The Washington Legislature has sold a number of bonds to fund major transportation projects that will leave the state dependent on gas tax revenues for more than a decade.

At the same time, gas tax revenue continues to decline, due partly to newer vehicles being more fuel efficient and, in the case of electric cars, skirting the pump entirely.

The Legislature has increased the gas tax three times since 2000, more than doubling the per-gallon rate, which means drivers with older vehicles that get fewer miles per gallon are paying more at the pump.

The Washington State Transportation Commission projects a 45 percent decline in per-mile-driven revenue by 2040, which is a hole that could be filled by increasing the gas tax by 1.5 cents per gallon every year. However, electric vehicle ownership is expected to increase heavily in the next 20 years, so preserving transportation funding could mean pumping the gas tax even higher.

After seven years of study and a year-long pilot project that included more than 2,000 drivers, the Washington State Transportation Commission has released a report and its recommendation that lawmakers consider phasing out the gas tax while transitioning in a per-mile road usage charge (RUC).

WSTC executive director Reema Griffith shared findings in the report to the House Transportation Committee on Jan. 23, and the Senate Transportation Committee discussed legislation on Wednesday that would implement an RUC on electric and hybrid vehicles at 3.5 cents per mile, which is higher than the 2.4 cents recommended by the WSTC. The transportation commission suggests spending 10 to 25 years transitioning to an RUC, which would allow the state to settle the bonds it’s already sold and pledged to gas tax revenue.

Griffith tells Queen Anne News it is possible to eventually replace the gas tax revenue with a new source to resolve those bonds, but the revenue would need to be generating billions of dollars.

“It’s just the scale of dollars that, as we ramp up road charges, it’s going to take 10-15 years at the pace the Legislature sets,” she said, adding that could happen once 50-60 percent of the fleet changes over to an RUC. “We expect by then we will be seeing the gas tax revenue drop in real terms.”

WSTC forecasts 74 percent of Washington’s motor vehicle fuel tax (MVFT) will be going toward debt payments by 2028.

The one-year RUC pilot started in January 2018, with 2,000 Washington drivers from around the state and a few from neighboring states, and explored a number of options for capturing how many miles they traveled to determine what they would pay; no actual cash transactions took place, except for Oregon drivers who are already paying into that state’s RUC program.

Options tested included self-reporting, where a driver verified their odometer, pre-purchasing a block of miles, a plug-in device for a vehicle’s on-board diagnostic port and a smartphone MileMapper app created in partnership with the University of Washington.

Each option had its advantages and challenges.

Griffith said concerns about people using a self-reporting option and providing fake odometer photos are unwarranted, as insurance companies already have software that can tell if an image matches the correct make and model of a vehicle.

A plug-in device would be easier, because it automatically generates and sends mileage reports to an accounting system for billing. Fifty-six percent of drivers in the RUC pilot chose the plug-in option, but not all opted to use the GPS feature, some concerned about privacy and having their movements documented. Not opting for the GPS function, however, means the plug-in device doesn’t account for off-road driving, which are miles that wouldn’t factor into a road usage charge. Griffith said drivers would also want to have GPS activated when traveling out of state and particularly into other states with an RUC, such as Oregon. Forty-seven percent of drivers in the pilot chose not to use GPS.

Fourteen percent of pilot subjects used the MileMapper app, which Griffith said had to be capped because it was just a beta version.

“It tested really well,” she said, “and the key thing about this app is it had GPS that you could turn on and off like a little toggle switch.”

Only 1 percent of pilot subjects chose to buy blocks of miles, which also required submitting photos of their odometer and dashboard using an app developed for insurance companies.

The pilot was successful in assessing an RUC and determining a gas tax reimbursement, so drivers were not paying for both. With technology changes, Griffith said she expects to see bluetooth-enabled smart pumps within the next decade, making it possible for vehicles and pumps to communicate and factor in an RUC.

The Transportation Choices Coalition responded to the Road Usage Charge Assessment Report in early January, but none of its recommendations carried over to what the WSTC delivered to the Legislature, said TCC advocacy director Kelsey Mesher.

TCC is pushing for a Transportation for All bill that would add more transparency to how money is spent on transportation and update state goals to include climate equity, environmental justice and health.

The coalition requested the WSTC’s road usage charge recommendation not restrict revenue to highway purposes, and instead make it possible to use RUC funds to support multimodal investments.

Whether a $30 cap on car-tab fees approved by voters in 2019 is constitutional is still being litigated. If Initiative 976 is upheld, it would be a major blow to local, regional and state transportation coffers.

