FISCAL NOTE
Date Requested: January 18, 2023
Time Requested: 10:41 PM |
| Agency: |
Transportation, WV Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1815 |
Introduced |
HB2581 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
State Road Fund
Sources of Revenue:
Special Fund
Legislation creates:
Decreases Existing Revenue, Decreases Existing Expenses
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.
With proposed House Bill 2581, should the amount of motor fuel tax revenue be reduced by 50%, the impact to the West Virginia Division of Highways (DOH) would result in a loss of approximately $215M to $220M of revenue on an annual basis
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
-215,000,000 |
-22,000,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
-215,000,000 |
-220,000,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
-215,000,000 |
-22,000,000 |
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 revenue to fund the day-to-day operation of our organization. Should the DOH begin to experience significantly reduce fuel tax revenue, our programs would be greatly affected. The revenue reduction would impact our ability to purchase new and maintain our existing equipment fleet. In addition, our road maintenance operations would have to be reduced. This could be achieved by a couple of different methods. DOH could completely eliminate the work we currently by out to our contracting work we put out for contract and the amount of work completed by our DOH forces. Furthermore, should we have a harsh winter, all of our available resources could potentially be used to keep the roads clear which may result in not having anything additional 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 stated the average motor fuel tax revenue collected per year is not adjusted to compensate for increased costs due to inflation. At a modest 2% inflationary growth rate, $450M of fuel tax revenue would need to increase by approximately $10M per year simply to remain flat. Finally, should there not be another source of revenue to backfill the deficit this bill would create, 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: Lorrie Hodges
Email Address: lorrie.a.hodges@wv.gov