Proposed WA road usage fee would add permanent fund for walking, biking and transit – UPDATED

For more than a century, Washington State has funded portions of its transportation work using gas taxes. But due to inflation, politics and the rise of electric vehicles, gas tax revenue nationally and in Washington State has continually fallen in recent decades. The state's current gas tax rate is at or near it's lowest point in history when adjusted for inflation. Larger and larger shares of transportation budgets now come from other non-transportation sources, including the state's general budget.

So what's the alternative? The leading concept is a road usage charge," which would be a fee drivers would pay per mile driven. A version outlined in HB 1921, filed this week in the State House, proposes a switch that raises the same amount for state highway funding as the current gas tax. Legislators can always change these rates in separate actions, but HB 1921 is only concerned with the collection method. Under the initial version of the bill, people driving vehicles weighing up to 10,000 pounds would pay the same 2.6 cents per mile in fees regardless of whether they are driving a gas guzzler or an electric car. That rate is equivalent to the gas taxes paid on a vehicle that gets 19 miles per gallon ($0.494 per gallon / $0.026 per mile = 19 miles per gallon). The fees would be phased in over a 6-year period starting in 2029 with the most efficient vehicles and ending in 2035 with the least efficient vehicles. A voluntary period would start in 2027.

The bill proposes that the road usage fees would fall under the 18th Amendment of the Washington State Constitution, approved by the legislature and voters in 1944 to require the state to spend fuel taxes on highway purposes." The bill would also add a 10% road usage assessment" on top of the road usage charge starting in 2029 that may only be used to fund rail, bicycle, pedestrian and public transportation in order to support of a range of transportation modes that help mitigate the demands placed on the roadway system." The bill specifically states that this assessment is not a motor vehicle license fee," so it should not be subject to 18th Amendment restrictions. The assessment would be a long-term funding source for walking, biking and transit, work that today is typically funded based on the whims of the legislators when crafting transportation packages. The state could do great things with such a dedicated fund.

Transportation Choices Coalition has been celebrating the news of the bill, saying in email blasts that it would end the era of highway expansion in Washington" because it commits to using Road Usage Charge revenue to fix the infrastructure we have - and not to build new freeways." Specifically, the bill states that Expenditures from the [road usage charge highway] account may be used only for the purposes specified in RCW 46.68.070 that are also highway preservation and maintenance purposes." Whether this language is truly strong enough to prevent the legislature from using these funds for new and expanded highways is yet to be seen.

TCC is urging supporters to write their legislators and sign in pro on the bill ahead of the public hearing 4 p.m. Thursday (February 13) at the House Transportation Committee (video).

UPDATE 2/14: I tuned in for part of the hearing Thursday, and there were a ton of people testifying against this bill. It seems Washington Republicans and some other groups successfully mobilized a lot of folks to oppose it. By the time the hearing began, the state's website listed 20,000 community sign ins, and nearly all were con." I have no idea if every sign in was legit or if there were bot shenanigans, but it is safe to say there were a lot of bill opponents. Even many of the commenters in favor of the bill had some reservations. Some major construction lobbies supported the idea but pushed back on the multimodal account, while others supported the road usage charge concept but were concerned it would incentivize inefficient vehicles while raising taxes on efficient ones. There were also a ton of comments expressing a lack of trust in the state's ability (or intent) to properly protect people's privacy while tracking their mileage and driving locations, a concern that is likely to span the political spectrum. The hearing demonstrated the huge challenges legislators will have trying to sell this idea because it is so much more complicated than the existing gas tax while also having somewhat murky advantages. It is a very easy bill to oppose and a complicated one to support. HB 1921's attempt at a compromise by limiting the main charge to 18th Amendment expenses while adding a tax on a tax" to create a separate multimodal fund also created an easy target for opponents. It is politically interesting to see the Republicans fighting in favor of a gas tax and against a more regressive flat fee user charge, which used to be the kind of thing the party would push. But they correctly identified this bill as vulnerable and took advantage of the situation to get folks mobilized against it. That's what a party locked out of power is supposed to do, and they probably gained a bunch of new supporters and email list sign ups in the process. I don't have any inside knowledge on this, but I would be surprised if we hear about this bill again this session. A hearing on the Senate's companion bill SB 5726 is currently scheduled for February 18, so if supporters are going to put up a fight they are going to need to make some big moves before then.