“Obviously 976 is very likely going to have negative impacts on especially multimodal transportation projects,” Mesher said, “and we are advocating to preserve as much of that funding as possible. But, at the same time, it’s really making legislators and leaders rethink how are we spending and making money on construction, and how do we make things more sustainable.”

TCC also encouraged the transportation commission to consider a progressive rate structure; one that considers impacts to communities of color, low-income households, rural communities and other vulnerable populations. Mesher said one issue that needs to be studied further is how to implement an RUC that doesn’t negatively impact immigrants and their privacy concerns.

The coalition also requested WSTC consider how a road usage charge could be used to advance environmental goals and account for greater impacts from larger vehicles on roads.

Administering a new RUC program will be expensive, Mesher said, and if the state is going to go through the trouble, it should look at maximizing a number of policy goals in the process.

“For example, could you charge more if you’re going to be driving through a polluted community?” she said. “Could you charge different rates for a differently polluting vehicle?”

Griffith said the WSTC did consider vehicle impacts on the road, but highways are built to handle semi-trucks that weigh more than 20,000 pounds, which provide more wear and tear than lighter weight private vehicles.

Senate Bill 6586

The Washington Department of Licensing already charges hybrid-vehicle owners an annual $75 car-tab fee, which started last October and is being used to build out more electric-vehicle charging stations. Electric-vehicle owners also pay this electrification fee, on top of a $150 fee in lieu of gas taxes, which goes toward the state roads funds.

Griffith tells Queen Anne News replacing these flat fees with a road usage charge could save drivers money, if they drive less than 12,000 miles a year.

Legislation proposed by Democratic Sen. Rebecca Saldaña would replace these flat fees with an RUC, however, the per-mile rate would be set at 3.5 cents, which is higher than the 2.4 cents the WSTC recommended, because it's closer to what drivers pay per mile under the gas tax. EV and hybrid vehicles would need to be able to travel at least 30 miles on a battery, while a per-mile fee of 2 cents would apply to a hybrid vehicle that uses electrical and an internal combustion engine. Revenue would be deposited in the motor vehicle fund for road preservation projects. Under Senate Bill6586, the RUC would take effect on July 1, 2024.

Saldaña said the RUC proposed is a starting point for ensuring everyone pays their fair share, increasing climate resiliency, and maintaining current infrastructure while being able to build future projects as gas tax revenue declines.

Senate Transportation Committee chair Steve Hobbs acknowledged a predicted $67 million shortfall in gas tax revenue this year during a Jan. 29 committee meeting. That’s because of increased fuel efficiency and electric vehicles, he said, which is good for the planet, “however, that doesn’t change the fact that our roads still have to be maintained.”

The Senate Transportation Committee heard testimony for and against the legislation on Wednesday.

Puget Sound Clean Air Agency director Craig Kenworthy said an Uber driver currently pays $860 in gas tax annually, but claimed the proposed RUC would cost them $1,750, creating a disincentive for ride-hailing drivers to switch to electric vehicles. Kenworthy encouraged lawmakers to make polluters pay, and not drivers trying to do the right thing. He acknowledged electric vehicle owners do receive $7,500 in federal rebates, but didn’t expect that program to exist by 2024.

Bryce Yadon, a lobbyist with Transportation Choices Coalition, said revenue should not be solely dedicated to the motor vehicle fund, citing a lack of funding for transit. He also said it was important to consider how rates affect low-income residents and communities of color, and also how to collect fees when people don’t have a bank account or smartphone.

Tom Gaetz with the Washington Asphalt Pavement Association and Jerry Vanderwood with the Associated General Contractors expressed support for the legislation, as long as a clause is added ensuring 18th Amendment protections; the amendment restricts gas tax and vehicle license fees in the motor vehicle fund to highway expenses.

Washington State Association of Counties managing director Jane Wall also expressed support for the legislation and ensuring 18th Amendment protections.

Climate Solutions transportation policy manager Leah Missick said the road usage charge is not a fuel tax, so it does not require 18th Amendment protections, nor should revenue be restricted to highway expenditures when increased transit use lowers impacts on roads. She encouraged tiered rates based on vehicle class, with larger vehicles paying more.

Electric vehicle owner Ronald Murray said the 3.5-cents-per-mile rate in Senate Bill 6586 puts EV drivers at a disadvantage because of the average 2.4 cents drivers under the gas tax pay. He also cautioned lawmakers to consider privacy concerns if using GPS to determine miles driven.

Griffith said she appreciates the legislation as a first step in what will be a longterm work in progress, and asked that lawmakers also consider applying an RUC to 12,000 vehicles in the state’s fleet, which includes EVs, as it would enhance the data set to be studied by the WSTC in the future.