Policy Brief

In 2006, Governor Christine Gregoire negotiated an agreement with Washington State Indian tribes that exempts tribally owned fuel stations from paying 75% of state gas taxes.

This year the state will give Indian tribes approximately $22 million in state fuel tax revenue. And the amount will certainly grow as tribes continue to add more fuel stations. Taxpayers will pay approximately $621 million to tribes over the next 17 years.

Appealing a lower court decision, a group called the Automotive United Trades Organization (AUTO) has filed a lawsuit requesting direct review by the Washington State Supreme Court.  Washington Policy Center (WPC) filed an Amicus Curiae Memorandum in support of AUTO’s petition for direct review.  The Washington State Supreme Court granted WPC’s motion and accepted the Amicus Brief on August 15, 2011.

WPC is asking the Washington State Supreme Court to review the prior decision of a lower court that dismissed AUTO’s lawsuit.  WPC has made this request because:

1. The state’s payments of Motor Vehicle Fund monies (fuel tax revenue) to Indian tribes for non-highway purposes violates Washington’s constitution and harms local businesses.
2. The secrecy inherent in the government’s compacts is improper and anathema to Washington’s established values of open government.
3. The state cannot afford to unnecessarily provide Indian tribes with constitutionally protected transportation funds.

WPC research indicates that tribal stations consistently charge less for fuel than the regional average.  This competitive advantage allows tribal station owners to undercut non-tribal fuel stations, and ultimately run them out of business.  WPC’s full report on gas prices will be available in September, 2011.

Read WPC's Amicus Brief here.