If Washington state ever adopts a road user charge (RUC) to replace the motor vehicle fuel tax (MVFT), it’s going to be a long and complicated transition process. That was the consensus among legislators and state officials during a Jan. 23 work session of the Senate Transportation Committee. Although the Washington State Transportation Commission’s (WSTC) pilot project was just recently completed, key ranking lawmakers are already anticipating a big political scrap over whether to implement it, and if so, how it should work.
“Let’s say there will be one; it’s going to be a ways off,” Chair Steve Hobbs (D-44) said.
However, a presentation by Deputy Treasurer Jason Richter foreshadowed how the state’s transportation financing situation picture may compel lawmakers to adopt some version of the program, especially if it is concluded that no other viable alternative is available.
Right now, Washington has $21 billion in outstanding debt obligations. Of that, $8.2 billion or 39 percent is transportation financing. Transportation’s share of outstanding debt has increased dramatically since 1998, when it was less than 20 percent. While Washington had a debt-per-capita ratio higher than the national average in 1998, the difference has increased substantially since then.
At the same time, the state has also increased the gas tax through the 2003 nickel program and the 2015 Connecting Washington transportation package’s $12 cent increase. So far, none of the Connecting Washington tax revenue has been bonded, while the nickel program is currently overleveraged, according to Richter.
Anyone filling up their gas tank in Washington state outside of tribal lands now pays $0.494 per gallon, the third highest rate in the nation. In 2015, half of that revenue went to pay for bond service; although it has dropped, it is expected to go back up to 50 percent by 2024.
Altogether, drivers in Washington pay $0.678 in MVFT for every gallon of gas they buy.
However, despite the increased gas tax rate, the emergence of electric vehicles – which pay only a $150 registration fee – and improved fuel efficiency could threaten the state’s future MVFT, though estimates indicate it is expected to increase slightly over the next decade.
“Once technology becomes commercially viable, they tend to be adopted rather rapidly,” Richter said. This kind of sets up the future of what we can expect.”
“I think we want to encourage a lot of careful, critical thought on what the future holds for this funding source,” he added. “The transition from MVFT to another funding source…won’t be a clean break. It’s going to be slightly messy in moving onto the next one.”
However, the choice of an RUC is far from settled. Not only is it unpopular with Washingtonians, but concerns over driver privacy complicate accurately tracking miles driven out of the state.
Hobbs remarked that “one of the problems with the road user charge (is) there’s not one. “There’s a pilot project going on right now. We don’t know which one to pick. The data isn’t back. It’s going to take a while.”
He added that “by the time we pick one (RUC type) that we can all agree on – that’ll be a fight; hope I’m not here for that one – that there’ll be a lot of electric vehicles on the road.”
Also, MVFT is widely regarded as an efficient, effective, low-cost method of collecting tax revenue that the state constitution requires be spent on transportation such as roads, highways, bridges and ferries. In contrast, Sen. Tim Sheldon (D-35) noted that other revenue collection methods such as the RUC are “very expensive.”
Richter told lawmakers he’s “not an advocate of RUC specifically. I particularly don’t want a GPS unit in my car. I’m concerned, though, that the state may not be able to finance transportation infrastructure without some new source of revenue.”
He added that if that happens, the first thing to be affected would be the Washington State Department of Transportation’s ability to maintain and repair roads and existing facilities.
“It’s important to implement the road user charge as contemplated to be a replacement and not a new funding source that’s available for new projects,” he said. “At some point in time, we’re going to have to transition, and it’s going to be a long transition. My ask is that we pay close attention to how that’s done.”