New legislation would increase the percentage of vehicle sales taxes devoted to the transportation budget from only .03% by 16.66% every year until it reaches 100% in 2031

Carleen Johnson
The Center Square Washington

A Washington lawmaker wants to shore up the state’s transportation budget by gradually putting sales taxes on vehicles into the roads they’ll drive on.

New legislation for the 2025 session offered by Senator Curtis King, R-Yakima, would increase the percentage of vehicle sales taxes devoted to the transportation budget from only .03% by 16.66% every year until it reaches 100% in 2031. The general fund currently receives the lion’s share of the revenue. 

The statewide motor vehicle surtax of 0.03% has been collected since 2003, and applies to all retail sales, leases and transfers of motor vehicles and is used to finance transportation improvements. 

King offered up the proposal as a partial solution to Washington’s worsening transportation revenue problem, generating between $350 million to $400 million in the first year. 

“That would go to $700 to $800 in the second year and to $1.2 billion in the third year and by the sixth year, it would all be coming back to the transportation budget,” said King. 

As reported by The Center Square, in the most recent fiscal year, the state gas tax has been declining since 2020 and in the latest fiscal year generated $1.6 billion.

Part of the problem is more fuel-efficient vehicles and more electric vehicles on the road mean less revenue from gas taxes.

Transportation officials have been studying road usage fees (pay per mile) and other ideas, but King suggests redirecting a percentage of vehicle sales taxes into the transportation preservation and maintenance account.

Sen. King’s bill states that a percentage of vehicle sales taxes would be dedicated to transportation funding, which would generate far more revenue for transportation projects. 

“It’s necessary because the transportation budget is very strapped in a variety of areas from maintenance and preservation to road projects that need to be completed along with the ferry system and maintenance for ferries that are going to be a real challenge for transportation” said King in a Friday interview with The Center Square.

King contends transportation revenue has been hijacked by other budget priorities.

“When we take money from the transportation budget to do an interchange to improve traffic it opens up economic development around that interchange because we’ve improved that,” said King. “All of the taxes that are improved because of that don’t go to the transportation budget, they go the operating budget and it’s been this way for 100 years.”

King suggested it’s time for state budgets to be reorganized.

“From my standpoint, the transportation budget has been supporting the operating budget and I firmly believe that if we were able to do what this bill asks, after three or four years because of how we spent that money, it would come back to the operating budget in the form of new and higher taxes coming to them because of the things we do with transportation money,” he said.

As reported earlier this week by The Center Square, Washington lawmakers are pursuing the idea of a road usage charge to make up for lost revenue from gas taxes.

“We’re a long way from a road usage charge in my opinion and one of my biggest issues with that is it costs about a half percent to collect the gas tax,” said King who contended the numbers he’s been shown on a road usage charge show costs of administration are about 8%. “But in all honesty if theyll us 8%, it’s probably more like 10-12%, just to collect it,” said King.

This report was first published by The Center Square Washington.