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Published on Friday, September 11, 2015

Technical error in transportation package will delay some distributions to cities

One of the highlights of the 2015 legislative session was the passage of a new transportation package that includes many provisions helpful to cities, including new direct distributions of gas tax revenues and “multi-modal funds”. The revenues for the multi-modal distributions are derived primarily from license and weight fees. This is the first time that cities will receive direct distributions from a transportation revenue source other than the gas tax. That’s the good news. (For any finance staff/accountants reading this, there will be a new BARS code for these multi-modal funds.)

Unfortunately, through an oversight, the multi-modal funds for local governments were not appropriated in the transportation budget and therefore cannot be distributed yet. The package and the budget consist of a number of bills, and trying to fit all of the pieces together is confusing. The first distribution was scheduled to take place at the end of this month, and then quarterly going forward.

The Office of Financial Management (OFM) has consulted with legislative staff, and they agree this was a technical error. OFM will propose the fix in the 2016 transportation supplemental budget, and when it gets enacted, the distributions will begin. Our understanding is that money that would have been distributed in September and December of 2015 will be included in 2016 distributions.

The bottom line is that cities will be getting additional gas tax distributions starting with the first distributions at the end of this month. But distributions from the multi-modal account won’t start until sometime in 2016.

To see estimates of how much new revenue in direct distributions your city is projected to receive over the next 16 years, click here. Of those distributions approximately 53% will come from the multi-modal funds and 47% from gas tax revenues.

Categories: Transportation