Legislature(2013 - 2014)BUTROVICH 205
03/27/2014 01:30 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| SB197 | |
| SB94 | |
| HJR10 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 94 | TELECONFERENCED | |
| += | SB 197 | TELECONFERENCED | |
| += | HJR 10 | TELECONFERENCED | |
HJR 10-CONST. AM: TRANSPORTATION FUND
2:01:30 PM
CHAIR EGAN announced HJR 10 to be up for consideration [CSHJR
10(FIN) was before the committee].
REPRESENTATIVE PEGGY WILSON, sponsor of HJR 10, Alaska State
Legislature, Juneau, Alaska, said two other bills in the other
body make up the concept behind HJR 10. She noted that those
bills are sitting in House Finance. She asked to be able to
present the entire package concept before drilling down into HJR
10. It would give the committee an idea how the fund could come
together if the Constitution were changed to allow it. All
methods of transportation in Alaska are very important to
everyone in Alaska she started.
2:04:09 PM
REPRESENTATIVE P. WILSON said Alaska's transportation system is
aging; no major road has been built in this state in 30 years.
With population growth comes congestion, especially since that
growth is primarily in the Railbelt where the population has
tripled, she said.
She highlighted that the state ferries are well-maintained but
cost a lot to operate and are aging. Alaska has over 250 state-
owned airports that need upgrades and major maintenance. Barges
can only travel up the rivers during the few warm months to
bring the necessary gravel to maintain those unpaved airstrips.
The state owns 25 harbors and is in the process of transferring
them to municipalities, but the harbors are deteriorating and
the municipalities often don't have the money for maintenance.
2:06:35 PM
REPRESENTATIVE P. WILSON said our natural resources are not
normally on the transportation grid or close to railroads, and
access to them is needed in order to diversify the sources of
revenue the state receives.
2:06:56 PM
She said the state has a backlog of projects in excess of $20
billion, and over $700 million in deferred maintenance. The
funding from both the state and federal government is not
keeping up with the demand. Rural highway traffic across the
U.S. is up 23 percent and continues to grow; vehicle miles
traveled is up 35 percent and still growing, too. There is an
estimated $65 billion loss due to traffic congestion every year
and that loss is passed on to consumers.
REPRESENTATIVE P. WILSON said federal fuel taxes are not keeping
up with inflation. In Alaska and nationally fuel taxes can't
keep up with demand. Revenues for fuel taxes aren't going as far
because advances in technology result in cars going further on a
gallon of gas. Alaska has not had an increase in motor fuel
taxes since 1961, and at 8 cents/gallon it's the lowest in the
nation. The next closest is Wyoming at 14 cents/gallon.
2:08:24 PM
The new federal transportation funding program, MAP-21, focuses
on national highways and safety which are great goals, but
Alaska only has four national highways. The state used to have
greater flexibility with regard to safety dollars, but now it is
limited to roads with notable crash histories, and the national
highway system funds are now driven by performance. Since the
penalties for non-performance are painful, the state match could
have to double or triple.
The state may be forced to focus more on just keeping up than
modernization and there are a lot of maintenance projects that
don't provide new lanes or access, which is what Alaska needs.
She said the Council of State Governments said states can expect
to see a slowdown in payments from the Federal Highway Trust
Fund as early as this summer and by next summer the fund will be
empty.
REPRESENTATIVE P. WILSON said the dwindling pre-MAP 22
allocations to Alaska make it difficult for DOTPF to fund Alaska
highways and communities. To further complicate matters, 14
percent of the 28 percent that is allocated for the non-national
highways is divided depending on population: 4.4 percent goes to
cities that have more than 200,000 in population (only Anchorage
qualifies); 5.4 percent is directed to cities with a population
less than 200,000 but more than 5,000. That only reaches Sitka,
Ketchikan, Juneau, Fairbanks, Wasilla, Kodiak and Kenai. The
remaining 4.2 percent is for all the other roads in the state. A
portion is flexible, but unfortunately it is consumed by
increased mandatory requirements from the federal government
like data collection, bridge inspections, geographic information
mapping and other necessities leaving very little for project
purposes.
REPRESENTATIVE P. WILSON said Alaska has always had a serious
problem with financing transportation infrastructure; there is a
new transportation funding program in the works, but no one
knows what that will mean. There will be no more money in the
highway trust fund in 2015 and Alaska needs to bring its aging
infrastructure into the 21 Century.
2:13:03 PM
She emphasized that to access Alaska's natural resources the
state needs to take responsibility for developing a
transportation system that depends less on the federal
government for Alaska's roads, harbors, airports, and railroads.
Alaska needs to start planning for the future and that is not
happening now. These problems are not new; they are just
compounding, she said.
She related that the House Transportation Committee started
investigating these funding issues five years ago and for three
years they listened to DOTPF, grass roots organizations, and
transportation organizations identifying the challenges of all
the transportation in this geographically diverse state. The
committee flew to remote villages to view transportation systems
and subsequently started its quest for a solution. The committee
heard from the Alaska Municipal League (AML), the MatSu Borough
that contracted an independent study on statewide transportation
fiscal issues, and from national experts. The committee rejected
fixing the problem by bonding, which would make future
generations pay the debt.
REPRESENTATIVE P. WILSON explained that the proposal in HJR 10
has three parts: the first establishes the dedicated Alaska
transportation taxes and fees as a part of the Transportation
Fund that was in existence at statehood. She noted that the
Alaska Constitution contained two dedicated funds related to
transportation: the Highway Fund and the Water and Harbor
Facilities Fund.
She said the Alaska Transportation Infrastructure Fund (ATIF)
will combine these two funds. It requires a vote of the people
to change the Constitution to reinstate the fund, but it will
ensure that all taxes and fees pay for transportation
activities.
