FISCAL NOTE
FUND(S):
General Revenue Fund and State Road Fund
Sources of Revenue:
General Fund,Special Fund,Other Fund State Road Fund
Legislation creates:
A New Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to freeze the variable rate component of the motor fuel excise tax for the two thousand nine calendar year and to create a funding mechanism to offset revenue shortfalls in the State Road Fund.
As written, this bill would place a ceiling on the tax yield per gallon associated with the 5 percent Wholesale Fuel Sales Tax in CY2009 at no more than 11.7 cents per gallon (i.e., the rate published in the state register in November 2007). As a result, the estimated potential revenue foregone could be as much as $33.3 million in FY2009 and $46.7 million in FY2010. However, the current official estimate for FY2009 is based upon a tax rate of no more than 11.7 cents per gallon throughout the forecast period. Therefore, the provisions of this bill do not alter the official Motor Fuel Tax estimates.
This bill would also create a new “Motor Fuel Excise Tax Shortfall Reserve Fund” with $40 million transferred from the General Revenue Fund to this fund on or before June 30th 2008. Over a two-year period, monies shall be transferred from the “Motor Fuel Excise Tax Shortfall Reserve Fund” to the State Road Fund for revenue shortfalls within the State Road Fund. Revenue transfers may occur monthly whenever Motor Fuel Tax collections fall short of estimate. Up to $20 million would be transferred to offset monthly shortfalls in CY2008 and the balance may be transferred in CY2009, but no later than January 2010 to offset monthly net shortfalls. Any remaining balance in the “Motor Fuel Excise Tax Shortfall Reserve Fund” would expire as of June 30th 2010. The “Motor Fuel Excise Tax Shortfall Reserve Fund” would provide temporary financial relief to the State Road Fund by offsetting revenue decreases attributable to lower fuel consumption associated with high fuel prices.
There are no additional administrative costs associated with the passage of this bill.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2008
Increase/Decrease
(use"-") |
2009
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
As written, this bill would place a ceiling on the tax yield per gallon associated with the 5 percent Wholesale Fuel Sales Tax in CY2009 at no more than 11.7 cents per gallon (i.e., the rate published in the state register in November 2007). As a result, the estimated potential revenue foregone could be as much as $33.3 million in FY2009 and $46.7 million in FY2010. However, the current official estimate for FY2009 is based upon a tax rate of no more than 11.7 cents per gallon throughout the forecast period. Therefore, the provisions of this bill do not alter the official Motor Fuel Tax estimates.
This bill would also create a new “Motor Fuel Excise Tax Shortfall Reserve Fund” with $40 million transferred from the General Revenue Fund to this fund on or before June 30th 2008. Over a two-year period, monies shall be transferred from the “Motor Fuel Excise Tax Shortfall Reserve Fund” to the State Road Fund for revenue shortfalls within the State Road Fund. Revenue transfers may occur monthly whenever Motor Fuel Tax collections fall short of estimate. Up to $20 million would be transferred to offset monthly shortfalls in CY2008 and the balance may be transferred in CY2009, but no later than January 2010 to offset monthly net shortfalls. Any remaining balance in the “Motor Fuel Excise Tax Shortfall Reserve Fund” would expire as of June 30th 2010. The “Motor Fuel Excise Tax Shortfall Reserve Fund” would provide temporary financial relief to the State Road Fund by offsetting revenue decreases attributable to lower fuel consumption associated with high fuel prices.
There are no additional administrative costs associated with the passage of this bill.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us