However, the bill is actually a compromise from TCC's original goal of not tying any of the road usage charge to the 18th Amendment restrictions, which are a relic of a different age. Whether due to legal or political analyses, legislators do not seem eager to bypass the amendment in this draft of the bill. The additional assessment is the crux of the compromise, creating a separate dedicated fund that must be used for walking, biking and transit work rather than try to carve into the road usage charge itself to fund that work.

On its face, the change from a gas tax to a road usage charge as outlined in this draft would cut the tax rate for people driving the least efficient vehicles while increasing taxes on people driving more efficient vehicles. That sounds bad, and on its own it could be. If supporters and legislators are going to sell this idea, they are going to need to sell the whole picture, including all the other tools they can and will use in order to reduce the burning of fossil fuels and encourage fuel efficiency. The gas tax may not be the best tool to accomplish this goal, but folks are gonna need to understand that the state is not just cutting taxes on gas guzzlers. The bill calls for additional study into using hood height or vehicle weight as a variable in the road usage charge in the future, but no such factor is included in the current draft.

Based on my best reading of the bill's text, the default accounting method would work something like this : A driver would continue to pay the gas tax when they fill up their tank like normal. Then once a year, they would submit their odometer reading so the state can calculate their road usage charge and the added assessment. The state would then calculate a credit for gas taxes paid and deduct that from the resulting amount owed. People who drive less-efficient oil-burning vehicles would receive lower bills due to their higher gas tax deductions (and possibly even a rebate?). Electric vehicle drivers would receive the largest bills since they would have no gas taxes to deduct. The bill also allows for developing systems to charge the road usage fees periodically throughout the year and to separately collect mileage data (there is an additional section in the bill about data privacy for such mileage tracking systems).

The state would also need to come up with solutions for deducting miles driven outside the state of Washington or on private roads. The bill would give everyone a standard deduction of 200 miles per year, which would likely be more than enough for most people. But things could get complicated for people who live near the state border and people who do a lot of interstate or international driving.

There's a lot to unpack in this proposal, and there will surely be a lot of debate and amending before a final vote if it gets that far this legislative session. The added assessment would provide an enormous benefit to our state and is the big selling point. Restricting road use charge revenue to preservation and maintenance could also be a huge win. While electric cars have a lot of benefits worth supporting, it doesn't make sense for people with electric cars to have no transportation taxes tied to the number of miles they drive. I am uncomfortable with the idea of providing a tax incentive to drive a less-efficient vehicle, but we also aren't talking about a huge amount of money per person here because our gas tax rate is so pitifully low (I'd love to see some calculations of example drivers and vehicles). In Washington, the state's portion of the gas tax is only about 12-13% of the cost of a gallon of gas. People would still have an incentive to drive a more efficient vehicle because buying less gas would still save money. Decoupling the state's transportation budget from gas sales could also reduce the influence of the oil industry on state politics and free legislators to pursue strategies to move away from oil without jeopardizing their own budget in the process.

What do you think about this idea? Let us know in the comments below.

More details from Transportation Choices Coalition:

A Road Usage Charge is a per-mile fee that drivers pay, rather than paying for gallons of gas they purchase. It would help ensure that all drivers contribute fairly to funding Washington's transportation system, regardless of vehicle type, fuel efficiency, or whether they drive an electric or gas-powered car.

We're excited that the bill creates a dedicated funding source for the preservation and maintenance of Washington's roadways, as well as a new long-term funding source for transit, walking, and biking. The bill's commitment to use Road Usage Charge revenue to fix the transportation infrastructure we have instead of building new highway projects is a huge win that could signal the end of the era of highway expansion in Washington State.

Roads and bridges across our state are in dire need of repair and redesigns, but preservation and maintenance are chronically underfunded. In 2019, WSDOT indicated it needed at least $1.24 billion a year to ensure a transportation system in minimum acceptable condition at the lowest cost, and we know the need has grown since then. Having a dedicated revenue source for this work would be a big deal. And Washington's Complete Streets mandate ensures that as the state conducts preservation and maintenance work, it invests in things like crosswalks, bike lanes, and transit access to make our roads safer and more accessible for all users.

This bill also includes a 10% assessment on top of the Road Usage Charge that would be dedicated exclusively to non-highway spending on things like transit, walking, and biking. This would be an important new revenue source to fund more bus service, bus rapid transit, and intercity transit, as well as sidewalks, bike lanes, trails, and safe crossing infrastructure in communities across the state.

Our goal now is to ensure that the bill doesn't lose its commitment to preservation and maintenance funding or its 10% assessment for transit, walking, and biking. We'll keep you posted on ways to support the bill as soon as it's scheduled for a hearing.