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Transportation Facts, Figures, and Findings: A Review of State Legislatures and DOTs

Joung Lee, Deputy Director, AASHTO Center for Excellence in Project Finance
Jaime Rall, Policy Specialist, National Conference of State Legislatures (NCSL)

March 8, 2012

Slide 2: Transportation Facts, Figures, and Findings: A Review of State Legislatures and DOTs

Slide 3: Presentation Goals

  • Review the NCSL-AASHTO project and its findings on how state legislatures and DOTs govern and pay for transportation systems
  • Explore the successes and challenges of the data collection and analysis process
  • Consider opportunities for collaboration with the transportation librarian and information management community
  • Q&A

Image: Joung Lee, AASHTO
Image: Jaime Rall, NCSL

Slide 4 : NCSL - AASHTO Project Team

  • AASHTO Center for Excellence in Project Finance
    • Supports state DOTs with finance plans and oversight tools
    • Offers training and state-of-the-art finance methods to advance transportation projects and leverage funding
    • Provides professional education, research services, technical assistance and information dissemination
  • National Conference of State Legislatures (NCSL)
    • Bipartisan organization and an instrumentality of the states
    • Serves 7,382 state legislators and 30,000+ legislative staff
    • Provides research, testimony, technical assistance and opportunities for policymakers to exchange ideas
    • Nationally recognized as a leader in state policy issues
  • NCSL-AASHTO Joint Project Oversight Committee
    • 28 DOT and legislative leaders from 19 states

 

Slide 5: NCSL - AASHTO Project Overview

  • Project goal: To fill a knowledge gap about transportation governance and finance, especially interactions between state legislatures and state DOTs.
  • Methodology: 13 months; based on original survey data from 50 states, D.C. and P.R. about state facts and leaders' opinions.
  • Final report (released June 2011): Includes nationwide synthesis of state approaches, plus state-by-state profiles.

Full report available online at

http://www.ncsl.org/?tabid=19117 and

http://www.transportation-finance.org

Image: NCSL-AASHTO pic 3.JPG

Slide 6 : Data Collection and Analysis: More Methodology Details

  • Four surveys
    • Survey 1: Descriptive (fact-based), in-depth (funding and finance), distributed initially to legislative budget officers
    • Survey 2: Descriptive (fact-based), in-depth (executive-legislative roles), distributed initially to legislative research offices and DOT legislative liaisons
    • Survey 3: Normative (opinion-based), anonymous (DOT and legislative perspectives on each other and state approaches): distributed to state legislators and DOT executives only
    • Survey 4: Descriptive (fact-based), brief questionnaire (program evaluations and audits): distributed to the National Legislative Program Evaluation Society (NLPES) only
  • Also: Legislative/legal research; literature review; expert interviews; other supplemental research

Slide 7: NCSL- AASHTO Project Overview

  • What are some key takeaways?
    • The U.S. system of separation of powers necessarily results in areas of overlap and tension, but also opportunities for dialogue and collaboration
    • There is no "one size fits all" for state transportation decision-making; each state approach is complex and unique
  • What does the report NOT do?
    • The report offers tools and options, but does not "rank" states or advise states on which approaches to adopt

Image

Slide 8 : NCSL _ AASHTO Project Overview

  • Topic areas covered .
    • Governance and oversight
    • Funding and finance
    • Communication and collaboration

We will walk through key findings in each topic area to demonstrate the project's scope and the kind of data we collected and analyzed.

Slide 9: Key Findings Governance And Oversight

  • Legislation: The legislature's power to enact laws is balanced by executive veto authority, but also by other executive involvement in the legislative process -- which varies by state. .
    • DOTs in 17 states and D.C. can submit/propose legislation through office of the governor/mayor or by request to legislature
    • MassDOT can file its own bills at the governor's discretion
    • At least 5 state DOTs (Hi., N.D., Okla., Vt. and W. Va.) can draft or present bills for legislative consideration
    • Wyo. has a fully collaborative, iterative process to draft bills
    • Several state DOTs lobby the legislature; but this is prohibited in at least La. and Texas
    • In at least 5 states (Alaska, Minn., N.D., W. Va. and Wis.), DOTs must prepare fiscal notes for bills that affect them
    • Va. and Wis. DOTs also provide policy analyses

Image


Slide 10: Key Findings Governance and Oversight

CEPF Logo.jpg

  • Legislative oversight of DOTs .
    • Theoretically, a fundamental check and balance
    • However… Only about half of DOT executives and state legislators surveyed agreed that a legislature has a fundamental responsibility to oversee DOT operations.
    • But more than 40 percent of legislators and no DOT officials surveyed think their state's DOT should be subject to additional independent oversight and accountability.

