Senate Transportation Chair Steve Hobbs (D-44) has unveiled a series of bills creating 10-year, $17 billion transportation package that includes a carbon fee and a gas tax increase to continue infrastructure investments and finance fish barrier removal projects that are required as part of a court injunction.
At a Feb. 28 public hearing, state lawmakers, local governments and ports argued in favor of the proposals, citing the correlation between infrastructure and economic development and connection between revenue and project funding. However, initiative sponsor Tim Eyman warned that the new tax increases could trigger a tax revolt by voters, who will decide this November whether to approve $30 car tabs via Initiative 976.
“You’re putting them in a position where they feel there’s no other way to communicate with you that there’s a limit on how much they can take,” he said.
If passed, SB 5971, SB 5972 and SB 5970 would raise $17 billion in new revenues over a 10-year period through a variety of new revenue sources. That includes $3.5 billion in new bonds issued, a $15-per-metric-ton carbon fee, a new sales tax on automotive and bicycle parts and impact fees on new construction and development. Energy intense and trade exposed industries (EITE) would be exempt from the carbon fee. There would also be a $.06 gas tax increase, expected to generate $2.2 billion over the 10-year period and raise the state gas tax – the third highest in the nation – to $.554 per gallon.
Of the three bills, SB 5971 is the only one that lacks bipartisan support. The other proposals have support on both sides of the aisle, including from former Transportation chair Curtis King (R-14).
Hobbs told colleagues that the package will allow the state to continue infrastructure investments started by the 2015 Connecting Washington transportation package. That includes the century-old Interstate-5 bridge from Vancouver to Portland and the Palouse River and Coulee City Rail Line, the state’s longest short-line freight rail system that runs 300 miles through four eastern Washington counties. The state purchased the system in 2007 and it is used for transporting products. Hobbs said that further investment in the system could increase the maximum speed allowed and double exports carried on it.
The other financial challenge facing the state are hundreds of fish barriers on property managed by the Washington State Department of Transportation (WSDOT) that must be fixed by 2030 as part of a court injunction. The price tag is an estimated $3.4 billion and might otherwise have been financed through the Public Works program’s low-interest, revolving loan program; however, that account has been raided by the legislature to pay for new basic education spending, and meanwhile there are $880 million in ready-to-go local infrastructure projects that lack funding.
Under Hobbs’ proposal, the carbon fee revenue would pay for those projects based on watersheds, in order to also address nearby barriers on city and county roads not subject to the court order.
“All the other carbon proposals, I feel, are lacking in terms of giving back to Washington state, so I want to put another option out there,” Hobbs said. “The needs are not going to go away. I want everyone to look at this; there’s a lot of environmental concerns addressed here, as well as infrastructure.”
The package received a warm reception from King, who noted that “this is a thoughtfully put together package, whether you agree with it all or not.”
Speaking in support of the package, Vice Chair Rebecca Saldaña (D-37) said that “this is not something that we do in a one-year thing, and it’s not something that we do alone. I know that we will continue to work together to make sure that we get a package that works for everyone – and also makes everyone a little unhappy.”
Local government supporters included the cities of Vancouver and Lake Stevens, along with Everett City Mayor Cassie Franklin. She told committee members the city is projected to add over the next 16 years 70,000 more residents to the 110,000 residents.
Jerry VanderWood with the Association of General Contractors told committee members that “infrastructure investments create good jobs and spur economic growth.” However, he said the association is neutral on SB 5971, which includes the gas tax and carbon tax. “We’re not afraid of paying for the infrastructure with higher taxes, but we’re open minded with the regard to the funding mechanisms that might be available.”
However, Eyman told lawmakers that voters are already tax-weary from increases to their property taxes, gas taxes and motor vehicle excise taxes (MVET). This package would be “big a barrel of gasoline just on top of it,” he said. “You don’t understand I think the amount of resentment that the voters are feeling about their property tax bill that’s going through the roof (and) their car tabs.”
No further action is scheduled for the bills at this time.