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State Highway Fund revenue forecast falls (again)
09/06/2011
With weak economic growth bedeviling efforts to climb out of the Great Recession, the State Highway Fund’s revenue forecast once again shows weaker collections of gas tax, weight-mile tax, and driver and vehicle fees than previously forecast.
 
The June 2011 revenue forecast projects that all of the State Highway Fund’s revenue sources will be down over the next several years. In the 2011-13 and 2013-15 biennia, the combined loss of revenue compared to the last forecast is $110 million—a reduction of a little more than 2 percent from previous expectations.
 
Each revenue forecast since 2008 has shown reduced levels of expected State Highway Fund resources. With this reduced forecast, net highway revenue available to ODOT (after paying debt service and collection costs and transferring funds to local governments) is now essentially the same as was projected in 2008—even though the Legislature added significant new resources with the Jobs and Transportation Act (JTA). The majority of the JTA’s new resources will go to service the bonded debt issued to pay for projects specified by the Legislature in the JTA. The portion of ODOT’s new JTA resources that were not allocated to projects will backfill the loss of resources due to the slower economy. As a result, ODOT’s discretionary resources for new projects are very limited, particularly with the potential for significant reductions in federal funding.
 
Projected JTA revenues for state fiscal year 2012 are down 7.1 percent from the original forecasted level of $297.6 million to $276.4 million. This decline will reduce the anticipated funding for local governments next year by $10.6 million and for ODOT by a similar amount.
 
The lower revenue forecast, combined with the very real prospect of a significant cut in federal funding, may require ODOT to rebalance the 2012-2015 Statewide Transportation Improvement Program (STIP) by delaying or cutting projects.
 
The revenue forecast is available online.