a guide to transportation funding options available to virginia … · 2019-06-05 · a guide to...
TRANSCRIPT
A Guide to Transportation Funding
Options Available to Virginia
Jurisdictions
Audrey Moruza
Senior Research Scientist
June 5, 2019
2012 Project Task
Report all tools and strategies available
to local jurisdictions in the
Commonwealth to accumulate revenue
for local transportation projects,
excluding debt instruments.
2
3
VDOT
V I R G I N I A G E N E R AL
AS S E M B LY
Finding a Starting Point
• (Former) VDOT Programming Division: “VDOT does not track
jurisdiction funding sources”
• SYIP by active fund: identified districts with Revenue Sharing
projects
• Weldon Cooper Road, Street, and Highway Finance Survey on LAD
site; investigated responses
• Jurisdictions reporting “special assessments” for transportation
purposes on Weldon Cooper survey: contacted all
• Weldon Cooper Center’s Local Tax Rates, Jurisdiction Budgets,
CIPs, and TIPs; mined for information and contacts
4
Complications
• 2012 – report launched, MAP-21 implemented at end of CY
• 2013 – HB 2313 passed by General Assembly
• 2014 –State highway funding allocation changed to SMART SCALE
on graduated roll-out; Title 32 recodification; report scope
broadened to include Revenue Sharing program and LAD as
customer
• 2015 – FAST Act implemented, Virginia program revisions
• 2016 – Weldon Cooper Center’s Local Tax Rates is now distributed
by LexisNexis: $125
• 2012 through 2016 — Programs revised, renamed
5
Results - Categories
• Competitive grants
• “Competitive Entitlements”
• Entitlements
• Business licenses for natural resource extraction
• Institutional collaborations
• Land development charges
• Self-funding infrastructure
• Other sources
6
Competitive Grants
1. Revenue Sharing grants from VDOT (2006)
Program monies halved in 2018 to 100m; possibly a floor rather than a
ceiling (CTB, Dec. 2018)
7
0
20
40
60
80
100
120
140
160
180
200
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Millio
n $
State Revenue Sharing Funds in Final Budget
Competitive Grants
2. VDOT Access Road Program grants
• Economic Development, Airport Access, Recreational
Access
• Direct grants to local governments for eligible projects
• Regular (shovel-ready) or bonded (lacking enterprise
partner) grants, Major Employment and Investment (MEI)
grants
3. Appalachian Regional Commission
• Local Access Roads (ADHS Act of 1965)
• Geographical eligibility (Appalachia)
• Locality + PDC submit proposal to VDHCD
8
Competitive Grants
Appalachian Virginia: 25 counties, 8 independent cities
9
ARC Local Access Roads • U.S. Congress has limited LAR
total to 1400 miles (by 2016: 1,011.17 mi)
• > 100 mi: MS (>200 mi), AL, PA, SC
• > 50 mi: OH, TN • < 50 mi: GA, VA, WV, NC, MD,
KY, NY (<10 mi) • VA has ~ 37.5 mi
Competitive Grants
4. Transportation Partnership Opportunity Fund (2005)
• Grants up to $5m, loans up to $30m
• For transportation needs of economic development opportunities
attractive to private investment
• Road, rail, mass transit, space travel (Mid-Atlantic Regional
Spaceport)
• Revised in 2016: awards only to agencies or political subdivisions of
Commonwealth
• Matching funds advantageous
• Combinable with other VDOT $ sources (RS, EDAP, COF) and VTC
• Administered by CTB through VDOT
10
Competitive Grants
5. Commonwealth’s Development Opportunity Fund (COF) (1996)
• Matched cash grant from Governor’s discretionary fund to political
subdivisions of Commonwealth
• Road, rail, other access costs beyond existing funding capability
• “Performance” agreement required between political subdivision(s)
and private investor(s) for projects in areas of high unemployment
and/or poverty;
• Assistance level is calibrated to level of economic impact: metrics of
job creation, annual wage rates
• “Deal closing” fund
• Administered by VEDP
• Office of the Governor reserves the right to announce awards
11
Competitive Grants
6. Agriculture and Forestry Industries Development Fund (AFID,
2012)
• Cash performance grants or loans to political subdivisions from
Governor’s discretionary fund
• “Country Cousin” of the COF: to add value to Virginia-grown
agricultural/forestry products
• Road, rail, other access costs beyond existing funding capability
• “[A] minimum of 30% of the agricultural or forestry products to which
the facility is adding value will be grown or produced within the
Commonwealth of Virginia in normal years.”
