Washington state drops fuel export tax

Facing significant pushback from outside the state, Washington state legislative leaders have nixed plans for a fuel export tax.

A 16-year, $16.8 billion transportation funding package moving through the legislature would provide money for highway repairs and construction, bridge replacements, and ferries.

One funding mechanism included in the plan called for charging a 6-cent-per-gallon export tax collected at the wholesale level.

The export tax would apply to gas and diesel shipped from in-state refineries to states with tax rates less than Washington state. Specifically, fuel shipped to Alaska, Idaho and Oregon would be affected.

Transportation leaders at the statehouse said the provision would let the state collect additional fuel tax revenue without burdening Washington residents at the pump.

Export tax goes over like lead balloon

The excise tax option was met with criticism from elected officials in the three western states.

Alaska Gov. Mike Dunleavy posted on social media that Washington state lawmakers pushing for the tax see his state as “a colony.”

Oregon Gov. Kate Brown also went to social media to say the proposed tax is “unacceptable.”

In a letter, Idaho Gov. Brad Little asked Washington Gov. Jay Inslee to “step in and do what you can to stop these harmful proposals.”

Responses from legislators at the three statehouses were equally critical. Some lawmakers even talked about pursuing retaliatory efforts for Washington residents and businesses.

The Idaho House voted unanimously to approve a joint memorial asking for Inslee to veto the tax if it reached his desk.

The memorial warned that the Idaho Legislature “will take any and all actions necessary to block this new tax.”

Washington statehouse leaders back down

After initially standing firm in their pursuit of an export tax, transportation leaders in Washington state have relented.

Weeks after House Transportation Chairman Jake Fey, D-Tacoma, said the tax would help compensate for the environmental effects of fuel refined in his state, he proposed an amendment to the transportation plan to remove the export fuel tax.

The amendment replaces the export tax with an annual transfer from the Public Works Assistance Account.

“People told us loud and clear that this was not going to work … We’ve come up with a reasonable, workable solution that takes the pressure off working people and contributes to a stronger partnership with our neighbors in other states,” Fey said in a news release.

Additionally, more than $2 billion would come from additional vehicle fees. Local governments also would get more taxing authority.

Where the money would be slotted

Dubbed “Move Ahead Washington,” the four-bill package would route $3 billion each to highway improvements and transit. Another $1.3 billion would be used to build four hybrid-electric ferries and electrify two ships run by Washington State Ferries.

The bill package would also access billions in federal funds and a one-time $2 billion transfer from the state’s operating budget. An additional $5.4 billion would come from a climate bill approved last year by legislators.

House lawmakers voted Wednesday, March 2, to approve the amended bill – SB5974. One day earlier, the House voted to approve another bill in the package – SB5975. Both bills next head to the Senate for approval of changes.

The House bills in the package, HB2118 and HB2119, remain in the House. LL

More Land Line coverage of news from Washington.