Last week, the Office of Financial Management (OFM) released its quarterly transportation revenue forecast. Unlike the Economic
and Revenue Forecast Council’s forecast, the transportation revenue forecast indicates
significant revenue loss and a slow, sluggish recovery.
OFM projects the 2019-21 biennium revenue to be roughly $6 billion, which is down roughly 5.5% biennium to biennium due to the impacts of lower demand caused by the pandemic. The projected revenue collections for the 2019-21 biennium is roughly 1.6% lower
than the November 2020 baseline forecast, largely due to the Governor’s Stay Home, Stay Healthy updated restrictions. Those restrictions were realized most dramatically by fuel tax revenue.
Projections for the 2021-23 biennium are anticipated to be $6.6 billion, a decrease of $220 million over the last forecast. The state continues to anticipate significant decrease in fuel tax revenues and projects that gasoline consumption will continue
to stay below the February and November 2020 projections through 2031. The projections only account for pandemic-related impacts; they do not include the anticipated decrease of reliance on gasoline and fossil fuels through the next ten years.
Other major impacts to the transportation revenue forecast include decreased revenue from ferry fares, toll collections, and rental car tax. For 2020 collections, these sources are all down between 16 and 17%, and account for approximately $80 million
of lost revenue for 2020.
OFM projects higher retail and e-shopping employment than November’s forecast but an overall decrease in non-agriculture employment (likely due to a drop in aerospace and related employment). It also projects a small personal income growth for 2021
but expects that to decline next year from a result of stimulus money ending. Further, the impacts of the American Rescue Plan of 2021 are yet to be realized for the quarterly forecast, and future projections do not account for potential personal
income growth caused by federal stimulus legislation.
The economic conditions captured in the OFM report only further support the need for a state transportation revenue package. Four separate transportation revenue package proposals are currently circulating the Legislature—they include a mixture
of carbon-related revenues, fuel tax increases, various increases to vehicle weight and user fees, and transportation-related sales and use tax increases.
AWC is supportive of a comprehensive transportation revenue package that addresses the critical need for local transportation maintenance and preservation, a watershed approach to fish barrier removal projects, and increased local options for cities to
sustainably fund basic transportation infrastructure projects.