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Fiscal Constraint

Fiscal Constraint. 2008 FHWA - Environmental Conference James Cheatham, Director Office of Planning June 17, 2008. HISTORY. 1991 ISTEA created fiscal constraint TEA-21 & SAFETEA-LU tweaked it Planning Rule published February 14, 2007. Fiscal Constraint. Applies to:

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Fiscal Constraint

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  1. FiscalConstraint 2008 FHWA - Environmental Conference James Cheatham, Director Office of Planning June 17, 2008

  2. HISTORY • 1991 ISTEA created fiscal constraint • TEA-21 & SAFETEA-LU tweaked it • Planning Rule published February 14, 2007

  3. Fiscal Constraint Applies to: • Metropolitan Transportation Plan (MTP) • Transportation Improvement Plan (TIP) • Statewide Transportation Improvement Program (STIP) • But not Statewide Plan

  4. Federal Projects • STIP/TIP • Metropolitan Plan • Statewide Plan

  5. Current Financial Challenges • Funding • Partially Funded Projects • Innovative and Private Funding Ventures

  6. Reauthorization • SAFETEA-LU expires September 30, 2009 • Potential shortfall in the highway trust fund in the last year (FY-2009) of up to 16.0 billion. $43.4 billion vs. 24.7 billion, a shortfall of 36% (AASHTO)

  7. Financial Status of the States • Revenue is stagnant or declining due to inflation • Federal gas tax last increased 1993, most states not raising their taxes • Able to do fewer projects • Project cost increases and escalation has been a problem • Concern about postponing some projects due to funding shortfalls

  8. Innovative Financing Increased use of innovative financing to fill the funding gap - • PPPs (Public Private Partnerships) • PABs (Private Activity Bonds) • TIFIA • GARVEE/GAN • SIBs (State Infrastructure Banks) • Tolls and congestion pricing • Bonding

  9. Year of Expenditure • After December 11, 2007, amendments or updates to plans, TIPs, and STIPs triggers YOE requirement • YOE requires the DOTs and MPOs to account for cost escalation • Revenues may not be growing as fast as project costs, may have to take some projects out of the plan and the program

  10. For More Information • Harlan Miller Office of Planning (202) 366-0847 Harlan.Miller@DOT.GOV • John Humeston Office of Planning (404) 562-3667 John.Humeston@FHWA.DOT.GOV

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