• Office of the Governor reserves the right to announce awards
6/5/2019 12
Competitive Grants
7. Virginia Community Development Block Grant Program (1982)
• Competitive grants only to units of local government
• Eligible communities: those that don’t qualify for direct HUD CDBG
allocations based on population income statistics
• Maximum feasible priority to activities that will benefit low and
moderate income families and assist the prevention or elimination of
slums and blight
• Road expenditures explicitly eligible for community improvement
grant funds
• Based on federal Housing and Community Development Act of 1974
• Administered by VDHCD
13
Competitive Grants
8. U.S. Department of Agriculture Rural Development Grants
• Rural Business Development Grant Program
Competitive, unmatched awards to support small/emerging
businesses “outside urbanized periphery” of any city with
population ≥ 50k
Eligible: towns, communities, state agencies, authorities,
nonprofit corporations, higher ed., federally recognized tribes,
rural co-ops
• Community Facilities Direct Loan and Grant Program
For development of essential community facilities where no
incorporated civic authority exists and where commercial credit
is not available at “reasonable rates and terms”
14
“Competitive Entitlements”
9. Virginia Tobacco Region Revitalization Commission
(Master Settlement Agreement, 1998)
• Until 2013, to indemnify growers and create economic base
other than tobacco
• After 2013, to “revitalize” former tobacco-dependent jurisdictions
of Virginia
• Southside and Southwest regions eligible for economic
development grants that include access roads: $9.7 million in
FY2018
• Southside region jurisdictions receive annual allocations—21
counties had total balance of ~$22.7 million on 5/29/18
15
Legal Entitlements
10. HUD Community Development Block Grants (Housing and
Community Development Act, 1974)
• Annual CDBG appropriation by U.S. Congress to “entitlement”
jurisdictions in each state
• Jurisdictions identified by U.S. Census Bureau and metropolitan
area boundaries published by OMB
• Cities with populations ≥ 50k or urban counties with populations ≥
200k where ≥ 51% are Low to Moderate Income per annually
revised income limits
• Community grants in proportion to extent of poverty, housing
overcrowding, age of housing, growth lag; to address community
needs including streets, sidewalks, curbs, gutters
• Virginia: 30 entitlement jurisdictions in FY16, $34m in grants
6/5/2019 16
License Taxes
11. a. Coal Severance
§ 58.1-3741.A.
• 0.75% - 1% of gross receipts from the sale or utilization of
severed coal
• 100% to the jurisdiction GENERAL FUND
§ 58.1-3741.B.
• 0.75% - 1% of gross receipts from the sale or utilization of
severed coal
• 75% to jurisdiction ROAD FUND, 25% to VCEDA
17
License Taxes
11. b. Natural Gas Severance
3 statutes allowing license taxation at rate of ≤1% of gross
receipts from the sale at fair market value...
• §58.1-3712 to the jurisdiction GENERAL FUND
• §58.1-3713 to jurisdiction ROAD FUND (75%) and
VCEDA (25%)
• §58.1-3713.4 to the jurisdiction ROAD FUND (50%) and
VCEDA (50%)
Coal and natural gas business license taxes may be applied
wherever such deposits are extracted
18
19
Coal and Natural Gas
Deposits and Revenues
Deposit and production data from VA Dept. of Mines, Minerals and Energy
$-
$5
$10
$15
$20
$25
$30
Mil
lio
ns
Local Revenues from Coal, Oil and Gas Severance
Source: Virginia Auditor of Public Accounts
6/5/2019 20
Natural Gas and Coal
Production 2017
Since 2011,
natural gas production
↓23.6%
coal production
↓41.4%
in Commonwealth of
Virginia
Data and graphics from U.S. Energy Information Agency
Collaborations
12. a. Transportation District Act of 1964 (§33.2-1900 et seq.)
