Highway User Fee Funding Of Local Roads in Illinois NOT Equitable. NOT Sustainable. October 20, 2015 1
Illinois Compiled Statutes References Illinois Tax Handbook for Legislators, Legislative Research Unit of Illinois General Assembly, Fiscal Years 1984 thru 2015. Web-Site: http://www.ilga.gov/commission/lru/lru_home.html Annual Report of Collections and Distributions, Illinois Department of Revenue, Fiscal Years 2000 thru 2009. Web-Site: http://tax.illinois.gov/aboutidor/taxstats/ "Motor Fuel Tax Allotment Statistics" Annual Reports, Illinois Department of Transportation, 1980 thru 2014. Web-Site: http://http://www.idot.illinois.gov/transportationsystem/local-transportation-partners/county-engineers-and-local-publicagencies/mft-distribution/mft-yearly 2
References For the Record Annual Report, Illinois Department of Transportation, Fiscal Years 1990-2014. Web-Site: (Google It) Illinois Highway Mileage and Street Statistics 2014, Illinois Department of Transportation. Web-Site: (Google It) Illinois Highway Statistics Sheet 2014, Illinois Department of Transportation. Web-Site: (Google It) IACE - Studies. IDOT Staff. 3
Public Roads in Illinois Local Jurisdiction (Local Roads) County Highways Township/Road District Roads Municipal Streets State Jurisdiction (State Highways = IDOT) State Highways US Highways Interstate Highways Toll Roads 4
Illinois Highway & Street Facts 2014 146,765 miles of Public Roads 130,492 miles (88.9%) = Local Roads carrying 36.3% of the traffic 15,978 miles (10.9%) = State Jurisdiction carrying 55.3% of the traffic 294 miles (0.2%) = Toll Roads carrying 8.3% of the traffic 5
Illinois Highway & Street Facts 2014 Centerline Road Mileage Vehicle Miles of Travel 10.9% 0.2% 36.3% 55.3% 88.9% IDOT Toll Local Roads 8.3% IDOT Toll Local Roads 6
Highway User Fees Highway User Fees are taxes and fees paid by users of the public road system. Highway User Fees are paid by the user regardless of how much the user travels upon Local Roads, State Highways or Toll Roads. Highway User Fees crafted to cover the cost of maintaining and upgrading the system, feature a very strong cost/benefit principle to those users of the system, without penalizing those who do not utilize the system. 7
User Fees Collected by State (A Portion Returned to Roads) Motor Fuel Tax (MFT) Paid at the Pump Motor Vehicle Revenue (MVR) Paid at Secretary of State Vehicle Registration Driver's License Certificates of Title 8
User Related Fees Collected by State (NOT Returned to Roads) Sales Tax Automotive and Filling Station Automobile Renting & Occupation Tax Tire User Fee Vehicle Use Tax (Sales Tax Automotive and Filling Station includes sales tax on a variety of related items, some of which are non-highway user related such as candy bars, soda, etc. ) 9
6000 5000 4000 3000 State of Illinois Highway User/Related Fees Collected [$ Millions] Auto Rent and Occupation Use Tax Tire User Fee Vehicle Use Tax Sales Tax - Auto & Filling Station MVR (Motor Vehicle Revenue) MFT (Motor Fuel Tax) 2000 1000 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 (Data for Sales Tax Auto & Filling Station not available for 1980-1995 & 2010-Present) 10
State of Illinois Highway User Fees Collected [$ Millions] 3500 3000 MVR (Motor Vehicle Revenue) MFT (Motor Fuel Tax) 2500 2000 1500 1000 500 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 11
State of Illinois Highway User Fees Collected [$ Millions] 3500 Revenue Stream (MFT & MVR) 3000 2500 2000 1500 1000 500 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 12
3500 3000 State of Illinois Highway User Fees Returned to Roads (Revenue Stream, No Bond Proceeds) [$ Millions] MFT & MVR Revenue Stream Amount Returned to IDOT and Local Roads 2500 2000 1500 1000 500 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 13
3500 3000 State of Illinois Highway User Fees Returned to Roads (Revenue Stream, No Bond Proceeds) [$ Millions] MFT & MVR Revenue Collected Amount Returned to IDOT Amount Returned to Local Roads 2500 2000 1500 1000 500 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 14
120% State of Illinois Highway User Fees Returned to Roads (Revenue Stream, No Bond Proceeds) [Percent of User Fee Revenues Collected] Percent Returned to IDOT and Local Roads 100% 80% 60% 40% 20% 0% 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 15
100% 90% 80% State of Illinois Highway User Fees Returned to Roads (Revenue Stream, No Bond Proceeds) [Percent of User Fee Revenues Collected] Percent Returned to IDOT Percent Returned to Local Roads 70% 60% 50% 40% 30% 20% 10% 0% 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 16
Illinois Highway & Street Facts 2014 Centerline Road Mileage Vehicle Miles of Travel 10.9% 0.2% 36.3% 55.3% 88.9% IDOT Toll Local Roads 8.3% IDOT Toll Local Roads 17
