Translate[Archived] Question #58: What would be the impact of lowering the TIP reservation to 1.5 cents, instead of 2.2?
Question:
What would be the impact of lowering the TIP reservation to 1.5 cents, instead of 2.2?
Response:
Lowering the Transportation Improvement Program (TIP) reservation from 2.2 cents to 1.5 cents would reduce funding by $2,698,143 in FY 2018 from $8,479,878 to $5,781,735 and reduce funding by $26,845,770 in FY 2019 through FY 2027 from $84,372,421 to $57,526,651. Currently, the TIP funds capital improvements of 1.0 million, operating costs of $8.0 million, and 0.6 million in debt service on General Obligation Bonds issued in FY 2013. If Council decides to lower the reservation to 1.5 cents these expenditures would need to be reduced as shown in table below.
The Northern Virginia Transportation Authority, through HB 2313, has two required spending thresholds for jurisdictions. The first requires that localities either set a 12.5 cent Commercial & Industrial (C&I) tax for transportation, or include an “equivalency transfer” for transportation projects equal to that amount. The City’s threshold for this requirement in FY 2016 was $11.3 million.
The second requirement is the annual Maintenance of Effort (MOE)
threshold. Specifically, the MOE requires the City to continue to spend at or
above total transportation spending levels from the baseline year of FY 2013.
This equates to a $34.7 million minimum threshold for spending on
transportation purposes, excluding grants, bonds, and debt service payments.
The City met this requirement in FY 2016 by spending a total of $36.5 million. If
there had been a reduction of $2.6 million of TIP spending in FY 2016, the City
would not have met the MOE threshold. Not meeting the MOE would put the City in
jeopardy of losing its NVTA funds, which exceeded $7 million in FY 2016.
Planned sources and uses in the FY 2018 proposed operating budget and FY 2018 – 2027 proposed Capital Improvement Program (CIP) can be found on pages 11.5 and 11.6 of the proposed CIP.
FY 2018-2027 Proposed CIP Transportation & Transit Summary