Washington state would move toward replacing the gas tax with a pay-per-mile system under a proposal the state Transportation Commission is expected to vote on late this year.
The commission expects to receive a report in October from a panel that has studied the new type of tax. The time line calls for commission members to debate the details and vote Dec. 17 on its recommendations to the Legislature, which convenes on Jan. 14, 2020.
It’s too early to say how the commission will vote, said chairman Jerry Litt. He said he expects many state residents would pay more under a pay-per-mile tax, which the state calls a “road usage charge.”
Litt participated in a pilot project to gauge how state residents would feel about replacing the gas tax with one based on how far people drive. Consultants hired by the state to run the year-long project set a rate of 2.4 cents cents per mile, so participants could figure out how much they would have to pay compared to the state portion of the gas tax, which is 49.5 cents per gallon.
“The car that I was using had about 23 miles per gallon. Some months I would have paid $6 more, some months it was $8 more and some months it was $2 more,” he said.
Sen. Rebecca Saldana, vice chairwoman of the Senate Transportation Committee, said the state is considering a pay-per-mile charge because more fuel-efficient vehicles have eroded the state’s ability to rely long term on the gas tax for transportation needs. She said the debate focuses on how to structure a tax without it relying solely on gasoline.
“There has to be a sustainable source of funding,” said Saldana, a Seattle Democrat who is the Senate’s deputy majority leader.
Saldana said if the Legislature supports a pay-per-mile system, it would have to be phased in over 10 to 25 years because the state has sold bonds for transportation projects based on revenue from the gas tax. Those bonds would have to paid off before the state replaced the gas tax completely with a pay-per-mile system.
During that 10 to 25-year period, the state would maintain a system where the gas tax remains in place along with a pay-per-mile tax that would be phased in. Owners of passenger vehicles and pickups would owe either the pay-per-mile tax or the gas tax — but not both. Commercial vehicles and trucks would be exempt.
The phase-in could involve, for example, subjecting only newer cars or the highest-mileage vehicles to the pay-per-mile tax. Those motorists would receive a credit on gas taxes they would pay.
“A road usage charge is not a minor tweak; it’s a major policy shift,” said Jeff Doyle, a partner with D’Artagnan Consulting, a Texas-based firm with an office in Seattle which is working on the project.
The Legislature would set the rate for the pay-per-mile tax and the methods in which the state would track how many miles are driven. Options range from motorists taking pictures of their odometer to a smart-phone app that would transmit the data to the state. Another option could be a high annual tax for those who don’t want to report their mileage to the state, citing privacy concerns.
A high-mileage hybrid vehicle generally would pay more under the pay-per-mile system than the gas tax, with lower mileage vehicles paying less. To discourage gas guzzlers, the Legislature could charge motorists with lower-mileage vehicles a higher rate per mile or require them to pay the same amount as those with higher mileage vehicles.
On Tuesday, D’Artagnan Consulting presented its findings to the transportation commission on a year-long project to gauge what state residents think about moving to a pay-per-mile system. About 2,000 people participated in the project by reporting their mileage, which enabled them to determine if they paid more or less than under the gas tax.
Of that total, 1,491 answered survey questions, with 33 percent saying the state should phase in a pay-per-mile tax to replace the gas tax over five to 10 years. Twenty-eight percent said the change should be as soon as the program can be ready.
Those surveyed also expressed concern that a tax based on the distance people drive would disproportionately affect lower-income householders who live farther away from work because of housing prices — and also rural motorists.
Litt, the chairman of the transportation commission, said there remain a lot of unanswered questions about the pay-per-mile tax proposal, such as whether people will pay it monthly, quarterly or perhaps annually.
“I’m not prepared to say I’m 100 percent for it or 100 percent against it, until I know what the operational costs are going to be. But so far, it does seem a fair system to put in place,” said Litt, a former director of planning and community development for the city of Lacey.