Forecasting Transportation Revenue Sources: Survey of State Practices (2015) / Chapter Skim
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9 FEDERAL HIGHWAY REVENUE FORECASTING Because many states incorporate estimates of transportation revenues from the federal government into their own forecasts, and because the procedures used to forecast revenue by the federal government are of general interest to those in the states making similar forecasts, the authors queried the FHWA on its revenue forecasting procedures. The FHWA Office of Transportation Policy Studies developed and maintains a Highway Revenue Forecasting Model (HRFM)
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10 that short-range forecasts were created by applying subjective judgment to the interpretation of more formal long-range forecast results. Thirty-one (31)
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11 These include per-gallon gasoline and diesel excise taxes and ad valorem sales taxes levied on fuel. Forty-three (43)
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12 models, including econometric regression analysis. It is important to note that few states use one method exclusively.
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13 forecast for that particular revenue source. Each revenue source might have its own set of regression equations.
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14 fuel consumption levels rather than using historical economic data as independent variables. The new model operates using an ARIMA model that is better able to account for seasonal variables that affect fuel consumption.
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Source: Minnesota's DOT 2014 Transportation Funds Forecast 2014. TABLE 5 MINNESOTA'S FUEL CONSUMPTION INPUTS, 2013–2017 Case Example: Oregon Over 200 stochastic equations comprise Oregon's DOT (ODOT')
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16 Minnesota's DOT uses these inputs for its five-year (2013– 2017) forecasts.
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17 Texas "Overall state revenue forecasts have proved to be accurate within ±5% over the last seven years. However, their forecasts of motor fuel tax and registration fees have been much more accurate." Arizona "ADOT has a very robust forecasting process that has been in place since 1992, which has proven highly accurate in all but the most volatile of economic environments." Iowa "Our forecast amounts vs.
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18 Type of Change State Providing Response Half-cent sales tax AR Increase in petroleum transfer fee ID Increases to the state excise taxes IA Gas tax increases MN, ID Increased motor vehicle sales taxes MN Increased vehicle registration taxes and fees MN, ID TABLE 10 CHANGES IN REVENUE SOURCES RESPONDENTS WERE ASKED TO EVALUATE New Revenue Source Evaluated State Providing Response A dedicated regional transportation tax passed in three regions of the state which fund transportation improvements within the counties and cities throughout the regions GA Various bonding proposals MN Indexing the fuel tax IN Turnpike Revenue Bonds OH Application of a sales tax on the price of fuel IA Transfer of general funds to transportation IA Appropriating a set dollar amount of the state's general fund to transportation progra ms IN Appropriating a % of state sales tax for transportation program funding IN Electric/hybrid car fee ID Rental car fees ID Increased dyed diesel enforcement ID Increase in sales tax by 1% with proceeds directed to highway account ID Transfer of 4.5% sales tax on motor vehicle goods to highways (unsuccessful) AR Passage of increase in tax on LPG and CNG (unsuccessful)
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