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Motor Fuels Tax Revenues <br /> The Central Services Division-Financial million, from the 2005-07 biennium. This is <br /> Services Branch collects fuel tax revenues. somewhat weaker than our prior projection. <br /> Fuel tax collections are shown in Table 6. The Going forward, revenue growth is forecast to <br /> fuel tax revenue forecasts continue to be regain strength in the next biennium, <br /> reasonably accurate, once the forecasting increasing by nearly 5 percent or about $37 <br /> model is evaluated for misses in the million. <br /> macroeconomic forecast. This is despite the <br /> <br /> price volatility in petroleum markets of the Collection and program administration costs <br /> <br /> past four years. while actual revenues versus stay largely invariant over the forecast <br /> forecast revenues for the past several years horizon, so net fuel tax revenues to the State <br /> have been typically within about plus/minus 1 Highway Fund exhibit largely the same <br /> <br /> percent, the disparity is starting to magnify pattern as gross revenues. <br /> with the economic and financial turbulence. <br /> with an average annual base of <br /> Unlike for DMV and MCTD transactions, approximately $433 million over the forecast <br /> <br /> there have been no changes to the tax rates for interval out through FY15, fuels tax <br /> gasoline and use fuels (largely diesel). collections generate the single largest amount <br /> Therefore, the revenue outlook mimics of revenue for the Highway Fund, some 47 <br /> closely the fuel consumption forecast laid out percent before collection and program costs. <br /> above, with the important caveat that the Each penny of gas tax generates about $18 <br /> latter was stated in terms of calendar years in million gross and $17.3 million net per year in <br /> order to correspond more closely with the fuel tax revenue through this forecast horizon. <br /> narrative on the state and national economic The same penny of tax plus its weight-mile <br /> backdrop. equivalent produces on average about $28.3 <br /> million gross and $27.3 million net a year. <br /> The current forecast shows a drop off in fuel <br /> <br /> tax revenue from the prior forecast conducted It is important to recognize the predictive <br /> in June 2008. In year FY09 it is $11 million capability of the foregoing "yield" results <br /> lower, and beyond, it is roughly $16 to $23 from gas taxes and weight-mile levies. They <br /> million per year lower. On average, this is a are averages and are based on a 1-cent <br /> reduction of 3.9 percent, despite the impacts increase only. For tax increases larger than <br /> stemming from the implementation of HB one cent per gallon (say, for example, 5 cents <br /> 22104 that helps to buoy our forecast. Fuel or more), price elasticity effects are likely to <br /> <br /> tax revenues then increase at a slightly cause a diminution in revenue yield. Direct <br /> stronger rate of about 2.4 percent on average analysis on a case by case basis is strongly <br /> out through FY15, due to the continued, albeit suggested over applying "rules of thumb" in <br /> slowing, economic growth prospects for the such instances. <br /> state and the boost from ethanol blend <br /> requirements. <br /> In the current biennium, gross revenues are <br /> forecast to be down minutely, at about 2 <br /> <br /> percent lower, or a little more than -$17 <br /> 4 See the full discussion of this legislation in the motor <br /> fuels transaction forecast on page 8 above. <br /> 19 <br /> <br />