“The Impact”- Transportation Budget Leaders – Gas tax, CRC, Carbon and Roads
The “bare bones” description applied by some lawmakers to the 2021-23 Transportation Budget reflects the desire for a major infrastructure investment package to tackle big projects.
Legislators approved $11.8 billion for the two-year transportation budget. It pays for road and bridge maintenance, allows current projects to stay on track, and puts a significant amount of money towards replacing culverts that block fish passageways as mandated by a federal court order.
However, it doesn’t cover the cost of replacing the hundred year old I-5 Columbia River Bridge connecting Portland to Vancouver which could be at risk during a major earthquake.
It also doesn’t address what some transportation leaders see as a looming problem, the shrinking pool of gasoline tax revenue as electric and hybrid vehicles replace less fuel efficient cars, trucks, and SUV’s. Gas tax is the primary source of funding for road construction and maintenance around the state.
Now, fuel tax also linked to two of the governor’s signature environmental policy bills. The low carbon fuel standard and the cap and invest system that passed this year will only take effect once a transportation revenue package with at least a five cent per gallon gas tax increase is approved by the legislature.
“It was necessary to gain support in the Senate,” said Rep. Jake Fey (D-Tacoma), House Transportation Committee Chair. “Both the low carbon fuel standard and the Climate Commitment Act call for a transportation package with at least a 5 cent a gallon increase to the price of gasoline for revenues by Jan. 1st , 2022. Which is a very strange, strange time I guess in many respects because it comes before, comes before the normal odd numbered year session. But it is what it is and that was what the agreement was to move forward and so we’re going to try to work with that timeframe. But it isn’t the standard kind of timeframe that we work with to get this accomplished, but as you may recall years ago in the 2015 package there was an issue, what was called the poison pill, that if a low carbon related fuel standard was passed then all the money related to multi-modal would go to road projects. So we’ve had these contingencies before and that will be a challenge we’ll just have to deal with and work through.”
“First of all, there’s many of us who believe in the needs of transportation like preservation and maintenance. We need to do another package. We believe that carbon is tied to all that. And so I know in the past there’s been all these carbon policies that have been out there, but none of them would give any resources to transportation even though transportation makes up a large chunk of that carbon pricing. And so we… there were several of us who decided that we were not going to vote for any carbon pricing or any carbon policy unless it’s tied to transportation,” said Sen. Steve Hobbs (D-Lake Stevens), Senate Transportation Committee Chair. “And the reason why we had the five cent gas tax language in there was so that you couldn’t enact any of those policies unless you passed a transportation package.”
“I agree to some degree with Senator Hobbs. There should be some funding out of those packages that come to transportation. And as he said, that wasn’t happening and so I applaud him for tying it together, but you know it’s just like what we’ve done with cap and trade they’ve not only well you’re going to get this percentage of money, but it’s all got to go to multi-modal. That’s where I have some objections as to how that all came down,” said Sen. Curtis king (R-Yakima), Ranking Member, Senate Transportation Committee.
Will there be a special session to deal with transportation?
“The challenge is next year is a short session and I don’t think a transportation package has ever been done in a 60 day session with everything else that we’ll be dealing with. So if we were going to do that we would need to have more time to do that and starting, you know, fairly soon,” said Rep. Andrew Barkis (R-Olympia), Ranking Member, House Transportation Committee.
Uncertainty surrounding a federal infrastructure package is another factor that could influence the timing of a transportation package.
“There is urgency to pass a transportation package, but we have to do it right. The pause that you’re seeing right now is really driven by what’s going on in Washington D.C.,” said Hobbs. “What we need to do it is wait and see what comes out of Washington D.C. and then we can overlay our package on top of that so we don’t have to, you know maybe we don’t have to do some much revenue or we don’t have to spend so much, so we can scale it to meet what the federal resources bring to our state.”
Just how much the low carbon fuel standard, the cap and trade policy, and the eventual gas tax increase they hinge on will impact the price of gasoline remains a point of contention.
The sponsor of the low carbon fuel standard bill, Rep. Joe Fitzgibbon (D-Seattle), said Oregon’s five year old program has raised the price of gasoline by two to two and a half cents per gallon.
As for the other policy:
“Much less is known about the climate cap and invest legislation because it’s only been done in California and this is really only the second state in the country that’s done this,” said Fey.
Washington has one of the highest fuel tax rates in the nation and the lead republican on the Transportation Committee predicts each of the new carbon policies could significantly raise the price of gasoline indirectly in addition to the direct gas tax increase that would let both take effect.
“It’s concerning for us I mean both these policies, it’s no secret we were very opposed to,” said Barkis. “Our estimation is anywhere from 40 to 60 cents per policy. That would be over a dollar before we even do any of the other increases. So any negotiations we have and any conversations with regard to a revenue package will have to take that into consideration, because of the impact it will have on the people of the state. We’re going to be, it’s not going to be long before we’re going to see five dollar a gallon gas. It’s pushing that in California.”
As for electric and fuel efficient vehicles cutting into the main source of road maintenance funding, Senator Hobbs is backing the concept of a pay-per-mile tax to ultimately replace the gasoline tax.
“We need to look at road usage charge or set up a system that gets away from gas taxes and pays per mile,” said Hobbs. “We’re having declining gas tax revenues and that’s a problem. You know we all want fuel efficiency and it’s great for the planet, but it’s not great for the transportation budget.”
Republican transportation leaders in both chambers agree with the need for transportation spending.
“Maintenance and transportation, we have underfunded that area for years and it’s starting to catch up with us,” said King.
“Our infrastructure in so many areas is failing,” said Barkis.
Where they disagree with the democratic majority is where to find additional money for roads and bridges. Republicans in both chambers backed a proposal to steer money collected from vehicle sales tax into the transportation budget, instead of channeling it to other areas of government.
“We need more revenue I would say that I don’t know that it needs to be new revenue,” said King.
“When you have a budget that we had this year which is increasing like fourteen point two or three percent, to say that there isn’t any money that we could take out of what now goes to the operating budget in sales tax on these cars and trucks, part of that should come back to transportation because there’s more of a nexus there than there is with the operating budget. But we could gain no traction with that,” said King. ”Our revenues were above and beyond what we expected. And then with the billions of dollars that came in from the feds we could have easily done that and helped reduce the amount of money that we need.”
Click here to watch “The Impact” May 12, 2021