WA House advances gas tax increase, $3.2B transportation revenue package

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Traffic on Interstate 5 near Olympia. (Bill Lucia/Washington State Standard)

Washington House Democrats late Thursday approved a multibillion-dollar transportation revenue package anchored by a 6-cent increase to the state’s gas tax, the first hike in nearly a decade.

The increase would bring the state’s per-gallon gas tax from 49.4 cents to 55.4 cents, then raise it by 2% each year to account for inflation. 

At the same time, the state tax on diesel would go up three cents in July and another three cents two years later. That six cents would also get a 2% boost each year after that.

The gas tax hike, which would go into effect in July, is expected to raise $1.4 billion over the next six years. The diesel tax would net upward of $160 million over that time, estimates show. In total, lawmakers are banking on the package to bring in $3.2 billion over the next six years. 

Senate Bill 5801 contains numerous other tax and fee boosts. 

There’s an increase in the passenger vehicle weight fee. There’s a bump in the added sales tax for vehicles from 0.3% to 0.5%. There are $3 increases in the fees for titles and registrations. There’s a new 8% tax on the portion of the selling price of vehicles above $100,000. There’s a 10% tax on the amount of non-commercial aircraft sales above $500,000. There’s a temporary increase in the rental car tax from 5.9% to 11.9% before moving down to 9.9% in 2027.

There’s an increase in the tire replacement fee from $1 to $5. There’s a $1 increase every three years in fees for new IDs and driver’s licenses. And there’s an added charge for ferry riders paying with credit cards, as well as a 50-cent increase to the capital vessel surcharge on each fare.

House Transportation Committee Chair Jake Fey, D-Tacoma, said the “dire” transportation budget situation warrants the potpourri of taxes. 

Lawmakers have warned of a $1 billion shortfall over the next two-year budget cycle, ballooning to $8 billion over the next six years. They point to skyrocketing construction costs, flagging gas tax revenue and the looming multibillion-dollar question of how to address the court-ordered removal of culverts blocking fish migration.

“My constituents don’t want to pay more, but they want to drive on roads that are well maintained,” said Rep. Julia Reed, D-Seattle. “They want to ride on ferries that function and run on time. They want to see their streets served by modes of transportation that allow them to get out of their cars once in a while, and allow their children to move around more freely.”

Republicans say the medley of taxes, on top of separate levies to pay for the operating budget, is too much for working-class residents to bear. 

Rep. Andrew Barkis, the leading Republican voice in the House on transportation issues, said in floor debate that he recognizes revenue is needed to improve Washington’s infrastructure.

But “it comes to a point where we’re putting this on the backs of Washingtonians with an ever-increasing burden of taxation,” said Barkis, of Olympia.

On the House floor, Democrats rejected Republican proposals to get rid of the increases to the gas and diesel taxes, rental car tax, vehicle sales tax and tire replacement fee.

Democrats did choose to ax a controversial $1-per-attendee tax on sporting events, concerts and more at large venues. To make up for the lost revenue, they added another increase to the fee on heavier passenger vehicles.

They also elected to require the state Department of Transportation to conduct an analysis before imposing tolls across the entire State Route 520 corridor, not just the floating bridge, as is currently the case. 

When the Senate approved its initial $3 billion revenue framework last month, four Republicans joined most Democrats in support. On Thursday night, the new version in the House passed 51-47 without any Republican votes and eight Democrats in opposition.

Senate Bill 5801 now goes to the Senate to agree with the changes made in the House before sending it to Democratic Gov. Bob Ferguson’s desk by Sunday’s scheduled close of the legislative session. The chamber plans to take it up later Friday.

Ferguson has not publicly weighed in on the proposed gas tax increase.

“We’ll see when that comes to me,” Ferguson told reporters Friday, noting he was expecting a briefing from his budget director on the plan’s latest version.

How exactly the additional money will be spent remains to be seen. Lawmakers finished negotiating late Wednesday on their funding plan, expected to total upward of $15 billion. They plan to release their agreed proposal Saturday morning. 

Also on Thursday, the House approved transferring 0.1% of proceeds from the state sales tax from the operating budget to transportation starting in the 2027-29 biennium. This would shift hundreds of millions of dollars toward transportation.

The Senate on Friday also passed the bill, Senate Bill 5802, so it’s headed to the governor.

This post was originally authored and published by Jake Goldstein-Street from Washington State Standard via RSS Feed. Join today to get your news feed on Nationwide Report®.