The second part of the proposal is to continue funding
transportation as in the past. This is the key to making real
progress and improving the transportation infrastructure. This
is the one way to slowly chink away at the $20 billion backlog
of projects and to have more 100 percent state funded projects.
The third solution is to take advantage of both the cost savings
and the time savings for state funded projects (projects without
federal strings) while providing for growing transportation
needs. This fund will move projects from planning to completion
much faster and cost less. With state funded projects Alaskans
will see the impact of state dollars in communities much sooner
and they will cost less.
For example, state funds were used in the construction of the
Elmore Road Extension in Anchorage, which was completed in three
years as opposed to the 7-10 years it would have taken going
through the federal process. She said the intention is to
provide a dedicated revenue stream that will allow more projects
to be completed faster and cheaper in addition to the ongoing
state and federal funds.
2:18:36 PM
REPRESENTATIVE P. WILSON said the concept of funding ATIF is to
endow it with a large initial investment. It will progress while
maximizing federal dollars the state gets. She noted that she
heard that a federal dollar is worth 75 cents compared to a
state dollar. This endowment will be determined after the
Constitution has been changed to reinstate the dedicated
Transportation Fund. She highlighted that special use fees -
vanity license plates, airport lease revenues - have been
preserved.
She said the plan would be to have the Department of Revenue
(DOR) manage ATIF and appropriate it like the Permanent Fund
(each year 5 percent of the market value averaged over the
previous 5 years) and 5 percent of the profits would be
reinvested into the fund and each year there would be funds
available for appropriation - plus half of the taxes and fees
collected from the previous year). Also coming out of the fund
would be the expenses for the Division of Motor Vehicles, the
expenses to administer and manage the fund, and costs for the
Advisory Council. The fund would be self-sufficient and not
require general funds for administration. The appropriations
will follow the regular budgetary process and would be approved
by both the governor and the legislature.
She said the fund needs to be set up and then next year the
projects can be prioritized. Her idea is that it could be
handled by a two-panel, two-set process. The first step is to
prove and decide if the projects are better suited for
development using state funds or going through the regular STIP
process, effectively deciding if it will be a federalized
project or a 100 percent state funding project.
The Alaska Transportation Panel (ATP) could be comprised of
seven members: four public, the DOTPF commissioner, a STIP board
member, and a member from the Alaska Infrastructure Commission
(AIC). Members will serve four-year staggered terms; DOTPF would
develop a set of guidelines to decide if a project would be best
to be federalized or funded through ATIF.
2:22:21 PM
REPRESENTATIVE P. WILSON said the intent is to take the politics
out of the decision making process for funding projects. When
the project has been selected for using ATIF funds it must then
be reviewed by the AIC, which would prioritize ATIF selections
using DOTPF criteria. This list will need to be completed by the
Advisory Commission by October 15 each year and submitted to
both the governor and the legislature to make sure the ranked
projects get into the capital budget.
She explained that ATIF projects are limited to capital
transportation and major maintenance projects. The proposed
constitutional amendment states that the appropriations from the
fund must be used for transportation and related facilities that
are designated by law. In the enabling statutes she proposed to
constrain the fund to only be used on capital projects and major
maintenance. This keeps the funds functioning as an additional
revenue stream to what gets appropriated. The difference in the
language from the constitutional amendment to the enabling
statutes will give future legislators the ability to use the
money from this fund for operations only in times of fiscal
shortfalls. All the legislature would have to do is make a
statute change, which would allow the fund to be used for
operations.
Further, she explained that anyone could submit a project for
consideration: the state, a borough, the unorganized borough, a
municipality, a community or a village. She said she envisions
submission forms with enough information for the commission to
rank the projects. Every project would be considered. The funds
available for federalized projects, which are constrained to use
the federal processes, could be no more than 20 percent of the
fund. This is to incentivize more state-funded projects.
REPRESENTATIVE P. WILSON showed a graph of examples and repeated
that a statute change could allow the fund to be used for other
things. The payout starts at about $83 million the first year
and then $131 million the second year and rises to a rate of
about $3.3 million in the early years. She reminded the
committee that this is $103 million in addition to the existing
operating and capital budgets.
2:25:19 PM
She projected that putting in $2 billion now will grow to $5
billion in 20 years. That includes 50 percent of the revenue
that had been deposited over the 20 years. This is what can be
expected if the other two pieces of legislation in the other
body pass, she said.
2:26:35 PM
REPRESENTATIVE P. WILSON summarized that the ATIF would allow
Alaska to plan for its future and get rid of the deferred
maintenance list; it would leverage more federal funds and
encourage more state projects to be done; and it would decrease
dependence on the federal dollars.
It would increase property values, employment, and Alaskans
would see an increase in real wages. It would reduce the cost of
production and noncommercial travel time. ATIF would improve
access to the state's resources and reduce the cost of
production resulting in an improved quality of life for
Alaskans. Alaska has a majority of the nation's coast lines, but
has significant challenges developing and maintaining the
state's docks and harbors for access to fishing resources. The
state has world class mineral deposits but few transportation
corridors to get to those resources. ATF will improve access to
those resources which will decrease the cost of production.
She summarized the two major issues: declining funds, both
federal and state, and an aging transportation system. This
constitutional amendment needs to be on the ballot this
November; let the people decide, she concluded.
2:30:14 PM
TOM BRICE, lobbyist, Alaska Laborers, Juneau, Alaska, stated
that HJR 10 will break down some constitutional barriers that
exist in terms of long term transportation projects for the
state.
2:31:31 PM
SARAH GEARY, Legislative Coordinator, Alaska Municipal League
(AML), stated that HJR 10 will help the state be ready to
maintain and build new infrastructure to meet future needs.
CHAIR EGAN found no further comments and held HJR 10 in
committee.
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