• Northern Virginia Transportation District (1964)
• Funding: 2% regional motor vehicle fuel tax (1980)
Metrorail support
• Potomac and Rappahannock Trans. Dist. (1987)
VRE support with NVTC
Balance to local jurisdictions for discretionary use
Bus service
21
Major
Collaborations HB 2313 (2013)
22
NORTHERN VIRGINIA TRANSPORTATION DISTRICT
(1964) Transportation District Act of
1964 Code of Virginia §33.2-4903
Revenue: 2.1% fuel tax in member
jurisdictions (Code of Virginia §58.1-2295)
City of Alexandria
City of Fairfax City of Falls Church
Arlington County Fairfax County
Loudoun County
POTOMAC AND RAPPAHANNOCK
TRANSPORTATION DISTRICT (1987)
Transportation District Act of 1964
Revenue: 2.1% fuel tax in member jurisdictions
City of Manassas City of Manassas Park Prince William County Stafford County City of Fredericksburg Spotsylvania County
PLANNING DISTRICT 23 HAMPTON ROADS TRANSPORTATION
FUND (2013)
Code of Virginia § 33.2-2600
REVENUE: HB 2313 (2013)
• 2.1% motor fuel tax in member jurisdictions (Code of Virginia § 58.1-2295)
• 0.7% regional sales and use tax (Code of Virginia § 58.1-638)
PLANNING DISTRICT 8 NORTHERN VIRGINIA TRANSPORTATION AUTHORITY ACT OF
2002
REVENUE: HB 2313 (2013) Code of Virginia §33.2-2510
• 0.7% regional sales and use taxes • Regional deeds of conveyance fee • 2% regional transient occupancy tax • C&I tax or equivalent • (70/30 rule)
Cities of Chesapeake, Franklin, Hampton, Newport
News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia
Beach, Williamsburg; counties of Isle of Wight, James City, Southampton,
York
HAMPTON ROADS TRANSPORTATION ACCOUNTABILITY
COMMISSION (2014) Code of Virginia § 33.2-2601
Collaborations
12. b. Transportation districts funded by a voluntary local
commercial and industrial property tax
• Uniform Act for the Creation of Local Transp. Districts
(1993)
• Transportation Improvement Districts Within Certain
Counties (2001)
12. c. §15.2-2400 et seq.: Special Service Districts
• Voluntary additional real estate taxes
• Adaptable to a variety of jurisdictions and purposes
• Can pay debt service on loans for transportation
improvements
• Used widely in Virginia
23
Land Development Charges
13. Tax increment finance areas (1988)
• Can provide roads and other public amenities
• Segregates real estate tax revenues that result from property value
increases over a designated base year
14. Cash proffers
• Meant to offset the costs of development after rezoning
• 3 statutes for eligibility: only 6 counties, 2 cities, 18 towns still
ineligible by 2010 Census
• 2016 legislation introduced new “reasonable” standards with 3
exemptions relating to Metrorail proximity
• Transportation projects = about 30% of proffer spending FY03-15
24
Self-Funding Infrastructure
15. Tolled highways and highway systems
• Dulles Greenway (Virginia Highway Corporation Act of
1988): VDOT to purchase?
• Richmond Metropolitan Transportation Authority (City of
Richmond, Counties of Henrico and Chesterfield, 1966):
Powhite Parkway, Downtown Expressway, Boulevard
Bridge
• Chesapeake Transportation System: Chesapeake
Expressway (2001) and Dominion Boulevard (2017)
25
Other Options
16. Local Resource Allocation Options
• Property tax set-aside
• Commercial and industrial property tax (2007) (Planning
Districts 8 and 23)
• Business, Professional and Occupational License Tax set-
aside
• Motor Vehicle license tax set-aside
• Sales tax set-aside
• Statewide Local Option sales tax set-aside
• Public Right-of-Way use fee: available to localities that
maintain their own roads AND have passed an ordinance
authorizing collection
26
27
BIG PICTURE
C&G
ARC
MSA
RMTA
HRTAC
CTS
NVTD
PRTD
A Guide to Transportation Funding Options
Available to Virginia Jurisdictions http://www.virginiadot.org/vtrc/main/online_reports/pdf/19-R1.pdf
6/5/2019 28
Veterans Bridge
City of Chesapeake