Washington Gov. Bob Ferguson has signed into law a $15.5 billion two-year transportation-funding budget. The biennial budget includes new and increased taxes and fees.
The transportation budget covers operating costs and capital projects. Capital expenditures are allotted $9.2 billion, and operating expenditures will receive $6.2 billion.
Funding is appropriated for construction, preservation, operations and multimodal projects across the state. Money is included for the Washington State Department of Transportation and the Washington State Patrol.
The budget package provides revenue to maintain and improve the state’s roads, bridges, ferries and transit systems.
Senate Transportation Committee Chair Marko Lias, D-Edmonds, said in prepared remarks that the budget is a “sensible, bipartisan solution that balances multiple funding tools while keeping the system running smoothly.”
House Transportation Committee Chair Jake Fey, D-Seattle, said the transportation-funding budget will support critical projects that include the Interstate 5 bridge in Vancouver, the Spokane North-South Freeway, the Gateway Project and the I-5 Fort Lewis Project.
“(The transportation budget) funds long-overdue maintenance and preservation projects, supports transit and multimodal infrastructure and modernizes how we invest in safety and mobility,” Fey said.
First fuel tax increase in nine years
Three bills make up the transportation budget – SB5161, SB5801 and SB5802. The lead bill is expected to raise $3.2 billion over six years through a mix of new and adjusted revenue sources.
The most notable change is a 6-cent increase in the state’s fuel excise tax. For the first time since 2016, the gas and diesel rates will increase on July 1.
The governor said the state needed to do something to give transportation funding a shot in the arm.
“The people of Washington expect us to invest in those projects, but we have limited revenue options right now,” Ferguson said at the bill signing. “The gas tax, unfortunately, is one of them.”
The gas tax will increase by 6 cents to 55.4 cents. The diesel tax will increase by 3 cents on July 1 and again in July 2027 to reach 55.4 cents.
An inflationary adjustment is included. The inflation-based increase for gas will take effect in 2026. The adjustment for diesel will start in 2028.
Local governments will get 5% of the new fuel tax revenue.
Critics said the higher fuel tax collection would drive up transportation and delivery costs for all products and services in the state.
More vehicle fee increases
Many motorists and truck drivers will soon be responsible for paying higher license fees based on weight to bolster transportation funding.
Advocates said the increased weight fees were necessary “to ensure those causing more wear and tear on roadways contribute their fair share.”
There will be no increase for annual registration fees for electric and hybrid vehicles.
Commercial vehicles weighing 80,000 pounds will see the $1,740 annual fee raised by $90 to $1,830.
License fees for personal and commercial vehicles will also be adjusted annually through a fee increase of 2%.
Passenger vehicle weight fees will increase between $10 and $24. Truck weight fees will be standardized to $30 per ton.
The motor vehicle sales tax will also be raised from 0.3% to 0.5%.
“Raising fees and taxes is not something we take lightly, but we determined it was the only solution to address our state’s transportation challenges,” stated Sen. Curtis King, R-Yakima.
New vehicle fees
A new luxury tax will be collected on certain vehicles.
An 8% tax will be collected on motor homes over $100,000. A 10% tax will be charged on aircraft exceeding $500,000. Certain watercraft will be subject to a new 0.5% tax. LL
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