The first increase in Washington’s gas tax since 2016 is the centerpiece of a bipartisan transportation funding plan state senators unveiled Monday.
The 6-cent per-gallon hike in fiscal year 2026 would bring the gas tax to 55.4 cents — before including the 18.4 cent federal rate. The state tax would then rise by 2% annually to account for inflation starting the following year under the Senate plan.
The proposal would raise $1.5 billion over the next six years, lawmakers say. It’s one of several ways legislators on both sides of the aisle are looking at funding a $16.2 billion budget in the 2025-2027 biennium.
Without new revenue, the transportation budget faces a $1 billion shortfall over the next two years, growing to $8 billion to meet current obligations over the next six years, some lawmakers have cautioned.
If state senators get all the new revenue they envision, their estimates show it would total about $10.2 billion in new funding for transportation during the next six years.
A proposed transfer of 0.3% of sales tax collections from the operating budget to transportation would add $800 million annually starting in the 2027-2029 biennium.
Other moneymakers include raising fees on electric vehicle registrations, a new tax on luxury vehicles costing over $100,000, an increase in the tax on rental cars and an added $10 assessment on traffic infractions.
Even with the new revenue options, the budget plan still includes 13 furlough days in fiscal year 2026 for state transportation workers, excluding Washington State Patrol troopers, employees who work on state ferries and at terminals, highway incident responders and others.
This one year of furloughs is in line with what senators proposed for other state employees in their operating budget plan, also unveiled Monday.
The current two-year budget is $14.6 billion and includes money for road maintenance, ferries, bike and pedestrian projects and more. Monday’s proposed budget is made up of $6.2 billion in operating costs and $10 billion for capital projects.
The new transportation tax options are separate from proposals last week in the House and Senate to raise $15 billion or more in new tax revenue over the next two budget cycles.
The Senate budget is set for a public hearing in the transportation committee Tuesday and a vote from that committee Thursday.
The House is expected to release its transportation spending plan late Monday. Both chambers will likely pass their budgets quickly and then negotiate over their provisions for the next few weeks. The legislative session is scheduled to end April 27.
By way of background
Behind the transportation funding shortfall are ballooning construction costs and flagging gas tax revenue.
This combination has left lawmakers searching for new options for years. Without new state revenue, it could result in road projects sitting half-built as they wait for more funding, lawmakers warn.
At the end of last year, then-Gov. Jay Inslee proposed a $14.7 billion budget for the 2025-2027 biennium that begins July 1. His plan assumed no new revenue.
His version included $900 million for the removal of fish passage barriers, which are culverts under roads that block the movement of salmon and other fish in waterways. Inslee’s plan also had $794 million for state ferries.
In January, advisors for Inslee told lawmakers the state’s biggest transportation projects had increased in cost by more than $1.3 billion, coupled with a drop in expected revenue of over $530 million between this biennium and the next one.
The outlook has brightened slightly since then. A new forecast released last week showed projected transportation revenues up by about $113 million from predictions in November for the next two-year budget, to a total of $7.1 billion. This doesn’t include money from the federal government or the portion of funding from the state’s carbon auctions earmarked for transportation.
The transportation budget relies on fuel taxes. Gas consumption peaked in 2018 and has been dropping since, driven by more fuel-efficient and electric vehicles.
But last week’s updated forecast shows gas consumption not falling quite as quickly as previously expected, providing that project revenue boost.
For over a decade, some Democrats have toyed with the idea of a road usage charge that drivers have to pay per mile. A proposal from the chair of the House Transportation Committee pegs that cost at 2.6 cents per mile. This concept wasn’t included in the Senate’s proposal. Even if that system were adopted, it would take time to set up.
Sen. Marko Liias, D-Edmonds, who chairs the Senate Transportation Committee, has consistently said new transportation revenue sources need to be bipartisan. Republicans have been steadfast in their opposition to the road usage charge.
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