On Monday Washington State Governor Chris Gregoire announced a $3.6 billion proposal to address the state’s transportation maintenance and preservation needs over the next ten years. The proposal is funded from a $1.50-a-barrel fee on oil produced in Washington State; a $100 fee on electric vehicles; a 15-percent increase in license fees for heavy commercial vehicles; and a $15 weight fee on passenger vehicles. It also increases local taxing and fee-setting options for cities and counties to raise money for roads and transit without going to a public vote. See “Governor pushes transportation investment,” Seattle Times and “Gregoire: Pass new oil fee to fix roads,” Spokesman Review for more information.
It’s the oil fee that raises the bulk of the revenue, and will be the most controversial. The oil industry has been drop-dead opposed to the assessment in the past. A number of Republican legislators have already expressed opposition to the oil fee, while reserving judgement on the overall proposal. Some Republicans indicated they might prefer a gas tax increase, which some Republicans have vote for in recent years. And some legislators will argue that the fee is really a tax; the distinction is critical because it takes only a simple majority to pass a fee increase, whereas a 2/3 approval is needed for a tax increase.
Alternative revenue raisers are few. While some stakeholders are calling for significant investment in projects – roads, rail, transit and other modes – many of those stakeholders oppose a gas tax increase which is essentially the only method of raising the billions necessary for advancing projects.
The proposal is far short of the 10-year, $10 billion maintenance and preservation needs outlined by the Governor’s Connecting Washington task force in late 2011 (Task force says state needs billions for transportation,” The Olympian). It’s likely short because you simply can’t raise fees high enough to provide $10 billion. For example, the proposed 5$ fee on studded tires raises only about $7.5 million over ten years, while the $100 fee on electric vehicles would raise about $10 million. You’d have to increase many, many fees by a tremendous amount to raise “serious” revenue for projects.
The task force also recommended a roughly $10 billion project investment program. The Governor did not formally propose legislation, but supports the legislature crafting a proposal, funded through a gas tax increase, that would be voted on by the people in November of 2012. The legislature is likely to seriously consider this.
The Governor’s $3.6b proposal can be enacted with a simple majority, whereas any tax increase-based bill would require approval from 2/3 of the legislature. The Governor claims the proposal will create 5,500 jobs.
A collection of transit/environment stakeholders was generally positive about the Governor’s effort but also noted:
As it currently stands, the proposal is still overwhelmingly weighted towards serving automobiles and doesn’t provide any funding for bi-partisan supported safety programs such as Safe Routes to Schools or the newly created Complete Streets grant program.
The group also observed that
“More investments in our transportation system are critical to getting our economy moving again. By putting an emphasis on safety, maintenance and operations, the Governor is making sure that our existing infrastructure is working efficiently and safely. Her call for progressive transit funding at the local level is urgently needed as demand for transit is growing but service is being cut across the state.
Meanwhile the Washington Policy Center, a free market policy group, says “Transportation tax increase? Not so fast…” and essentially argues the package is underwhelmingly weighted towards serving automobiles. The Center’s transportation policy expert, Mike Ennis, offers a variety of suggestions for legislators to consider in addition to or instead of fee increases.
There are others who will likely have mixed reactions. Cities and counties do not receive as much from the $3.6 billion as they had anticipated. The proposal does provide them with some local option revenue-increasing methods, however. And Ports have to be disappointed that they are largely excluded from the $3.6 billion proposal, and are arguably underrepresented in the draft project list for the gas-tax proposal. Expect Legislators to take a closer look at how to help these three groups.
Larry Ehl is the founder and publisher of Transportation Issues Daily. In the public sector, Larry was Federal Relations Manager for Washington State DOT; Chief of Staff to US Senator Slade Gorton; and was twice elected to the Edmonds School Board.