Forecast Council adopts June transportation revenue forecast citing high fuel prices and 2026 law changes

The Forecast Council voted to accept an updated transportation revenue forecast on June 22 after staff warned higher fuel prices and recent state law changes would modestly reduce near-term receipts.

Ed, an ERC presenter, told members this was the council's June update and that the largest near-term risk is higher fuel prices following the start of the Iran war in late February. "This chart shows regular gas prices in Washington. . . these are the highest prices we've ever seen," Ed said while walking through the forecast inputs and the economic assumptions underpinning revenue models.

The presentation drew on updated economic indicators and inputs from Department of Licensing, State Patrol, DOT and ERC staff. Ed said the February-to-April inflation figures showed local CPI rising to 4.9% in April, with roughly one percentage point attributable to energy, and that those higher fuel costs reduce household discretionary spending and, in turn, fuel-tax consumption.

Members questioned how much of the expected revenue change could be isolated in the data. Chair asked for the lag and quality of consumption information; staff replied that distributors file monthly and that the council typically sees prior-month data, but that a recent DOL accounting system change made short-run measurement challenging. "DOL has spent a considerable amount of time and money to go through their system top to bottom," Ed said, adding that ERC has already revised the forecast to reflect expected corrections.

Ed summarized the numeric impacts: the gasoline consumption forecast was lowered by about $54,000,000 for the current biennium, special fuels (diesel) were up roughly $5,900,000, producing a net fuel revenue decline of about $47.8 million. Overall state revenues were estimated to be down about $36,000,000 (0.4%) in the current biennium; statutory changes to Climate Commitment Act receipts and transfers drove larger declines in later biennia.

On federal funding, Ed flagged uncertainty tied to the Infrastructure Investment and Jobs Act expiring in September and said staff currently model a short-term extension as the baseline. Several members pressed that congressional action could change the out‑year picture, and one member called the federal forecast assumption "a bit pessimistic" compared with their expectations.

After brief discussion and clarifying questions about vehicle registrations and EV trends, the Chair called for a motion to accept the forecast. The motion was moved, seconded and adopted by voice vote. The council adjourned following the vote.

The council's action accepts the updated revenue path as the staff baseline; members noted the forecast will be revisited as DOL reporting stabilizes and as Congress acts on federal transportation authorization.