Two conversation topics traditionally generate a lot of discussion,
but no solutions weather and taxes. Add to that list
the price of gas.
don't miss by much
Doug Benzon has been forecasting gas tax revenue so
long, his predictions rank alongside fine quartz watches
and tide charts for accuracy. He usually projects two
years in advance as part of the legislative budget process.
The most recent report indicates that revenue collections
through March are two-tenths of a percent below his
forecast while special fuels are two tenths of a percent
above his projection. His forecast was made when Idaho
was in the throes of an economic downturn and long before
the current explosion of gas prices.
Those figures represent fuel sales through February.
Benzon monitors revenue on a monthly basis, but doesnt
become too alarmed about the results, because the departments
budget is based on annual sales.
Transportation department revenue forecaster Doug Benzon
follows the phenomenon from a unique vantage point. Revenue
from fuel sales (including gas and special fuels such as diesel)
is a staple for funding the Highway Distribution Account and
many of ITDs construction projects. At the same time,
Benzons annual forecasts are only marginally connected
to the record-setting prices.
ITD derives its Highway Distribution Account revenues and
construction funds from a fixed gas tax that does not fluctuate
with price. The department collects 25 cents for every gallon
sold, whether the pump price is $1.59 per gallon, or $1.95
per gallon. Those taxes account for 50 percent of the Highway
Distribution Account revenue. Special fuels account for 19
percent, car registrations produce 16 percent of the revenue
and commercial truck registrations 13 percent. Miscellaneous
sources account for the remaining 2 percent.
The price of gas has a bearing on transportation department
revenue only if it reaches a level that forces motorists to
curtail driving. And, at least through March, that hadnt
happened yet, said Benzon.
What he sees in Idaho is a portrait of paradox.
Gas prices are rising rapidly, and motorists grouse every
time they visit a gas station. Yet overall traffic counts
are higher than last year. People continue to drive, despite
prices that are on the brink of $2 per gallon.
Benzon reports that fuel consumption through March was about
1.2 percent higher than for a similar period last year. Basically,
a little better than flat, he says. Memory is
still fresh when the increase was nearly 7 percent from 1998
to 1999, an economic boom period.
Idahoans are driving more efficient vehicles than in the
past, but they havent given up their love affair with
large, thirsty sport utility vehicles and pick-up trucks.
That may speak more to the Idaho lifestyle than anything else.
Idaho is a rural state, with limited public transportation
options in metropolitan areas and very limited alternatives
Consequently, passenger vehicles are critical to overcoming
Idahos open spaces and remain a factor in sustained
consumption. Driving is necessary for jobs, shopping, medical
Even recreation is viewed as a
necessity rather than a luxury.
Research shows that there will be a magical point when
people make major changes, Benzon said.
We just havent reached that point yet.
Idaho drivers hit a significant plateau in 1979-80 when the
price of gas broke through the $1 ceiling. Fuel sales plummeted
by 90 million gallons per year for the next three years, which
had a profound impact on ITDs budget. It took 14-15
years for fuel sales to return to their pre-1979 level.
Eventually, if consumers change their driving habits,
we will notice another impact on the department. When we get
to that point, revenues will begin to fall, which will have
an impact on maintenance, construction and programs.
Idahos rapid population growth has accounted for a
steady, but slow, increase in fuel consumption, providing
a soft buffer from recent price increases.
Much of the population growth has come in the form of young
consumers probably families with two wage earners,
at least two relatively new vehicles (often including an SUV),
and a new home in subdivisions that are removed from the work
place. Commuting to work is an accepted standard. And more
likely than not, the commute is solo one person per
Commuter vans, car pools and other forms of alternative transportation
are becoming more viable and visible options, but thus far,
they havent converted drivers en masse from a preference