Joint Fiscal: T Fund revenues modestly above forecast but buying power has declined

Logan, a Joint Fiscal Office analyst, told the Senate Transportation Committee on Jan. 7 that fiscal 2024 transportation fund revenues closed modestly above expectations and that purchase-and-use receipts were a key driver.

"FY 24 close, T fund revenues exceeded forecast by about $3,600,000," Logan said, adding that the year ended with about $9,800,000 in balance that was rolled into the FY25 budget.

The report matters because the committee uses revenue forecasts to set appropriation levels and to evaluate longer-term funding options. Logan said the five-year projection shows only 1.44% total growth for the T Fund and cautioned that the fund’s purchasing power is lower than a decade ago when adjusted for inflation.

Logan walked committee members through revenue trends since 2013 and explained the difference between nominal collections and inflation-adjusted purchasing power. He said that while 2024 nominal collections were roughly $303 million, correcting to 2013 purchasing power shows a substantial erosion. "If you correct those numbers for inflation ... you'll see that in terms of purchasing power the T Fund has declined and is predicted to continue to decline," he said.

Committee members pressed staff on specific drivers and policy choices. Chair Rich Westman said he wanted future discussions to dig into underlying drivers: "What we really wanted to get into going forward is what's behind each of these," Westman said, noting purchase-and-use tax volatility and sensitivity to recessions.

Lawmakers asked for follow-up detail that Logan offered to provide: a comparison showing what vehicle- and DMV-fee revenues would have looked like without the 2023 DMV fee increases (effective Jan. 1 of the most recent year), a full list of the smaller fee categories included in "other revenues" (jet fuel, overweight permitting, inspection fees and the like), and a TIB bond (transportation infrastructure bond)–specific analysis. Logan said he would supply the requested breakdowns and the history of statutory transfers into and out of the T Fund.

Members also discussed fund transfers that reduce net availability for capital programs. Committee members asked staff to list routine statutory transfers and one-time transfers and to show where T Fund money has been committed for federal matches or other non-T Fund uses.

The Joint Fiscal Office presentation made three quantifiable points the committee recorded: FY24 ended about $3.6 million above forecast; the FY24 ending balance rolled to FY25 was about $9.8 million; and through December of FY25 the T Fund was about $4.2 million above the current forecast (Logan cautioned that this covered only half the fiscal year).

The committee asked for more granular follow-up on (1) how much of purchase-and-use tax collections go to the T Fund (Logan said two-thirds of those collections are treated as transportation receipts and one-third goes to the education fund), (2) how statutory stabilization/reserve rules operate (committee requested exact statutory text on the 5% reserve), and (3) the list of transfers that reduce the T Fund the committee should consider when evaluating match availability for federal grants.

The Joint Fiscal Office presentation set the stage for a second AOT presentation that focused on projected needs and alternative revenue approaches. Committee members directed staff to provide the additional data and to return with more detailed fund-flow tables and TIB-specific figures.

Ending: Committee members scheduled follow-up briefings to reconcile the revenue trends Logan presented with AOT’s budget and project lists so the legislature can better understand which state revenues are legally or practically available for federal matches and capital programs.