Washington State DOT Shows Massive Revenue Loss on the Way
One of the consequences of the push towards electric vehicles is a decline in gas tax revenue. The gas tax, under the 18th Amendment to the State Constitution, is ear marked for transportation projects. With more electric vehicles appearing on state roadways, less people are stopping at the pump to fill their tanks...and the projected revenue loss is massive.
With Executive Order 21-04 Governor Jay Inslee pushed to remove gas powered vehicles from Washington's roads. Before that, the State Senate passed SB 5811 which stated that Washington State would follow California's zero emissions mandate. In August of 2022 when California's Air Resources Board created a rule to ban gas powered vehicles in the state by 2035, it triggered SB5811, forcing Washington State into compliance with California's rule.
The less gas powered vehicles on the road, the less revenue through the gas tax. That is one reason why the state is investigating, and has already run a pilot program, to implement a pay per mile tax to eventually replace the gas tax. The revenue loss is already being felt by WSDOT as in their 2022 annual report, submitted to the Governor's office last week, they laid out the grim outlook for the transportation fund .
So How Bad is it Really?
The report cited two increases in the gas tax since 2012 to combat falling revenues, placing Washington as the state with the third highest gas tax. Washington has the highest registration surcharges on electric vehicles at $225 and there is an annual surcharge on hybrid vehicles as well. Taking all of that into consideration, WSDOT is still projecting massive cash shortfalls.
OK, but How Much Money are We Talking?
WSDOT projects a loss of roughly $21.4 million a year in tax revenue for the next 28 years. That comes out to a hefty $600 million shortfall. You can only increase the gas tax so much, or increase surcharges and registration fees so much, before needing to find another taxation stream to address the transportation fund and associated infrastructure costs. The report recommends the road usage charge or pay per mile tax as the avenue to recoup projected losses.
LOOK: See how much gasoline cost the year you started driving