Sources of Financing
Capital District Transportation
Current
transportation financing is an intricate mix of inter-governmental transfers
and other complexities. Funds are
raised directly from users (transit fares, for example) for services received,
indirectly from users (gasoline taxes, for example) for costs associated with
use, and from the public. Both
user-based and general revenue sources are used to collect transportation funds
at the local level, at the state level and at the federal level. At least seventeen different funding sources
are used to finance governmental highway and transit functions in the Capital
District.
New York State relies on revenues collected both at the federal level and
at the state level to fund its transportation work. CDTA and other transit providers use a mix of federal revenues,
state revenues, local revenues and fares.
Local governments carry out highway functions primarily with local
revenues, but also use state funds and, occasionally, federal funds.
Table 26 on page 199 presents an estimate of the total tax and fee burden
to the four-county Capital District's residents and businesses for revenue
sources used at least partially for highway and transit purposes.
Due to the complexity of all the inter-governmental transfers and direct
and indirect sources, the reader is cautioned to view these numbers as
approximations provided to facilitate discussion of new financing ideas. They have been derived from several data
sources and are associated with various calendar or fiscal years between 1992
and 1995. For this reason, a range of
estimates is provided for each value.
The table also relates the tax and fee sources to their use in financing
the program of projects shown in CDTC's 1994-99 Transportation Improvement
Program. (It should be noted that the
1994-99 TIP assumes the ability to spend carryover balances of federal
authorizations during the five-year period; thus, the annual average federal
funds shown in the TIP exceeds a single year's authorizations.)
As shown in Table 26,
the governmental highway and transit functions in the Capital District (ranging
from snow plowing to building bridges and buying buses) are supported by a mix
of federal, state and local-based taxes and fees. CDTC's 1994-99 TIP (and other maintenance and repair work not
shown on the TIP) is predicated upon an expectation of:
·
approximately $85 M
annually in federal funds;
·
$154 M annually in
state funds; and
·
$154 M annually in
local funds, developer assessments and transit fares.
(Not shown in Table 26 are other, site-specific highway investments made
directly by developers to mitigate traffic impacts.)
Table 26:
Highway and Transit Revenue Sources
|
REVENUE SOURCE |
Form of tax/fee |
Approximate Total tax & fee collections
attributable to the Capital Region |
Annual $ to Transportation Reflected in 5-year
Capital District Program |
Capital District gain/loss in annual revenue
from change in tax or fee |
|
|
Low |
High |
||||
|
Revenues for Federal-aid Program |
|
|
|
|
|
|
Federal Fuel
Taxes |
Dedicated[1] |
$55 M |
$65 M |
$67 M |
1¢/gallon = $3.4
M/year |
|
Heavy Vehicle
Fees, Excise Taxes |
Dedicated |
$8 M |
$10 M |
$10 M |
|
|
Federal Personal
Income Taxes |
General[2] |
$1550 M |
$1800 M |
$4 M |
|
|
Corporate, Other
Non-dedicated Taxes |
General |
$600 M |
$700 M |
$2 M |
|
|
Deficit Borrowing |
General |
-- |
-- |
$2 M |
|
|
Revenues for
State Program & State Aid |
|
|
|
|
|
|
State Fuel Taxes |
Part Dedicated |
$25 M |
$30 M |
$26 M |
1¢/gallon = $3.4
M/year |
|
Highway Use Tax
(Heavy Vehicles) |
Part Dedicated |
$8 M |
$10 M |
$11 M |
|
|
Vehicle, Driver
Registration Fees |
General |
$22 M |
$26 M |
$1 M |
|
|
Petroleum
Business Tax |
Dedicated |
$4 M |
$6 M |
$6 M |
|
|
Thruway Tolls[3] |
Dedicated |
$70 M |
$75 M |
$72 M |
|
|
State Personal
Income Taxes |
General |
$440 M |
$510 M |
$13 M |
|
|
Corporate, All
Other State Taxes |
General |
$425 M |
$500 M |
$15 M |
|
|
Sales Tax (State
share is 4%) |
General |
$275 M |
$325 M |
$7 M |
1¢/$ = $70 M/year |
|
Bonding
(borrowing) |
General |
