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Motor Fuels Tax Revenues <br /> The Central Services Division-Financial regain strength in the next biennium, <br /> Services Branch collects fuel tax revenues. increasing by nearly 6 percent or about $50 <br /> Fuel tax collections are shown in Table 6. The million. <br /> fuel tax revenue forecasts continue to be <br /> acceptably accurate, despite the price Collection and program administration costs <br /> volatility in petroleum markets of the past stay largely invariant over the forecast <br /> four years. while actual revenues versus horizon, so net fuel tax revenues to the State <br /> forecast revenues for the past several years Highway Fund exhibit largely the same <br /> have been typically within about plus/minus 1 pattern as gross revenues. <br /> <br /> percent, the disparity is starting to magnify <br /> with the economic and financial turbulence. With an average annual base of <br /> approximately $448 million over the forecast <br /> Unlike for DMV and MCTD transactions, interval out through FY15, fuels tax <br /> <br /> there have been no changes to the tax rates for collections generate the single largest amount <br /> gasoline and use fuels (largely diesel). of revenue for the Highway Fund, some 46 <br /> Therefore, the revenue outlook mimics percent before collection and program costs. <br /> closely the fuel consumption forecast laid out Each penny of gas tax generates about $18.7 <br /> above, with the important caveat that the million gross and $18 million net per year in <br /> latter was stated in terms of calendar years in fuel tax revenue through this forecast horizon. <br /> order to correspond more closely with the The same penny of tax plus its weight-mile <br /> narrative on the state and national economic equivalent produces on average about $29.5 <br /> backdrop. million gross and $28.5 million net a year. <br /> The current forecast shows a drop off in fuel It is important to recognize the predictive <br /> <br /> tax revenue from the prior forecast. In year capability of the foregoing "yield" results <br /> FY09 it is $25 million lower, and beyond, it is from gas taxes and weight-mile levies. They <br /> roughly $3 to $15 million per year lower. On are averages and are based on a 1-cent <br /> average, this is a reduction of about 2.5 increase only. For tax increases larger than <br /> <br /> percent, despite the impacts stemming from one cent per gallon (say, for example, 5 cents <br /> <br /> the implementation of HB 22105 that helped or more), price elasticity effects are likely to <br /> <br /> to buoy our last forecast. Fuel tax revenues cause a diminution in revenue yield. Direct <br /> <br /> then increase at a slightly stronger rate of analysis on a case by case basis is strongly <br /> about 2.3 percent on average out through suggested over applying "rules of thumb" in <br /> FY15, due to the continued, albeit slowing, these instances. <br /> economic growth prospects for the state and <br /> <br /> the boost from ethanol blend requirements. <br /> In the current biennium, gross revenues are <br /> forecast to be down minutely, at about 0.7 <br /> <br /> percent lower, or a little more than -$5.6 <br /> million, from the 2005-07 biennium. This is <br /> somewhat weaker than our prior projection. <br /> Going forward, revenue growth is forecast to <br /> 5 See the full discussion of this legislation in the motor <br /> fuels transaction forecast on page 8 above. <br /> 19 <br /> <br />