Washington State Proposes Mileage Fee and Gas Tax Hike to Address Revenue Shortfall

Washington state is considering a groundbreaking shift in how it funds its transportation infrastructure. Facing dwindling revenues due to the growing popularity of fuel-efficient and electric vehicles, lawmakers are proposing a new system that would charge drivers based on mileage driven, alongside an increase in the state's gas tax. This initiative aims to compensate for the projected 70% decline in gas tax revenue by 2050, which currently supports over a third of the state's annual $1.3 billion transportation budget. The proposal includes an annual mileage-based fee for certain vehicles and a nine-cent rise in the gas tax, forming part of the House's $15.2 billion transportation budget plan.
The proposal stems from the changing landscape of vehicle usage within Washington state. With more people opting for eco-friendly alternatives, traditional methods of taxation no longer suffice. According to Representative Jake Fey, chair of the House Transportation Committee, this trend poses a significant challenge to maintaining essential roadways and bridges. The new mileage-based fee would apply exclusively to cars achieving over 25 miles per gallon, exempting those with lower efficiency as they already contribute more through existing gas taxes.
Under this new framework, hybrid vehicles will experience changes too. Traditional hybrids, previously subject to a $75 registration fee, would now be charged under the Highway Use Fee instead. For instance, a car achieving 26 miles per gallon might incur around $7 annually, whereas a vehicle with double that efficiency could face closer to $94 per year. These figures illustrate the nuanced approach being taken to ensure fairness across different types of vehicles.
Support for the measure isn't unanimous. While some legislators like Rep. Andrew Barkis recognize potential benefits if such a model eventually replaces the gas tax entirely, others remain skeptical. Barkis himself voted against the current proposal, advocating alternative funding mechanisms such as leveraging sales taxes from automobile purchases or utilizing funds from the Climate Commitment Act. As discussions continue between the Washington House and Senate, reaching consensus becomes crucial ahead of the legislative deadline on April 27.
Despite its seemingly modest financial impact, the proposed Highway Use Fee arrives amidst broader economic pressures affecting Washington residents. With one of the nation's highest existing gas taxes at 49.4 cents per gallon potentially rising further, combined with increasing costs related to auto insurance, repairs, and registrations, many households may find their budgets stretched even tighter. Thus, while innovative solutions aim to sustain vital infrastructure, careful consideration must balance these needs against everyday affordability concerns.