The Oregon Department of  Transportation (ODOT) has released an update to the ODOT Revenue Forecast, which presents a selection of forecasts for state transportation revenue. It is published twice a year to assist in financial planning, the formulation of transportation budgets, and to support other decision-making activities.

Revenues are projected to rebound in 2021 through 2023 as the economy recovers from the COVID-19 pandemic. ODOT has increased its forecast for the State Highway Fund (SHF) by 1.94 percent on average across all counties since its October projection. A slower recovery in motor fuels is offset by stronger growth in Driver and Motor Vehicles (DMV) and Commerce and Compliance Division (CCD) revenue. Keep Oregon Moving HB 2017 (2017) will provide on January 1, 2022, a conditional fuels tax increase of $0.02 per gallon.

The forecast, which uses the estimates released in April of 2021, includes both the regular formula allocation and the small county allotment.

Timber Receipts

The United States Forest Service (USFS) estimates are based on 25 percent timber receipts (1908 Act 25-percent payments) from federal FY 2018 and county FY 2019, which is the most recent data released by the USFS. The payments for the county FY 2022 are estimates based on averages used to fill in the gaps, counties may wish to consider this when creating budgets. Most counties only receive USFS receipts if Congress does not reauthorize Secure Rural Schools payments, so this would represent the minimum budget option.

Secure Rural Schools
The Secure Rural Schools (SRS) Act payments for FY 2022 are not included in the county totals because Congress has not taken action to reauthorize the program. The estimates are included for reference, assuming the program will be reauthorized at the typical 5 percent decrease from the previous year. The National Association of Counties (NACo) and the Association of Oregon Counties (AOC) continue to advocate for county road departments and county infrastructure needs for SRS reauthorization in the U.S. Senate (S. 435) and House (H.R. 2099).

Surface Transportation Block Grant/ State Fund Exchange

Surface Transportation Block Grant (STBG) estimates were calculated differently this year. The actuals for FY 2021 were about $2 million higher than typical allocations, which may be an outlier and not sustainable given historical allocations. A more conservative approach was used to estimate FY 2022 payments, taking an average of the previous four-year payments (FY 17-20) to estimate the total allocation for FY 2022, which makes it almost even with 2020 actuals.

Forecasting Uncertainty and FY 2021-22 Outlook

With the ongoing pandemic, economic recession, and political dynamics, there is uncertainty in both SHF and federal funding forecasting at this time. This FY 2021-22 forecast represents a conservative baseline county funding model estimate approach for dedicated funding budget planning purposes. With the Fixing America’s Surface Transportation (FAST) Act  set to expire on September 30, 2021, Congress is currently negotiating a five-year, comprehensive surface transportation reauthorization bill in addition to considering reauthorization of SRS, and other priorities.

AOC will continue to provide updates on current FY 22 estimates.

Detailed information on the revenue streams can be found here. Additional information can be found here.

Contributed by: Jordan Cole | County Road Program Policy Analyst