Washington state

State gas tax could be phased out by pay-per-mile tax in 10 years

Washington state would continue to collect a gas tax for at least 10 years if the Legislature decides to phase in a pay-per-mile tax, according to a presentation made Tuesday to the state’s transportation commission.

State officials are weighing a system in which motorists would be charged for how far they drive because the state’s 49.4 cents per gallon gas tax — which is used to fund roads and bridges — is being eroded by increasingly more fuel-efficient cars and more electric vehicles.

The commission was presented with three scenarios by consultants working with a 29-member steering committee that includes legislators and representatives of consumer groups:

  • Under all three options, a pay-per-mile tax—which the state calls a road usage charge—would be introduced within five years for plug-in electric vehicles, hybrids, and state government vehicles.
  • Vehicles that get high miles per gallon would be added within five to 10 years. A high-mileage vehicle has not been defined yet.
  • Beyond 10 years, all new vehicles would be added, starting with model years 2030.

Lawmakers would decide what the pay-per-mile rate would be. The state has studied setting it at 2.4 cents per mile. Lawmakers would have an option to charge less, for example, for owners of environmentally friendly vehicles or those with low incomes.

On Tuesday, commission members said they’re comfortable with the three scenarios. Also, the panel said it will consider a recommendation to the Legislature that revenue from a pay-per-mile tax, like the gas tax, could only be spent only highways. Also, the commissioner will consider a recommendation to change state law to protect personal privacy, such as making individual mileage data exempt from the public records law.

The transportation commission is scheduled to vote Dec. 17 on all of its recommendations to the Legislature. That likely will trigger a major debate when lawmakers convene in January 2020 over whether charging some motorists by the mile is the best policy for the state’s transportation system and if the complexity of it can be sold to voters.

The 10- to 25-year phase-in is required because the state has sold bonds for transportation projects based on revenue from the gas tax. Those bonds would have to be paid off before the state replaced the gas tax completely with a pay-per-mile system. The most likely scenario is 10 years, said Jason Richter, deputy state treasurer for debt management.

During that phase-in period, the state would maintain a system where the gas tax remains in place along with a pay-per-mile tax. Through refunds or credits, motorists of gas-powered vehicles would not pay both taxes. Commercial vehicles and trucks would be exempt from the pay-per-mile system. Out-of-state drivers would continue to pay the gas tax.

The Legislature in 2012 directed the transportation commission to study the potential of a road usage charge to replace the gas tax.

Last January, Washington wrapped up a one-year pilot program to assess how state residents would feel about replacing the gas tax with one based on how far people drive. Participants in Washington had five options in the test, ranging from taking a picture of their odometer to using a plug-in device with a GPS to reporting their miles driven to the state.

When asked for their advice to elected officials, 61 percent said to move forward with a pay-per-mile system either immediately or phased in over five to 10 years, 28 percent said move forward but apply it more narrowly such as requiring high-mileage vehicles like hybrids and/or plug-in electric vehicles to pay; and 10 percent said to take no further action.

In 2015, Oregon became the first state to launch a pay-per-mile system, and it was voluntary. Participants set up an account with the state. They pay 1.7 cents per mile. State gas tax paid at the pump is credited to their account. Only vehicles that get at least 20 mpg are eligible.

Maureen Bock, manager of the Oregon Department of Transportation’s Office of Innovation, gave the commission an update on Oregon’s program, which has owners of about 600 passenger vehicles enrolled.

Commission member Debbie Young asked if enrollment is expected to increase.

“It’s actually pretty flat,” said Bock, adding that a small pilot program was set up by design because it takes time to educate vehicle owners about how a pay-per-mile system works.

“I’m actually glad we have 600 vehicles in the program instead of 6,000. We can get lots of experience so we can build a larger program,” she added.

James Drew covers the state Legislature and state government for McClatchy’s Washington papers: The News Tribune, The Olympian, The Bellingham Herald and The Tri-City Herald.