Sound Transit's 2001 revenues exceed forecast budget despite recession
Sound Transit's cautious economic forecasting has protected it from the budget shortfalls facing many other jurisdictions in Washington, according to an agency financial analysis released today.
In 2001, Sound Transit collected approximately $268 million in tax revenues, which is $5.93 million (2.26%) more than forecast in late 2000*. For the 1997-2001 period (from the agency's creation to the present), tax revenues are $65.57 million (5.95%) above the original forecast / budget.
"Even with the recession and the economic fallout from the events of September 11, Sound Transit's forecasting methodology is performing very well," Kevin Phelps, Sound Transit Board member and Finance Committee chair, said. "Because of its conservative methodology, this is the fifth year in a row that Sound Transit's actual revenues have exceeded its forecast. This is proof through performance."
Sound Transit receives its tax revenues from three sources: a retail sales & use tax, a motor vehicle excise tax (MVET), and a rental car tax.
- In 2001, retail sales & use tax revenues were $2.64 million (1.27%) above the original forecast, an excellent performance because this revenue stream is very sensitive to the business cycle.
- MVET revenues had the best performance of Sound Transit's three revenue streams, with a positive variance of $3.56 million (6.76%) in 2001.
- Rental car tax revenues were $262,000 (10.71%) below the original forecast in 2001, but this tax yields only about one percent of Sound Transit's tax revenues. Rental car tax revenues have suffered the most from the twin impacts on tourism and business travel of a recessionary economy and the September 11 terrorist attacks.
"The best news is that the agency's original revenue forecast anticipated-and correctly adjusted for-the recession that started in the second quarter of 2001," Phelps said.
An analysis of revenue performance by subarea also yielded positive news for the 2001 forecast:
- East King's tax revenues were $1.33 million (1.92%) above the original budget.
- North King's tax revenues came in essentially at budget, showing a positive variance of $356,000 (0.47%).
- Pierce had the best overall tax revenue performance among the subareas in 2001, with a positive variance of $2.57 million (6.32%).
- Snohomish was the only subarea with a negative overall revenue variance ($458,000 or 1.41%).
- South King posted the second best tax revenue result among the subareas, with a positive variance of $2.14 million (4.83%).
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Sound Transit plans, builds and operates regional transit systems and services to improve mobility for Central Puget Sound.