OFM Fiscal Impact Statement I-912

Analysis Prepared by Office of Financial Management for Secretary of State's Voter Pamphlet, September 2005

Fiscal Impact Statement for Initiative 912

Initiative 912 would over 16 years eliminate $5.475 billion in fuel taxes and net bond proceeds, eliminating 80 percent of funding for 265 new transportation projects specified by the Legislature.  About $562 million in fuel tax revenue for cities and counties – for new, local-government transportation projects over 16 years – also would be eliminated.

Assumptions for Fiscal Analysis of Initiative 912

The initiative repeals the phased-in, 9.5 cents-a-gallon increase in the state gasoline tax that is scheduled as follows: 3 cents a gallon on July 1, 2005; 3 cents on July 1, 2006; 2 cents on July 1, 2007; and 1.5 cents on July 1, 2008.  The initiative does not affect scheduled increases in the state tax on diesel fuel.

Over 16 years, the gasoline tax increases would generate $4.434 billion plus $1.041 billion in net bond proceeds – or 80 percent of the cost of 265 new transportation projects specified by the Legislature.

Eliminating the scheduled gasoline tax increases also would eliminate $562 million that cities and counties would have received over the next 16 years for local transportation projects.  This revenue includes $482 million that cities and counties would  receive as direct revenue distributions from the gasoline tax increases, as well as $80 million in grants to local government.