In 2016 the General Assembly created the Transit Capital Project Revenue Advisory Board (TCRAB) “to identify possible sources of replacement revenue” when dedicated bond funds tor transit capital projects (approved in 2007) expire in 2019. Based on needs and projected revenues, the average annual revenue gap will be $130 million over the next decade, a 40 percent decrease in current levels. In their final report to the General Assembly issued in August, the advisory board made the following recommendations in order to address the so called “fiscal cliff” in transit capital funding:
- Picking a funding approach that utilizes a combination of revenue sources to spread the impact, or a single statewide source that is predictable and sustainable;
- Revenue sources that ramp up gradually to address future gaps and needs;
- A combination of statewide and regional sources, with the majority of support coming from statewide sources;
- An approach for regional funds directed to prioritized needs within that region;
- A floor on the Northern Virginia and Hampton Roads regional gas taxes; and
- Excess Priority Transportation Fund Revenues (after debt service) dedicated to transit capital as this source becomes available.
Approximately 80 percent of transit capital funds the state provides are dedicated to the replacement of existing assets such as buses, maintenance facilities and supporting technology. This state match is important because it keeps such assets in a “state of good repair.” Currently, the state is able to support rolling stock replacement at a match rate of 68 percent. Without addressing the revenue gap the match rate will fall to approximately 28 percent.
As stated in the final report, a failure by the legislature to replace the loss in capital funding “will have a cascading effect on the ability of these systems to operate safe and reliable service and will result in the loss of federal funds if transit systems are unable to provide matching funds for capital assistance from the Federal Transit Administration.”
In anticipation of the need for the legislature to act to address this issue, VACo’s Transportation Steering Committee drafted the following priority position for inclusion in the 2018 Legislative Program:
Unless the 2018 General Assembly approves increased revenues for multimodal transportation needs that are separate, reliable and permanent, (including dedicated funding for Metro), Virginia will face a congestion and mobility crisis that will strangle economic growth, threaten public safety and negatively affect the quality of life of all residents.
In addition to identifying sources of revenue for transit, TCRAB was also tasked with developing “methodologies for further prioritization of transit capital funds.” The advisory board developed a set of policy principles for project prioritization as outlined in the final report, beginning on page 32 of the document. With the recommendation that the prioritization process be developed by the Commonwealth Transportation Board (CTB) “in a manner similar to the development of the SMART SCALE process,” the advisory board acknowledges that it “would be less effective without new funding to support full implementation.”
VACo Contact: Joe Lerch, AICP