WASHINGTON STATE ROAD USAGE CHARGE ASSESSMENT

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1 1 WASHINGTON STATE ROAD USAGE CHARGE ASSESSMENT Anthony L. Buckley Director, Office of Innovative Partnerships Washington State Department of Transportation

2 Overview: Washington State Infrastructure 2

3 Infrastructure is the foundation of the state and national economy and quality of life WA transportation network by the numbers: 18,715 highway lane miles 3,312 state-owned bridges 127 miles of dedicated bike lanes Washingtonians lose $6.5 billion annually in lost time and wasted fuel due to congestion, deteriorated roads, and safety problems. Congestion in the Seattle/Tacoma metro regions has increased by 91% since 2011* Washington drivers spend $656 annually (on average) for vehicle repairs and operations costs due to poor road conditions. This equates to an estimated $3.78 billion spent annually (5.768 million licensed vehicles). $10 billion is the estimated amount needed to maintain and/or repair existing bridges, highways and local roads over a 10-year period at least half of this is not currently funded. 3

4 BY 2027, 70% OF STATE GAS TAX REVENUES WILL GO TO DEBT SERVICE PAYMENTS* WA STATE PORTION ($) OF NET FUEL TAX % DEBT SERVICE OF WA NET FUEL TAX HISTORICAL FORECAST 100% 1,400,000,000 90% 1,200,000,000 1,000,000,000 69% 70% 80% 70% 60% 800,000, ,000,000 39% 50% 40% 400,000,000 30% 20% 200,000,000 10% - 0% *Based on Net Fuel Tax Revenue and Debt Service projections per the Nov 2016 Forecast. - Debt service only includes debt first payable by the fuel tax. This excludes SR 520 corridor debt service (first payable by tolls), but includes Tacoma Narrows Bridge debt service (reimbursed by tolls). - WA state s portion of fuel tax revenue does not include all fuel tax revenue pledged for debt service. For example, revenue distributed to cities and counties is also pledged for debt service, and beginning in FY 2019, revenue from select vehicle fees (for selected projects). 4

5 SEATTLE CONGESTION 9 th WORST IN US If Washington could add enough lanes to build our way out of congestion what would that look like? Total additional interstate miles needed to drive posted speed limit at all times: 451 lane miles at an estimated cost of $115 billion Depending on timing and percent bonded, would require a $2.20 to $2.50 gas tax increase. Source: Inrix Graphics 5

6 WA S INFRASTRUCTURE NEEDS High-Level analysis of our interstate system: Assumes no induced demand No growth in demand Does not address increased capacity needed for unrestricted travel on non-interstate connections (other state routes or local roads) May not address costs or timing of full environmental impacts No additional transit or alternative modal options Does not consider operations and maintenance for existing built system Current year costs 6

7 GAS TAX INCREASES WILL NOT MEET OUR REVENUE NEEDS The gas tax in Washington State would have to be raised about 1.5 cents per gallon, per year on all vehicles from in order to equal net revenues from a road usage charge of 2.4 cents per mile. This would keep funding at status quo levels. It does not address growing needs for improvements or maintenance. 7

8 WHAT s Driving RUC? Increases in Fuel Efficiency & Production of EVs Changes to federal CAFÉ Standards are not likely to stem consumer demand for higher MPG vehicles: Volvo plans to produce only hybrid and electric cars starting in 2019 General Motors recently announced that its future fleet with be allelectric, with 20 electric models available by 2023 Toyota 2017 Mirai - powered by hydrogen fuel cell with an EPA rated 312- mile range. Plans to shift to hydrogen fuel cell fleet in the next 15+ years Ford is investing $4.5 billion to transition to hydrogen fuel cell and other alternative fuels over the next 15+ years Nearly 400,000 people put down a $1,000 deposit for Tesla s all-electric Model 3 8

9 Pilot update: Washington State will be the first pilot system to test interoperability across an international border. 9

