Gas Tax Debate Heats Up Again
April 2003
Last November Washington voters turned down Referendum 51, an $8 billion statewide road-building plan that would have boosted the state gas tax by nine cents a gallon. It also would have increased truck weight fees by thirty percent, raised the sales tax on new and used cars and authorized $4.6 billion in state bonds. The measure went down to decisive defeat, failing in all but one of Washington's 39 counties.
Four months later, lawmakers in Olympia hope the public's opposition to a higher gas tax has cooled, so they are warming up some new proposals to fund sorely-needed transportation improvements. This time they hope a smaller tax increase will meet less resistance from Washington drivers.
State leaders are proposing three plans to pay for upgrading the transportation infrastructure. The plans reflect the deep political differences that divide the policymakers offering them. House Democrats want a three-cent gas tax increase that delivers considerable new money to public transit. A bipartisan plan in the Senate proposes a five-cent increase that will focus most of its funding on congestion-reducing road projects. Noting that some 95% of daily trips are made by private automobile, proponents say road improvements should take top priority.
Seeking a middle way, Governor Locke is pushing for a four-cent increase that tries to balance the needs of the driving public and the desires of influential mass transit unions and environmentalists. All this can get very confusing for the average citizen who will have to foot the bill for whichever proposal becomes law. For that reason Washington Policy Center is conducting an independent review of each plan. The main elements of the plans are summarized below.
|
2003 Gas Tax Increase Proposals |
|||
|
|
House Democrat Plan |
Governor's Plan |
Senate Plan |
Gas Tax Increase |
3 cents |
4 cents |
5 cents |
Highway System Spending |
$1.9 billion |
$2.6 billion |
$3.7 billion |
Public Transit Subsidy |
$385 million |
$242 million |
$185 million |
Other Spending |
$264 million |
$305 million |
$268 million |
Total New Spending |
$2.6 billion |
$3.2 billion |
$4.1 billion |
Other New Taxes |
15% increase in truck weight fees, 0.6% new and used vehicle sales tax |
15% increase in truck weight fees, apply truck weight fees to motor homes, 0.5% title excise tax |
15% increase in truck weight fees, apply truck weight fees to motor homes, 0.3% new and used vehicle sales tax |
Along with knowing the details of each plan it is also important to be aware of what else the legislature needs to consider. Several bills being debated would fundamentally change the way the Department of Transportation does business. One reason Referendum 51 was so heartily rejected was voters did not trust the Department to spend new funding wisely.
There is a clear need for efficiency improvements at the Department of Transportation. One proven reform would be to allow competitive bidding for regular highway maintenance. That policy change alone would boost DoT's budget by at least $25 million a year. The savings estimate is based on a DoT audit and the experience of states like Massachusetts and Virginia that have been contracting out routine highway maintenance for years.
Another money-saving improvement would be to end the state's monopoly on passenger ferry service across Puget Sound. Ferry managers say they are ending passenger service on June 15th, yet they won't support repeal of the law that blocks private companies from stepping in to provide the public with the same service.
One major source of waste is the state's archaic prevailing wage law, which artificially drives up the cost of public road projects. If for political reasons this uneconomic statute can't be repealed outright, it should at least be reformed so that labor costs in rural areas are not based on the cost of living in large cities.
And of course performance audits by an independent authority, like the state auditor, are sorely needed to ensure transportation dollars are not only spent legally (the basis of current audits), but also efficiently.
West coast gas prices have soared 45 cents per gallon since January 1, so it is hard enough to go to the public with a gas tax increase of any size. But Washington voters are likely to remain especially skeptical of any tax proposals that don't reduce congestion or come with real reforms to ensure current and future public road dollars are used in the best way possible.