Economic Forecasts (7)
Description:
Several economic forecasts are needed for RUC financial modeling, including vehicle miles traveled, fuel consumption, fuel efficiency, and growth in the total number of vehicles. Some of these forecasts may already be computed by the state, but they may need to be checked for reasonableness before being used for RUC.
Details:
Many states regularly complete vehicle miles traveled and fuel consumption forecasts. Fuel efficiency is generally not forecasted, but it can be computed by combining vehicle miles traveled and fuel consumption forecasts. Fuel efficiency has been trending upward for several years, and that increase shows no sign of stopping, so the fuel economy forecast should align with trends. Forecasts of growth in the total number of vehicles, aggregated by engine type, may be derived from national forecasts. Forecasting procedures vary by state, and state economists generally perform state forecasts using aggregate data collected from various state sources.
Primary Use:
Generate base data for revenue modeling tools.
Best Practices/Lessons Learned:
- Vehicle miles traveled and fuel consumption, taken together, can be used to generate a reasonable fuel efficiency forecast that, at a minimum, is trending in the right direction (increasing).
- Follow best practices in economic forecasting.
- Make sure forecasts are reasonable, considering industry and national trends.
State Government Context and Assumptions:
Economists at the department of transportation, department of revenue, and/or department of motor vehicles typically have the data needed to calculate economic forecasts. For interstate motor carrier forecasting, the International Fuel Tax Agreement Clearinghouse and the International Registration Plan Data Repository contain current and historical mileage and fuel reporting.