Illinois Highway & Street Facts 2014 Centerline Road Mileage (No Toll Roads) 10.9% Vehicle Miles of Travel (No Toll Roads) 39.6% 89.1% 60.4% IDOT Local Roads IDOT Local Roads 18
Contribution vs Share of Revenue 2014 Centerline Road Mileage (No Toll Roads) 10.9% Share of MFT and MVR 22.5% Returned to Roads 56.0% 21.5% 89.1% IDOT Local Roads IDOT Local Not Returned 19
Contribution vs Share of Revenue 2014 Vehicle Miles of Travel 39.6% (No Toll Roads) Share of MFT and MVR 22.5% Returned to Roads 56.0% 60.4% 21.5% IDOT Local Roads IDOT Local Not Returned 20
What if...... Local Roads had received 40% of Highway User Fees Collected by the State in 2014? Answer: Local Roads would have received an additional $577 Million, an 86% increase.... Local Roads had received 40% of Highway User Fees Collected by the State from 1980 to 2014? Answer: Local Roads would have received an additional $9.9 Billion. 21
In Effect...... Local Roads were donors to the State of Illinois in the amount of $ 577 Million in highway user fees collected by the State in 2014?... Local Roads have been donors to the State of Illinois to the tune of roughly $9.9 Billion in highway user fees collected by the State from 1980 thru 2014? This is neither Equitable nor Sustainable for Local Roads! 22
Needs? What Needs? HR 190 of the 92nd GA Hartke-Black Study The cost to upgrade Illinois rural highways to accommodate 80,000-lb. trucks was estimated to be $60 billion for almost 84,000 miles of highway in 2001 dollars. 23
Needs? What Needs? IACE Revenue Committee 2006 Needs Study The funding shortfall to maintain and upgrade Illinois county highways and township/road district roads to accommodate 73,280-lb. trucks was estimated to be $770 Million per year based on upgrading 5% of the necessary mileage per year. Total cost of $15.4 Billion. The funding shortfall to maintain and upgrade Illinois county highways and township/road district roads to accommodate 80,000-lb. trucks was estimated to be $2.19 Billion per year based on upgrading 5% per year. Total cost of $43.8 Billion. 24
Needs? What Needs? Most recent Capital Program in Illinois: Illinois Jobs Now in 2009 Historic Changes from Past Capital Programs Increased MVR Highway User Fees BUT: Directed Entire Revenue Stream Increase to Bonding $ 3.054 Billion (86%) to IDOT $ 0.5 Billion (14%) to Local Roads NO INCREASE in Revenue Stream to Local Roads!!! NO INCREASE in Revenue Stream to IDOT!!! INCREASED Maximum Vehicle Size/Weight on Local Roads to the 80,000# Vehicle!!! 25
Needs? What Needs? ILLINOIS ASSOCIATION OF COUNTY ENGINEERS (IACE) REVENUE COMMITTEE LOCAL ROAD 2014 REVENUE SHORTFALL Annual Total Total Items [$ Millions] [$ Millions] System Preservation Shortfall = 624 ----- 80,000# Highway System Shortfall * = (Includes System Preservation Shortfall) 6,382 125,376 * Assumes Upgrade of 5% of Necessary Mileage per Year (20-Year Program) 26
State of Illinois MFT Revenue/Costs vs. Purchase Power Counties [% Increase over State FY 2000] 175% 150% 125% 100% 75% MFT Revenue Cost Increase Purchase Power 91.0% 77.0% 128.0% 143.0% 148.0% 50% 25% 0% -25% 5.9% 6.4% 7.5% 9.7% 11.9% 12.9% 14.1% 10.3% -1.9% 1.1% 1.1% -2.0% -4.5% -1.3% -50% -36% -42% -56% -60% -60% -75% -100% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 27
State of Illinois MFT Revenue/Costs vs. Purchase Power Townships/Road Districts [% Increase over State FY 2000] 175% 150% 125% 100% 75% MFT Revenue Cost Increase Purchase Power 89.0% 76.0% 126.0% 141.0% 139.0% 50% 25% 0% -25% 5.9% 6.4% 7.5% 9.7% 11.9% 12.9% 14.1% 10.3% -1.9% 1.1% 1.1% -2.0% -4.5% -1.3% -50% -35% -42% -55% -59% -59% -75% -100% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 28
Net Effect MVR and MFT Highway User Fee Revenues returned to Local Roads could only put contractors labor, equipment and materials to work on County Highways, Township/Road District Roads and Municipal Streets 4 days in 2014 for every 10 days they were put to work in 2000. We are watching our Local Road system, particularly the rural areas, slowly degrade back to conditions from an earlier time. We re watching it slowly return to dirt and mud. THIS IS NOT SUSTAINABLE! 29
Net Effect Local Government is responsible for 89% of the non-toll road mileage in Illinois carrying 40% of its traffic yet the highway user fee revenue sharing mechanism is broken with the State of Illinois returning to Local Roads only 21.5% of the revenue paid by that traffic. This places an extraordinary burden on Local Government to maintain Local Roads, primarily through real estate taxes. That s a $577 Million unfundated mandate in 2014 alone and a $9.9 Billion unfundated mandate since 1980. THIS IS NOT EQUITABLE! 30
In Conclusion 40% of every highway user fee dollar collected by the State of Illinois should be returned to Local Roads through existing formula. 31
QUESTIONS? 32
Illinois Association of County Engineers 712 South Second Street Springfield, IL 62704 Phone: 217-523-1146 33