10 Idaho SNAPSHOT: WASHINGTON S RUC PILOT PROJECT Federal FAST Act funding: Surface Transportation Funding Alternatives Program Grants: Stage 1 - Final Design & Set-up, $3.874 M -- complete Stage 2-12-month live pilot, and Stage 3, evaluation and reporting: $4.6 M -- underway Summary of Washington RUC Pilot Project: Year-long, statewide test of Washington-designed RUC system for up to 2,000 volunteer test vehicles Partners: Oregon Department of Transportation, City of Surrey, BC, Idaho Transportation Department, Seattle Electric Vehicle Association and Plug-in America, Mileage Reporting Choices: Mileage Permit, Odometer Charge, Automated Mileage Meter (2 types), and Smartphone Oregon 10

11 2,000 PARTICIPANTS SELECTED FROM A POOL OF NEARLY 5,000 FROM AROUND THE STATE Data as of February 23,

12 SIX UNIQUE FEATURES OF THE RUC PILOT 1 RUC across borders: testing how RUC will be applied and function between states and Canada 2 Smartphone Innovation Challenge: a new app to deduct outof- state miles for RUC 3 Private business partners: private vehicle licensing offices to help administer odometer readings 4 Financial interoperability test: how two states with their own RUC rates reconcile tax collections for miles driven within their jurisdictions 5 Use of consumer products for RUC operations: using an existing consumer product (Automatic ) for RUC mileage reporting 6 Electric vehicle drivers: feedback whether drivers prefer RUC over other road funding options (EV fees) 12

13 WASHINGTON PILOT: CHALLENGES TO IMPLEMENTATING RUC Outreach to general public Recruit Volunteers Enroll 2,000 drivers Launch Pilot Participants begin recording, review mock invoices, complete key milestones End pilot Report to the Governor, Legislature and USDOT 13

14 Public Sentiment? 14

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16 THE Washington RUC 16

17 Paving the Way for RUC in Washington State 17

18 THE BASIS OF THE ASSESSMENT Identify a sustainable, long-term revenue source for Washington State s transportation system, and transition from the current gas tax Ensure there is consumer choice on how mileage information can be collected and paid During the transition period of moving from the gas tax to a road usage charge, drivers would pay one or the other, but are note intended to pay both For purposes of assessing the gas tax against a road usage charge, we have assumed revenue neutrality and focused on net revenue potential for both 18

19 WASHINGTON S GUIDING PRINCIPLES FOR A RUC SYSTEM Guiding Principle Example of pilot measure Transparency Complementary policy objectives Cost-effectiveness Equity Privacy Data Security Simplicity Accountability Enforcement System Flexibility User Options Interoperability and Cooperation Phasing Change in participant understanding of RUC rate, collection method, and use Impact of pilot on driving habits of participants N/A Total and per-mile RUC vs. gas tax paid by participant income Participant perception of privacy protection, including any changes in perception during pilot Participant perception of data security, including any changes in perception during the pilot Participant understanding of compliance requirements Accuracy of reported road usage, revenue collected, and revenue distributed Reasons for non-compliance expressed by participants N/A Reason for participant preferences of various mileage reporting methods Participant understanding of interoperable RUC N/A 19

20 RUC West 14 western states are involved in research, testing, or managing a legislatively enacted program. RUC West Pilot: Developing a regional RUC system. Beginning July 2019, this 1-year pilot will initially test interoperability between California and Oregon. The project sets the stage for a future western regional pilot and provides a launching point for potential future national adoption and implementation of a RUC. Oregon: OReGO is the only legislatively established ongoing, operational program in the US. There are almost 700 active vehicles in the program. The vehicle count of participants to date is 1,468. California: Pilot maintained more than 5,000 participating vehicles over a 9- month period and demonstrated 6 reporting and recording methods. Pilot also was the first to include heavy commercial vehicles. Colorado: Ran a 4-month pilot in 2017, with 100 participants simulating payments. Determined that RUC is technically feasible. Next steps include continuing education and outreach, and further evaluation of key public issues/concerns (e.g., rural/urban; equity; cost; enforcement; public and private road delineation). Hawaii: This is to be the largest pilot project attempted by a state. HDOT will directly measure road use and provide prototypical billing to over 1 million motorists across the islands. Utah: Legislature voting today on a bill authorizing a RUC study. Washington what more can I tell you? 20

21 Thank you. Anthony L. Buckley Director, Innovative Partnerships Washington State Department of Transportation