Since the passage of the Transportation Trust Fund in 1989, the Center for Energy Studies has periodically received requests to provide information regarding motor vehicle fuel sales. Usually, those requests are for local or regional breakdowns of sales within the state. Because there are no local motor fuel taxes in Louisiana, there is no systematic collection of consumption or taxes at the local level. To estimate taxes generated at the local (parish) level, we began with the Monthly Motor Fuel Consumption Report that the Louisiana Department of Revenue submits to the Federal Highway Administration. This provides us with statewide totals. We then used the Geographic Area Series of the Retail Trade component of the Economic Census, the most recent of which is 2002. This census includes a parish-by-parish sampling of motor fuel sales. Some errors do exist; for example, the data are based on gross sales and not volume; thus, regional fuel price variations within the state are not taken into account. This and other sampling issues have been discussed in some of our previous reports.
Estimated motor fuel sales and taxes generated at the parish level are depicted in Table 1. The columns containing percentages refer to the percentage of the state total. The estimated motor fuel tax collections are based on the 2002 Retail Census to generate individual parish percentages, and then multiplied by the total motor fuel sales for the state for Fiscal Year 2004-2005.
The top five parishes in terms of taxable motor fuel sales are Jefferson, East Baton Rouge, Caddo, Orleans, and Calcasieu. Calcasieu jumped to the number-five spot over St. Tammany, which had replaced Calcasieu during the 1987, 1992, and 1997 Economic Census surveys. Calcasieu, St. Tammany, and Caddo have increased their share of total state sales since the 1997 survey, but Jefferson, Orleans, and East Baton Rouge all declined. In the case of East Baton Rouge, the parish decline was more than compensated by increases in neighboring parishes. Both Jefferson and Orleans were in a long-term decline pre Katrina. Orleans' share of statewide total sales has declined a very substantial 54 percent since 1982, and Jefferson Parish has declined by 43 percent over the same time period.
With the historical decline in market share for the New Orleans area, other major markets have increased as depicted in Table 2, but overall, the large metropolitan areas have lost market share to other parishes.
The Northshore area has had the largest market share increase due to its population growth and its location on two interstate systems. Growth in market share in the Lake Charles and Shreveport areas is concurrent with the development of gambling in these two areas. Growth in the Alexandria region began with the completion of Interstate 49. Rapides Parish itself has been stable with Avoyelles and Natchitoches Parishes contributing all the growth. The market share for the Lafayette area is flat in 2002 compared to 1982, but this area had a decline in market share following the "oil bust" in the mid 1980s and has since reversed.
Historically, taxable motor fuel sales in Louisiana have increased at a very modest pace since the passage of the Transportation Trust Fund and the Transportation Infrastructure Model for Economic Development (TIMED) program in 1989. From 1989 through mid 2005, motor fuel tax revenue has increased 1.8 percent per annum, which is far less than the inflation rate. Moreover, the revenue increase has only been 0.7 percent per annum since 1999. This raises doubts as to whether all the projects included in the TIMED program can be completed under the existing revenue structure. The passage of HB 599 (Act 252) in the 2005 Regular Session, which changes the point of taxation from the wholesale level to the refinery "rack," is expected to increase tax compliance and generate an additional 10-15 million dollars per annum, about one-fourth of which will go for TIMED projects.
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