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Cities Dodge Severe Decline in Highway Distribution Account Revenue for Last Quarter, But Still See Meaningful Reduction

Posted By Justin Ruen, Thursday, July 9, 2020

The Idaho Transportation Department (ITD) is projecting that revenue to the Highway Distribution Account for the last quarter (April 1 through June 30, 2020) will decline 5.7%, which is a meaningful decrease, but not nearly as bad as ITD and AIC feared with projections of a much more severe reduction. 

The Highway Distribution Account revenue is allocated based on city population, so cities that are not growing will experience more of a decline relative to growing cities.

The severe projections were the result of traffic counts that dropped dramatically during the Stay-Home Order, and while there was a decline in gas tax revenue, there was still decent revenue generated from diesel and other non-fuel tax components of the Highway Distribution Account (vehicle registrations, etc.). 

What does this mean for Highway Distribution Account revenues for the state 2021 Fiscal Year, which started July 1, 2020?  That is still largely up in the air, but it seems likely that there will be an ongoing decrease in gas tax revenue from people continuing to work from home and reduced travel and vacations. 

Based on what we saw last quarter, AIC’s original projection of a 15% decrease for the state FY 2021 is likely too pessimistic.  A reduction in the range of 5 to 10% from the city’s state FY 2020 numbers (July 1, 2019 through June 30, 2020) is probably more realistic.  But, the situation continues to evolve and we will provide updates as new information becomes available. 

 

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