Slide 11: Key Findings Governance and Oversight

  • Legislative oversight mechanisms .
    • Committee oversight
    • Transportation/DOT leadership appointments
    • Review of administrative rules and regulations
    • Performance goals
    • Program evaluation and sunset reviews
    • Reporting requirements
    • Legislative requests for information from DOTs
    • Independent sources of transportation information
  • Resources to support DOT compliance .
    • At least 9 state DOTs have received appropriations to help them meet legislative oversight mechanisms

Slide 12: Key Findings Governance and Oversight

States face a well-documented and worsening transportation funding crisis

  • Each state must address the transportation funding crisis within its unique balance of governmental powers.
  • Generally a key area for overlap and tension between legislature and executive branch
  • State budget flexibility is limited by federal and state requirements

Slide 13 : Key Findings: Funding and Finance

  • Budget and appropriations
  • In all but 8 states and P.R., executive agencies such as DOTs submit budget requests to the governor and to the legislature
  • Image: Figure 4 - state budget process.bmp

Slide 14 : Key Findings: Funding and Finance

  • Federal funding
  • Federal funding accounts for around 20 percent of both highway and transit funding
  • As of 2006, federal funds were the largest single source of funding for highway purposes used by 17 states and D.C.*
  • At least 15 states and D.C. allow some federal funds to flow to the state DOT without state legislative appropriation
  • In 3 states (Ill., Minn. and S.D.), funds are reflected in state budgets but can be spent without legislative action
  • Other states have more active legislative role by reviewing, appropriating or setting expenditure limits on federal funds
    * Refers only to funds used by state governments for highway purposes.

Slide 15 : Key Findings: Funding and Finance

  • State funding
    • States provide about half of all surface transportation funding
    • Legislatures have more power over state revenues and appropriations
  • State revenue sources for roads, bridges, rail and transit
    • Fuel taxes (all states + DC + PR; as of mid-2012, 6 states will index); largest single source of highway funds used by half the states
    • Sales taxes on fuel or taxes on distributors/suppliers (14 states + PR)
    • Motor vehicle or rental car sales taxes (29 states)
    • Vehicle registration, license or title fees (48 states + PR)
    • Vehicle or truck weight fees (37 states)
    • Tolls (24 states + PR, plus non-state turnpike or tolling entities)
    • General funds (34 states + DC, plus Vt. as occasional exception)
    • Interest income (37 states + DC + PR)
    • Other (40 states + DC + PR)

Slide 16 : Key Findings: Funding and Finance

26 states restrict use of fuel tax revenues to highway and road purposes only

Image: US Map

Slide 17 : Key Findings: Funding and Finance

  • Legal Protections on Revenues and Funds
    • At least 6 states (Calif., Del., N.H., Pa., Tenn. and Wis.) explicitly prohibit diversion or transfer of transportation dollars
    • Dedications and prohibitions are not always effective! At least 7 states (Ariz., Fla., Ky., Minn., N.J., N.C. and Wis.) report legislative diversions of transportation funds despite restrictions
    • Some states have a process for diversion:
      • Mont. allows diversion by 3/5 vote of legislature
      • Md. and Va. allow diversion if a plan is provided for repayment within a certain amount of time

Slide 18 : Key Findings: Funding and Finance

  • Innovative finance
    • Tools used to borrow against or leverage traditional funding sources
    • Some--e.g. SIBs and debt financing instruments--require enabling legislation before a DOT can use them
    • PPPs and GARVEEs may require additional legislative approval
  • Transportation finance mechanisms: .
    • General obligation or revenue bonds (44 states + DC + PR)
    • GARVEE bonds (33 states + DC + PR)
    • Private Activity Bonds (PABs) (6 states)
    • Build America Bonds (BABs) (25 states)
    • TIFIA federal credit assistance (12 states + PR)
    • State Infrastructure Banks (SIBs) (34 states + PR)
    • Public-private partnerships (PPPs) (authorized in 32 states + PR)
    • Design-build (authorized in 38 states + PR)

Slide 19 : Key Findings: Funding and Finance

  • Other funding and finance topics in the report:
    • Public-private partnerships
    • State aid to local governments
    • Retention of surplus or excess funds
    • Controlling DOT costs
    • Transportation planning -- for example:

Seventy-seven percent of DOT officials surveyed agreed that transportation projects are chosen based primarily on merit, not political, personal or other considerations. Responses from legislators were more divided.

