The Washington State House of Representatives approved a $16.8 billion transportation package this week after cutting a controversial export fuel tax from the mix.
The transportation bill includes a host of projects to fix existing roads and bridges, and mandates that would move the state toward limiting new vehicle purchases to electric-only beginning in 2030.
But most of the sound and fury it generated revolved around the export fuel tax that was ultimately removed.
The proposal, a 6-cent per gallon tax on fuel exported from Washington refineries to other states that would have generated $2 billion over the package's 16-year lifespan, sparked an outcry from neighboring state governors from both parties and some Washington residents.
In the end, it was replaced with an annual $100 million transfer for the next 15 years from the state’s public works account.
House Transportation Chair Rep. Jake Fey, D-Tacoma, said he decided to scrap the export tax because "it was taking a chance legally, as nothing of that size, in terms of revenue, had been tried before. If it was challenged in court, and the ruling was adverse, it would punch a hole in revenue" supporting the transportation package.
He also weighed the potential for similar actions from other states affecting "our own consumers," Fey said. "We thought we had a better solution [with the public works transfer], and one that we could rely on. It seemed like the right thing to do."
Alaska Gov. Mike Dunleavy, a Republican, said in a tweet of the proposed export gas tax that the state’s “view of Alaska as a colony is reflected on a tax on all of us.”
Oregon Gov. Kate Brown, a Democrat, said she had contacted Washington Gov. Jay Inslee, a fellow Democrat, asking him to veto the legislation if it included the export tax.
Most of the motor vehicle fuel consumed in the Pacific Northwest comes from five oil refineries in Washington’s Puget Sound. Oregon receives
Idaho Gov. Brad Little and Attorney General Lawrence Wasden, both Republicans,
“During a time when inflation is soaring at historic levels, we ask you to step in and do what you can to stop these harmful proposals,” Little and Wasden wrote. “If these proposals reach your desk, we ask you to veto them. Now is not the time for our states to turn on each other with excise tax proposals that dampen our economy and increase costs for everyone.”
Inslee, who was unwavering in his support despite the pressure from other governors, remains strongly “supportive of this package, which provides the most climate-friendly investments in state history,” said Jaime Smith, an Inslee spokeswoman.
“Funding sources are always a point of debate, and this plan is no different,” Smith said ahead of the vote. “The governor hopes legislators deliver this to his desk.”
The transportation department will need to complete a scoping plan by Dec. 31, 2023 to move the state toward its goal of eventually restricting new vehicle purchases to electric. It also creates an electric vehicle council to ensure the state is leveraging state and federal resources.
The export tax was just one funding component of the massive 16-year transportation package.
Funding sources include $5.2 billion from the cap-and-trade law approved by Washington lawmakers last year, $3.4 billion from federal infrastructure money, $2 billion in operating funds, and $1.4 billion in higher license plate fees. It also proposes a one-time transfer from the operating fund into the state’s transportation fund.
The bill would tackle long-needed road rehabilitation, promote transit ridership through grants for improved service and free ridership for anyone 18 and under.
It would add four new hybrid-electric boats to the state’s ferry fleet, match federal dollars to move forward on a high-speed rail project between British Columbia and Oregon and spend $2.5 billion to improve road culverts for fish passage in compliance with a state Supreme Court ruling.
"Traditionally, when we do these packages, there is not much of an emphasis on maintaining what we have," Fey said. "In this bill, $3 billion will support projects that preserve what we have."
Washington has the second largest ferry system after New York and the vessels are worn out and breaking down, Fey said.
The bill creates a Move Ahead Washington account within the motor vehicle fund. The money in that account could only be used for the projects named in the legislation or improvements in a transportation appropriations act including any principal and interest on bonds authorized for the projects or improvements. It also creates a Move Ahead Washington flexible account within the state treasury that has the same stipulation on spending as the MAW account.
The bill’s co-author, Sen. Marko Liias, D-Lynnwood, who chairs the Senate’s transportation committee, said in an emailed response regarding elimination of the export gas tax that he was open to exploring alternative ways to fund the bill.
“I’m pleased to see the House taking action on the Move Ahead Washington proposal,” Liias said. “I look forward to sorting out the details in conference.”
The Senate passed the spending portion of the bill Feb. 15 on a 29-20 vote. Senate Bill 5974, the Move Ahead Washington Funding Bill, passed the Senate a week earlier. The bill passed the House on a 54-43 vote Tuesday night.
Rep. Eric Robertson, a Republican on the House’s transportation committee, claimed the minority party was left out of discussion that resulted in the transportation bill.
He said in a legislative update on his website that he thinks the Democrat’s transportation bill focuses too much on transportation in the core metro areas and doesn’t do enough to alleviate congestion on heavily-trafficked suburban freeways.
"This is not the right way to do transportation for the state of Washington," Rep. Andrew Barkis, a Republican on the transportation committee, testified Tuesday prior to the House vote on the bill. He contends that the minority party was left out of the process.
Republicans disagreed with the use of funding from the public works assistance fund, which is tapped by local governments to pay for projects, Fey said. They also would have preferred that the automobile sales tax fees be diverted to pay for transportation, rather than using $2 billion from the state's $8 billion surplus.
The plan will tap an existing $1 billion bond authority, but can't do more than that, because Fey said the state is pretty leveraged from the bonds
"In the latest forecast our gas tax revenues were down $90 million, the toll revenues and ferry facility revenues were also down, so we have to do something different," Fey said.
