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Board of Equalization action raises gas excise tax estimate; CTC reviews fund-estimate assumptions for 2014 planning
Summary
Caltrans staff told the commission March 5 that the Board of Equalization’s annual price-based excise true-up raised the excise estimate by 3.5 cents per gallon, increasing projected revenue by roughly $525 million and improving expected STIP programming capacity for 2014.
Commission staff updated the California Transportation Commission on March 5 about major assumptions for the 2014 fund estimate and flagged a Board of Equalization decision that will raise projected fuel excise receipts and program capacity for the coming year.
Key points: Steven Keck (Caltrans) reviewed three revenue scenarios the department considered for state fuel and vehicle-related revenue: a “flat line” scenario, an “immediate recovery” scenario, and a middle ground that accounts for growing vehicle miles traveled tempered by improving fleet fuel efficiency (federal CAFE standards and anticipated alternative-fuel penetration). The department recommended the middle-ground forecast as the most policy-consistent option for the fund estimate.
Board of Equalization adjustment: Keck and department staff told commissioners the State Board of Equalization on March 4 completed the annual true-up for the price-based excise tax swap and set the price-based excise rate up by 3.5 cents per gallon effective July 1. Keck said that change would generate roughly $525 million more in revenue for the coming year, with about 44% flowing to local agencies and about $60 million retained by the state for the State Highway Operation and Protection Program (SHOPP). The department will revise fund-estimate numbers to reflect the BOE action when it prepares the final estimates.
Federal and policy context: Department staff noted uncertainty in the federal outlook pending MAP-21 reauthorization and rule-making, and warned that sequestration and the federal continuing resolution timelines could affect certain program lines, including new-start federal transit initiatives. Staff asked commissioners for feedback on assumptions (economic recovery pace, federal allocation levels, and whether to assume a one-time transfer from the Motor Vehicle Account to the State Highway Account as required by current law but not historically completed). Staff recommended reserving a modest, conservative figure for that statutory transfer because prior transfers have not been made consistently.
Why it matters: A material increase in forecasted fuel excise revenues changes STIP and SHOPP programming capacity and can affect which projects can be advanced into construction. Commissioners directed staff to incorporate the BOE adjustment into updated estimates and to return with final fund-estimate assumptions for adoption at a future meeting.
