FISCAL NOTE
Date Requested: January 11, 2024
Time Requested: 08:39 PM |
| Agency: |
Transportation, WV Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1733 |
Introduced |
HB4294 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
State Road Fund
Sources of Revenue:
Special Fund
Legislation creates:
Decreases Existing Revenue
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
This bill would reduce motor fuel tax revenue collected and deposited in the State Road Fund for the Division of Highways by approximately 50%. This would equate to roughly $215-225 million dollars of annual revenue.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
-400,000 |
-215,000,000 |
-220,000,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
-400,000 |
-215,000,000 |
-220,000,000 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
The DOH relies heavily on the Motor Fuel Tax to fund the day-to-day operation of our organization. Should the DOH begin to experience significantly reduced fuel tax revenue, our programs would be greatly affected. The revenue reduction would impact our ability to purchase new equipment and maintain existing equipment. In addition, our road maintenance operations would have to be reduced. This could be achieved by several different methods. We could completely eliminate the work we currently bid out to our contracting community, which would directly impact the economy of the state. Another option would be for the DOH to reduce both the amount of work put out for contract and the amount of work completed by our DOH forces. Furthermore, should we have a harsh winter, all our available resources could potentially be used to keep the roads clear, which may result in not having funding available for repair work later in the year. Additional scenarios would be not having adequate funds to meet our debt service obligations or having to choose between maintaining our roads or not having adequate revenue to fully match our federal highway program.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
It should be noted that the average motor fuel tax revenue collected per year is not adjusted to compensate for an increase in inflation. At a modest 2% inflationary growth rate, $450 million of fuel tax revenue would need to increase by approximately $10 million per year to remain flat. Finally, should there not be another source of revenue to backfill the deficit, the DOH would not be able to adequately maintain our infrastructure and keep our roads and bridges safe for the traveling public.
Person submitting Fiscal Note: Jonathan W Schaffer
Email Address: Jonathan.w.schaffer@wv.gov