Legislative Session Updates: Proposed Fuel Export Tax

Rosa Pulido

Friday, February 25, 2022

Legislative Session Updates: Proposed Fuel Export Tax

“MOVE AHEAD” WA TRANSPORTATION PACKAGE

House and Senate Democrat leaders unveiled a $16.8 billion, 16-year transportation funding package (called “Move Ahead Washington) that would be funded from the following revenue streams:

$5.4 billion from Washington’s new carbon cap and trade program
$3.4 billion in federal infrastructure funds
$2 billion one-time transfer from the state’s General Fund

Several increases in fees, including:

$2.053 billion from a $0.06 per gallon fee on fuel exported from Washington State
$1.4 billion increase in license fees for automobiles and motorcycles
$1.6 billion increase in aircraft fuel taxes, driver’s license, and permit fees.

The plan does not increase the gas tax, nor does it rely on new bond authority. Accordingly, the plan does not require bi-partisan support to be adopted. If majority Democrats have the requisite votes, the package can be approved without any Republican support. This is a dramatic deviation from three decades of bi-partisan cooperation on transportation.

Investments included in the Move Ahead package:

Washington’s Constitution mandates that certain revenues, including fuel taxes, be dedicated for highway maintenance and improvements (commonly referred to as “18^th amendment protected revenues”).

Revenues from non-18^th amendment protected revenues, which include carbon cap and trade, general fund transfers, license fees and federal funds can be used for non-road investments in transit, pedestrian, rail, and environmental projects.

18^th amendment restricted fund investments total $11.2 billion and include:

$1.1 billion in four new ferries and ferry operations and maintenance
$2.6 billion in new projects, including the Columbia River Bridge, US 2 trestle, Highway 18 widening, the Hood River Bridge and other HOV related projects.
$1.4 billion to bolster funding for I-405 corridor construction, SR 520 improvements, Snoqualmie Pass, and the Puget Sound Gateway project.
$2.4 billion for fish barrier removal
$3.0 billion in preservation and maintenance
Additional investments in aviation infrastructure, equity initiatives and freight rail projects.

Non-restricted fund investments total $5.4 billion and include:

$1.3 billion in bike and pedestrian grant programs and school transportation improvements
$3.0 billion in transit
$488 million in alternative fuels and electrification
$435 million in electrification of ferries
$150 million for ultra - high speed rail

WA STATE PROPOSED FUEL EXPORT TAX

Neighboring state's have responded to the proposed fuel export tax that is included in the proposed transportation package. Here are some examples that have begun emerging. Note in Alaska, the idea of retaliatory surcharges on fishery landings and oil exports.

The Idaho House of Representatives unanimously adopted a resolution in opposition to the fuel export tax: HOUSE JOINT MEMORIAL 5

The Association of Oregon Counties, the Alaska Municipal League, the League of Oregon Cities, and the Idaho Association of Counties signed a joint letter in opposition to the fuel export tax

The Governor of Oregon published this op-ed in the Seattle Times this week: Oregon Gov. Brown to Inslee: Put the idea of a fuel tax ‘back on the shelf’ | The Seattle Times

The Oregon AGC, Oregon Business & Industry, Oregon Fuels Association, and the Oregon Trucking Associations signed a joint letter in opposition to the fuel export tax

[un]Divided with Brandi Kruse segment on the fuel export tax proposal: Washington has a tax addiction

Two bills introduced in Alaska in retaliation to Washington’s fuel export tax proposal:

HB 361 SURCHARGE: OIL EXPORTED TO CERTAIN STATES, REPRESENTATIVE MCCABE
HB 393 FISHERY LANDING TAX SURCHARGE, REPRESENTATIVE MCCABE

HOUSE BILL 2018 - SALES TAX HOLIDAY

HB 2018 – The bill would create a 3-day sales tax ‘holiday’ over the labor day weekend from Sep 3-5 on certain items for purchases under $1,000.

The intent is to give a sales tax break to WA residents but also to encourage shopping at small businesses across the state. To avoid opposition from local jurisdictions concerned over losing their share of local sales tax, the bill does establish a mechanism for the state to ‘pay back’ all lost local sales tax revenue to each jurisdiction.

Additionally, included in the proposed House Budget is $300K that would go to the Washington State Department of Archaeology and Historic Preservation (DAHP) “provided solely for the Washington main street program to contract with a marketing consultant to conduct a statewide "shop local and save" marketing campaign to notify and draw consumers to local main street businesses during a three-day sales tax holiday contingent upon passage of House Bill No. 2018 (sales tax holiday).”

Legislative Session Updates: Proposed Fuel Export Tax

Legislative Session Updates: Proposed Fuel Export Tax

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