-- |
-- |
$3 M |
|
|
Personal Property Tax on Vehicles |
-- |
-- |
-- |
-- |
1% of vehicle =
$27 M/year |
|
Revenues for
Local Government Programs |
|
|
|
|
|
|
Transit Fares |
Dedicated |
$9 M |
$11 M |
$10 M |
10¢ fare =
$0.8M/year |
|
Traffic
Mitigation Fees and Assessments |
Dedicated |
$1 M |
$4 M |
$3 M |
|
|
Mortgage
Recording Fee |
Part Dedicated |
$20 M |
$30 M |
$7 M |
|
|
Property Tax
& Other General Taxes |
General |
$1150 M |
$1325 M |
$79 M |
|
|
Sales Tax (Local
share is 3 or 4 %) |
General |
$235 M |
$275 M |
$55 M |
1¢/$ = $70 M/year |
|
Congestion Tolls |
|
-- |
-- |
-- |
Max. feasible =
$10-20 M/year |
|
Parking Tax |
|
-- |
-- |
-- |
$1/day =
$10-60M/year |
|
Annual Capital Region Totals[4] |
|
$4,900 M |
$5,700 M |
$390 M |
|
Resource Expectations
Because transportation revenues draw from federal, state and local taxes
and user fees as well as private developer resources, projecting future
revenues is a difficult and risky undertaking.
Future revenues are related not only to levels of future transportation
demand (generating user fees) and overall economic growth (generating taxes)
but also to public policy.
While there is broad support for strong
continued governmental responsibility for transportation, the details
concerning the relative funding responsibilities of the federal, state and
local governments are likely to be adjusted in coming years. Consequently, it is extremely difficult to
project the resources that can be expected to be available for new initiatives.
Clearly, the ability of the Capital District to
undertake new initiatives identified through the New Visions process is predicated on making the most out of current
resources and preparing a compelling case if additional resources are required.
While projections of future funds cannot be made with confidence, and
CDTC has not adopted any policy positions regarding long-term financing, the
following technical assessment can
guide discussions about financing options for New Visions' initiatives:
1. Future
resources for transportation will draw primarily
from the existing mix of sources.
Nationwide, the contribution of new funding sources (congestion tolls,
for example) can be expected to provide only a fraction of the total
transportation resources in the coming twenty years. The Capital Region will likely mirror this situation.
2. Funding
for transportation purposes is related to funding for all other government
functions and revenues. Reliance on
dedicated fund sources does not remove transportation funding from the policy
debate over taxes and government functions.
3. Reduction
in funding from one level of government puts increased pressure on revenues
from other levels of government, from users and from the private sector. This pressure can be expected to be most
intense with regard to expensive initiatives that are primarily of local
benefit, such as a rail transit initiative or an extensive sidewalk program.
4. Finding
new financing streams will be challenging.
Support for new financing may be present only if:
a) There
is a belief that existing funds are being spent efficiently; and,
b) The
user or taxpayer asked to provide the financing is convinced that the benefits
of the transportation investment exceed the additional cost.
5. General
tax sources (sales taxes, for example) has the ability to generate
significantly more revenues than user-based sources (gasoline taxes, for
example). For example, a one-cent
sales tax in the Capital District produces $70 million per year. A one-cent per gallon gasoline tax produces
$3.4 million per year.
6. Traditionally,
it has been considered appropriate to use a mix of user-based and general
revenues to support governmental transportation costs. This is based on the "public
goods" logic that users of transportation receive only part of the
benefits of the public facility or service.
Users should therefore be expected to pay only part of the cost. Other parts of society benefit from the
presence of a highway or transit service.
Therefore, society should bear part of the burden of its cost.