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EXECUTIVE SUMMARY <br /> Fund revenues that are linked to the pace of <br /> As has been chronicled in headlines economic activity (fuel and weight-mile taxes <br /> nationally, Oregon's economy also appears to largely), the impacts are pronounced <br /> be confronting very significant headwinds. compared to the prior forecast in June 2008: <br /> The string of 19 consecutive quarters of job <br /> gains ended in the second quarter of 2008, a 4 • Motor fuels usage taxes are lower on <br /> 3/4-year span going back to the third quarter of average by $17.4 million per year over the <br /> 2003. This pales, somewhat unfortunately, to FY09-FY15 period; almost 4 percent <br /> the very long-lived boom covering 39 lower than before. Ethanol blending in <br /> consecutive quarters that occurred in the 1991 gasoline props revenues up a bit, <br /> <br /> - 2000 period. otherwise the drop off would be worse. <br /> In the macroeconomic backdrop used for this . Weight-mile use taxes decline on average <br /> forecast, weak job markets nationwide are by nearly $16 million annually; about 4.8 <br /> expected to endure for at least eight quarters percent lower than in the prior forecast. <br /> through the fall of 2009. Having been in <br /> decline since December 2007, this will mark For fee revenues not tied as closely to the <br /> one of the most severe recessions in the post- usage rates on the highway and roads system, <br /> war period. the revenue impacts are slightly more muted: <br /> Oregon's economy, while a little late to the . DMV yearly revenues are down on <br /> current "recessionary party," tends to swing average by $8.4 million per year, or about <br /> somewhat more than the national economy in minus 3.7 percent from the previous <br /> both downturns and upturns. Thus, our job forecast. It is noteworthy that with the <br /> losses are now expected to be far more than depressed new car market, new titles and <br /> proportional to those incurred nationally. new registration fee revenues are <br /> However, in the recovery phase, our job reflecting more sensitivity to the economy <br /> markets are also somewhat more resilient. than has routinely been the case for the <br /> Unless net-migration into the state is past several decades. <br /> materially affected by the current economic <br /> malaise, these patterns are expected to be After dipping in FY09 from FY08 (about a 4 <br /> preserved. percent decline), gross revenues are projected <br /> to grow at an annual average rate of 2.5 <br /> Presumably with the effective implementation percent out through FY15, as the Oregon <br /> of economic stimulus initiatives and j udicious economy regains its projected longer-run <br /> monetary policies/coordination, the state's growth path. <br /> economic and job growth should get back on <br /> track in the 2010 timeframe. The outlays and investment spending by <br /> ODOT that are necessary to maintain, <br /> As we would expect, a sharp economic preserve, and modernize the State Highway <br /> downturn in jobs and real personal incomes System will not materially change with <br /> does not bode well for the outlook for weaker travel demands going forward, <br /> transportation revenues. For those Highway however. With these costs being largely fixed, <br /> 1V <br /> <br />