Image: Graph

Slide 20 : Key Findings: Communication and Collaboration

  • State legislators and DOT executives overwhelmingly agreed that regular, open, honest and transparent communication is one of the most important elements of effective transportation governance
  • In practice, communication and collaboration differs significantly across jurisdictions

Slide 21 : Key Findings: Communication and Collaboration

  • Seventy-three percent of DOT officials and 60 percent of legislators surveyed agreed or strongly agreed that the legislature and DOT work together effectively in their state.

Image: Graph

Slide 22: Data Collection and Analysis: Successes

  • Top success: Unprecedented richness and completeness of data
  • Data received from all states, D.C. and P.R.
    • All states, D.C. and P.R. responded to surveys (after reminders!)
    • Substantive fact-checking feedback received from 34 states
  • Meaningful data received for Survey 3 (opinion survey)
    • Anonymous surveying yielded detailed, candid responses
  • It took a village!
    • Between all the surveys and fact-checking responses, more than 200 known individuals in the states contributed to this report

 

Slide 23: Data Collection and Analysis: Successes

  • Top challenge: Data accuracy and consistency
    • Survey respondents from same state sometimes disagreed
    • Survey respondents differed from reputable other sources
    • Decided to include it all and let state experts look for false positives during fact-checking -- but this wasn't perfect either…
  • Challenges in operationalizing concepts
    • What is "state-level transportation funding?"  Federal grants used by states?  Tolls used by state tolling entities for those facilities only?
  • Differences in terminology among states
    • What is an "additional sales tax on fuel"?  It depends!
  • Nuances in terminology
    • "Introducing" versus "drafting" versus "submitting" versus "proposing" versus "requesting" legislation

Slide 24: Data Collection and Analysis: (More) Challenges

  • Scope!
    • A constant challenge -- aided by explicit discussion and Task Force
  • Building a network of the right state contacts
    • Survey process took months longer than expected, partly due to in-state staffing changes and efforts to locate the right expert(s)
  • Labor-intensive data compilation and tracking
    • Survey 1 and 2 format was easiest for respondents, but hard for us
  • Small sample size for Survey 3 (opinion survey)
    • 56 respondents total: 30 legislators and 26 DOT officials
  • Data organization
    • Had to wrestle huge amount of data into comprehensible framework

Slide 25: Data Collection and Analysis: (More) Challenges

  • Data was (and is) a "moving target" .
    • Some state policies were being challenged during our analysis
    • Many last-minute changes
    • Report out of date within weeks of publication
  • Presentation of sensitive state information
    • Carefully avoided potentially negative connotations
    • Fact-checking was to confirm presentation as much as facts
  • True uniqueness of states
    • Apples and oranges problems, e.g. state DOT budget data
    • Not all questions were relevant to all states, causing some confusion
    • States couldn't be grouped, despite early expectations

Slide 26: Opportunities for Collaboration

  • How can the transportation librarian and information management community help us?
    • Data collection and review
    • Additional fact-checking of this report (esp. for second printing)?
    • Potential future updates of the data?
    • Pertinent data related to any of our products that you come across!
  • Data dissemination
    • NCSL and AASHTO product numerous transportation publications and other resources -- how can we work together with you to get them to the professionals who need them most?
  • How can we help you?
  • Sharing resources? Other? You tell us!

Slide 27: Questions and Answers
Joung Lee
AASHTO Center for Excellence in Project Finance
Phone: 202-624-5818
jlee@aashto.org

Jaime Rall
National Conference of State Legislatures
Phone: 303-865-1417
jaime.rall@ncsl.org

Slide 28: Contact Details and Resources
Resources