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“The Impact” – New Momentum for Pay-Per-Mile Tax in Olympia

Mike McClanahan profile by Mike McClanahan

Watch “The Impact”: June 2nd, 2021

Is Washington heading  for a pay-per-mile tax on drivers? The road usage charge concept has been explored by the Washington State Transportation Commission for several years as a future replacement for fuel tax. The tax on gasoline and diesel is the largest source of funding for highway and bridge construction and maintenance, but transportation planners fear it won’t be reliable in the future.

“Our transportation system, our roadways and bridges are in great need of significantly increased investment in just maintenance and preservation to maintain what we have,” said WTSC Executive Director Reema Griffith.

Griffith says gas tax revenue is projected to flatten out then fall off as electric vehicles replace cars, trucks, and SUVs that run on gas and diesel. The transportation commission oversaw a year-long pilot project involving the road usage charge or RUC. The pilot involved around 2,000 drivers from different backgrounds across the state.   SB 5444,a bill to establish the state’s first road usage charge, stalled during the 2021 Legislative Session. 

“The bill really just focused on road usage charging being applied to electric vehicles by 2026 and it would be mandatory at that time,” said Griffith. “The bill currently remains in the Rules Committee on the Senate Floor and so we continue to do work on that.”

However, lawmakers did pass a target date for restricting new vehicle registrations to electric vehicles and they tied the effective date to the widespread adoption of a road usage charge or similar system.  Although, the governor vetoed that section of the bill, Senate Transportation Committee Chair Steve Hobbs (D-Lake Stevens) included a road usage charge in his Forward Washington transportation funding package

Senator Hobbs addressed the topic during an Impact interview last month.

“We’re having declining gas tax revenues and that’s, that’s a problem,” said Hobbs.

A big question for policymakers is whether or not the money raised by a road usage charge should be covered by the 18th amendment of the Washington State Constitution, like the gas tax. Unlike most state tax revenue, dollars brought in by the gas tax, cannot be used for anything except transportation infrastructure related needs. Transit advocates have proposed splitting pay-per-mile revenue between roads and public transportation, or adding a separate road usage charge for transit on top of whatever might be approved for roads.

“The commission did provide recommendations to the legislature in 2020 that if they were to implement a road usage charge, they should make the revenues generated from that dedicated to highways under the 18th Amendment just like the gas tax is today,” said Griffith.

Unlike the pay at the pump, end of transaction nature of the gas tax, the framework for a road usage charge, once built, could be adapted for a variety of different purposes. There has been discussion about whether to use a road usage charge as a way to impose congestion pricing on non-tolled roads.  Griffith said she doesn’t think people who oppose the idea of congestion pricing should be worried about a road usage charge being used for that purpose.

“We don’t really see that risk and it’s certainly not part of any of the proposals that have been put forward by legislators or by the commission for that matter. Certainly just because something can be done, doesn’t mean it should be done. And I think that’s true with our existing tolling systems and a number of things we’re doing today, just with data being such a big part of our lives,” said Griffith. “The commission has made a very clear recommendation that tolling be kept separate from road usage charging. We don’t see it as a mechanism today that should be used for pricing or time of day pricing or congestion pricing like we have on the express toll lanes on the I-405 and 167 corridors.”

Mariya Frost, a transportation analyst for the Washington Policy Center,  doesn’t think it’s a stretch to imagine that a road usage charge would be used as more than a gas tax revenue replacement in Washington.

“I think it is a significant risk actually. You know, the Seattle Department of Transportation has said to the commission that they believe the road usage charge should include congestion factors in its pricing model and the Washington State Department of Transportation Secretary Roger Millar also indicated that when he was speaking with leadership in DC in the House Transportation and Infrastructure Committee, the Senate Environment, the Public Works Committee, he said that the chairs and ranking members of those committees all want to see road usage charges happen sooner than later and all of them want that construct to include congestion pricing which he says is the ability to vary the pricing by geographically by where you are, by the time of day, and by trip purpose,”  said Mariya Frost, Director, Coles Center for Transportation, Washington Policy Center.

The pay-per-mile concept could come up again this year if legislators convene for a special session to address transportation funding.  

“I expect it to be part of that and if it is I will again reiterate that a road usage charge should not be a line item in a larger discussion. It needs to be a standalone policy and voted on independently. And I think it’s really critical that lawmakers get to vote and deliberate on this specific policy change alone,” said Frost. “If it looks anything like the road usage charge that was included in the revenue package then I think we have a problem.“ 

Critics of the road usage charge concept have raised concerns about privacy, practicality, and administrative costs. Implementing such a program entails keeping up with the miles of millions of drivers, collecting the tax, and accounting for out of state travel- like the daily grind for Vancouver to Portland commuters.

“The cost to send those bills and administer that is really expensive, substantially more expensive than a gas tax which is less than one percent to collect, whereas a road usage charge is 5-13% of collections or more which means that it would inevitably, they would inevitably have to spike the per-mile-charge in order to make up for how much they’re spending on administration. I mean you can look at the I-405 tolls and the system there and people getting false bills and I would imagine we can expect some of that with a road usage charge as well. It’s a huge, huge overhaul of how we pay for transportation in the state,” said Frost. 

 Frost believes there are unexplored options for reducing the costs of  road and bridge construction that the legislature should consider first.

 “… look at prevailing wage and environmental permitting, I think cost needs to be a part of that conversation. It shouldn’t just be about finding a revenue source that generates loads of money for the legislature to use. We should also look at cutting costs and look for  ways to reduce spending in areas that are not necessary and are not a part of what the Washington State Department of Transportation should be doing,” said Frost.