Gas-sipping cars eat into state’s gas tax revenue

VANCOUVER, Wash. — To the list of woes facing a cash-strapped state government, now add fuel efficiency.

In Washington, motorists pay 37.5 cents on each gallon of gas. The money generates the bulk of revenue needed to build and maintain state highways, and it’s a significant source of money for county road projects as well.

Here’s the problem: Motorists require much less gas than they used to.

Automobiles are more fuel-efficient, people are driving less and, increasingly, they are driving automobiles that aren’t powered by petroleum at all.

“All of those things add up to the fact that we aren’t going to rely on the gas tax as being the mainstay of the future if we want to maintain, preserve and improve our transportation system,” said Paula Hammond, the state’s transportation secretary.

A new report compiled for the Legislature’s Joint Transportation Committee indicates that the trend could result in a $3.8 billion revenue shortfall by the year 2025 — the horizon of a 16-year financial plan adopted by the Legislature last year. A risk analysis projected the average per-capita gasoline consumption falling from 500 gallons currently to about 425 gallons in 2025.

The report noted that in the state’s 2009 fiscal year, for the first time ever, total fuel consumption declined from the previous year.

Of course, much of that decline is due to the recession and high unemployment rates.

Hammond noted that lawmakers are unlikely to make sweeping changes in transportation funding at a time of economic recession.

“It’s not a 2010 thing, for sure,” she said.

As one possible long-term solution, the JTC’s report recommends tying the gas tax to the Consumer Price Index. Hammond said indexing the gas tax could help revenue keep pace with demand for major transportation improvements when the economy’s growing, while contracting during hard times.

States use a variety of taxes and fees to pay for transportation. But only one state, Maine, has indexed its gas tax.

The state bumped the gas tax by 5 cents in 2003 and 9.5 cents in 2005, the first increases since the early 1990s. The infusion of new money underwrote numerous highway improvement projects across the state.

“Folks are saying, ‘When do we get our project?’ ” Hammond said.

Four gigantic transportation improvements are looming, including a new I-5 bridge across the Columbia River. The others are a replacement for Seattle’s Alaskan Way Viaduct, the Highway 520 floating bridge across Lake Washington and a north-south freeway for Spokane.

Lawmakers are looking for ways to close the gap.

“These are multibillion-dollar projects, and there just isn’t the funding within the current gas tax to pay for these things,” said Rep. Jim Moeller, a Vancouver Democrat who serves on the House Transportation Committee.

Moeller worked with Rep. Jeff Morris, D-Mount Vernon, to co-sponsor a bill creating a 2.5-cent fuel tax for each gallon exported out of Washington refineries. Rep. Jim Jacks, D-Vancouver, is another co-sponsor. Currently, fuel exported out of the state is exempted from the 37.5-cent tax.

Moeller’s bill would change the exemption to 35 cents on each exported gallon, allowing the state to collect the 2.5 cents for transportation projects here.

He said the bill would generate about $17.5 million per year, with 60 percent going to support the state’s cash-strapped ferry system and 40 percent toward the state’s share of the Columbia River Crossing project.

Moeller, who noted that more than half of Washington’s exported fuel goes to Oregon, said thousands of Vancouver-area commuters pay Oregon income tax with no corresponding benefit.

“We don’t want to get in a tit-for-tat war with Oregon, but at the same time, Oregon could use a little reminder that we do fund their work force by providing them with 60,000 skilled workers every day,” Moeller said. “I’m hoping we’ll end up working together a little more.”

The federal Highway Trust Fund supplements transportation projects in Washington, but it, too, heavily relies on a federal gas tax subject to the same revenue trend. Together, Hammond said, state and federal gas taxes account for 75 percent of transportation funding in the Washington state. Vehicle license fees, bonds and ferry fares provide the rest.

Information from The Columbian: www.columbian.com