How Washington's proposed pay-per-mile tax would work
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A plan to tax Washington drivers by the mile to help replace the state's waning gas tax revenue is back before the Legislature.
Why it matters: As cars have gotten more fuel efficient, revenue from the state's gas tax has decreased, contributing to problems paying for state transportation projects, state Rep. Jake Fey (D-Tacoma), who chairs the House Transportation Committee, told Axios.
Zoom in: A proposal from Fey would make the pay-by-mile program voluntary at first, then slowly make it mandatory for more classes of vehicles.
- By July 2029, all electric and hybrid vehicles would have to pay a road usage charge of 2.6 cents per mile. (This would replace annual EV and hybrid registration fees.)
- By July 2035, all vehicles with fuel efficiency of at least 20 miles per gallon would have to pay the 2.6-cent per-mile fee.
How it works: Car owners would have to report their miles driven by submitting odometer readings or by using an automated option provided by the state.
- Drivers would pay the road usage charge when they renew their vehicle registration.
- Money paid in gas taxes would be credited against the amount drivers owe in road usage fees, resulting in a lower charge, according to the proposal.
- The Department of Licensing would calculate the amount of gas tax paid — and the corresponding credit — using a method that would be developed later through an agency rulemaking process.
The fine print: Drivers would be charged an additional fee amounting to 10% of what they pay in road usage charges, and that would go toward rail, bicycle, pedestrian and public transportation projects.
What they're saying: Washington has been studying a pay-per-mile tax for more than a decade, but the state's looming transportation budget deficit has made its adoption more urgent this year, Fey told Axios.
- Over the next six years, the state faces a shortfall of about $8 billion to complete transportation projects lawmakers have already approved, replace aging state ferries and comply with a court order to remove culverts that block fish passage, he said.
The other side: State Rep. Andrew Barkis (R-Olympia), the ranking Republican on the House Transportation Committee, said in a written statement that the pay-by-mile plan "risks unfairly penalizing working families, rural communities and those who depend on their vehicles every day."
- "While this policy includes fuel tax credits, many drivers will still end up paying more," Barkis said.
What's next: Because Fey's proposal is tied to budgetary issues, it's immune from some of the Legislature's deadlines, including Wednesday's cutoff for bills to pass off the House floor.
- State Sen. Marko Liias (D-Edmonds), who chairs the state Senate Transportation Committee, told Axios he wants to continue to discuss the proposal, which he said gets at "a real problem we need to address" with transportation funding.
- "It's always challenging to move big new ideas," Liias said. "But this is a conversation we need to have with the public."