and Other ImprovementsOther Improvements

Congestion Relief……...Congestion Relief……...………..……………………..…………… $3.7 billion$3.7 billionMaintaining the System ...Maintaining the System ...…..………….…..…………. $10.9 billion$10.9 billionCongressionally-DesignatedCongressionally-Designated High Priority CorridorsHigh Priority Corridors………..………..………..……….. $$7.5 billion7.5 billionEconomic Development Connectors….Economic Development Connectors…. $1.6 billion$1.6 billionTotal Needs and Total Needs and Other ImprovementsOther Improvements……..………….……..…………. $$23.7 billion23.7 billion

An additional $200 million An additional $200 million annually is needed over the annually is needed over the

next 10 yearsnext 10 yearsfor highway congestion,

pavement and bridge conditions, maintenance, administration and operations to remain at

current levels.

AASHTO Report on HighwaysAASHTO Report on Highways

Rough Roads Ahead: Fix Them Now or Pay For It Later

The additional driving cost in Arkansas due to rough roads

is $302/year/driver.

Every $1 spent now saves about $7 in future

maintenance.

Revenue Generated by:Revenue Generated by:

TOTAL AHTD CITIES/COUNTIES • Add’l 1¢ gasoline tax $14.1M $9.6M $2.1M• Add’l 1¢ diesel tax $6.6M $4.5M $1.0M• Add’l $10 reg. (cars and p’ups) $22.3 M $15.1M $3.2M• Add’l $150 reg. (In-State trucks) $12.7M $8.6M $1.8M• Add’l $150 reg. (hvy. trucks) $4.6M $3.1M $0.7M• Remove sales tax exemption

on motor fuels (gasoline and diesel) $233.3M $158.4M $33.9M• Transfer 4.5% sales tax on:

New vehicles $143.6M $97.5M $20.9M Used vehicles $90.7M $61.6M $13.2M Auto repair parts, services $186.3M $126.5M $27.1M Retail tire sales $14.5M $9.9M $2.1M

• $1 battery fee $0.6M $0.4M $0.1M• $1 tire fee $2.8M $1.9M $0.4M• Add’l 1% general sales tax $469.0M $318.4M $68.2M

Based on State Fiscal Year 2008 Revenue

Other Funding OptionsOther Funding Options• Development Impact Fee/Driveway Permit FeeDevelopment Impact Fee/Driveway Permit Fee• Logo SignsLogo Signs• Mileage Based Road User FeeMileage Based Road User Fee• Public/Private PartnershipsPublic/Private Partnerships• Regional Mobility AuthoritiesRegional Mobility Authorities• Revolving Loan for Advanced ConstructionRevolving Loan for Advanced Construction• State Sales TaxState Sales Tax• State Sales Tax on New/Used VehiclesState Sales Tax on New/Used Vehicles• State Sales Tax on New/Used Vehicle PartsState Sales Tax on New/Used Vehicle Parts• Tourism TaxTourism Tax• Transportation Improvement DistrictsTransportation Improvement Districts• Variable Motor Fuels and Motor Vehicle Taxes and Fees (Indexing)Variable Motor Fuels and Motor Vehicle Taxes and Fees (Indexing)• Bond FinancingBond Financing• Transportation Finance CorporationTransportation Finance Corporation• State Infrastructure Bank (SIB)State Infrastructure Bank (SIB)• Toll FacilitiesToll Facilities• Pass-Through TollsPass-Through Tolls

Innovative Financing StudyInnovative Financing Study

Council of State GovernmentsCouncil of State Governments

Blue Ribbon Committee

onHighway Finance

Act 374 of 2009