High Gasoline Prices Took Bite from State Revenue

By Beacon Staff

HELENA – Last summer’s high gasoline prices caused people to use less gasoline and reduced gasoline tax collections for the state Department of Transportation.

The reduced revenue could delay some road projects across the state.

As gasoline prices topped $4 a gallon, drivers in Montana used 7.6 percent less gasoline in July compared to the same month in 2007. Gasoline use fell 6.1 percent in August and 7 percent in September compared to those months a year earlier.

That translated into less revenue through the state’s 27-cent-per-gallon gasoline tax — money the Montana Department of Transportation counts on for about a third of its $600 million budget.

The trend began when prices topped $3 a gallon, according to Jim Lynch, director of the Montana Department of Transportation.

About 495 million gallons of gas was sold in Montana over the 12-month period ending in June — down by about half a percent compared to the previous year, for a loss of around $600,000 in revenue.

Lynch said the department will have to consider trimming its construction budget, starting with projects that are entirely state-funded and not partly federally funded. Montana typically gets $87 in federal funding for every $13 the state spends on highways.

Lynch said it’s difficult to predict what will happen next with gas tax revenues.

“We’re on uncharted ground now. This is totally unusual,” he said. “This country’s never seen almost $5 gas, and between that and the financial crisis we’re facing, how is that going to play into people’s habits?”

The price of gasoline in Helena recently had fallen to $1.59 a gallon.

Denice Harris, spokeswoman for AAA MountainWest, said that after years of steady increases, Americans traveled less over each of the most recent four holidays the organization tracks: Memorial Day, Independence Day, Labor Day and Thanksgiving.

She said the faltering economy also is causing people to drive less.

“I think it’s a mixed bag of the economy not doing so well, and people have realized that the times of driving anywhere you want in the biggest vehicle you can buy are long gone,” she said.

She said excessive use of gasoline isn’t sustainable, no matter how cheap gas might become.

“I hope people have learned something, because this problem did not go away,” she said. “It’s not like we found a whole bunch of oil somewhere and the crisis has gone away.”

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