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FOREWORD <br /> This summary report presents a selection of Other httpa/www.Oregon.gov/ODOT/CS/EA/reports.sht <br /> Funds Revenue forecasts for the Oregon ml and scroll down to "Transportation Revenue <br /> Department of Transportation. It is published Forecasts." <br /> twice a year to assist planners and policy-makers <br /> in their formulation of budgets and to support Questions and comments should be directed to: <br /> other decision-making activities. The forecast is David C. Kavanaugh, Ph. D. <br /> consistent with the Department of Administrative Chief Economist <br /> Services' Oregon Economic ~ Revenue Forecast Financial and Economics Analysis <br /> (Vol. XXVIII, #2, June 2008) and the associated ODOT Financial Services <br /> baseline macroeconomic forecast from Global (503) 378-2880 <br /> Insight Inc. (GII). 550 Capitol Street NE <br /> Salem, OR 97301 <br /> This document is also available online at: Email: david.c.kavanau~h(a,odot.state.or.us <br /> On the Cover: <br /> Since the December 2007 forecast, the economies of both Oregon and the nation have hit rocky <br /> patches. Slowing economic growth and job losses have taken a toll on the forecast for gross State <br /> Highway Fund revenues, as well. <br /> As the cover chart illustrates, projected gross revenues for the State Highway Fund are considerably <br /> lower than previously forecast. These reductions in overall forecast revenues range from $45.7 <br /> down to $11.7 million per fiscal year, with the largest reductions occurring unfortunately during <br /> FY09 and FY10. <br /> The declines in forecast revenues are not spread equally among the three sources of State Highway <br /> Fund revenues. Driver and Motor Vehicle (DMV) revenues show the smallest decline as a percent <br /> of revenue, averaging about 1.7 percent lower per fiscal year. This muted response of DMV <br /> revenues to the changing economy occurs because DMV revenues are driven primarily by <br /> demographics rather than the pace of economic activity. On the contrary, Motor Carrier and Motor <br /> Fuels revenues are much more responsive to economic activity and show larger declines in forecast <br /> revenues, averaging 5.0 and 2.6 percent lower per fiscal year, respectively. <br /> Finally, an idea of the overall accuracy of the forecast model is accessible by focusing on the <br /> column reported for FY08. The composite difference from the December 2007 forecast for FY08 <br /> essentially represents a look at the one-year-ahead forecast error for our model. The combined over- <br /> prediction of $13.3 million compared to a gross revenue level of $900 million is quite small, being <br /> <br /> just 1.5 percent in relative terms, which is quite good in terms of forecast precision. <br /> 1 <br /> <br />