Washington’s gas tax was given special protection in 1944 by the 18th amendment to the state constitution, but it turns out it may not be so special.
The amendment says all revenue from the tax on motor vehicle fuel – $1.2 billion in 2011 – is to be dedicated to transportation-related expenditures: highway construction, state ferries, even law enforcement. Washington residents tolerate the high 37.5 cents-per-gallon tax based on their faith it will go where the constitution says it will go. And it has.
But in 1988, voters approved Initiative 97, which added a .7 cents per dollar hazardous substances tax that has been levied on pesticides and the like, but about 85 percent of the revenues come from taxes paid by refineries in Washington.
The revenues were supposed to be dedicated to the cleanup of hazardous waste, including many sites in Eastern Washington. In Stevens County, in one unusual example, residents got $200 out of the fund for each old wood stove they turned in to the Department of Ecology. So far, so good, although some were raising questions about the constitutionality of the diversion to non-highway expenditures right from the day the law was enacted.
Gasoline, remember, cost less than $1 per gallon back in 1988. The .7 cents raised about $40 million. With gas at nearly $4 per gallon, the revenues in 2011 jumped to $175 million. Meanwhile, hundreds of those dirty waste sites have been cleaned up. The money not being spent on the remaining sites has become a piggy bank; first for the DOE and efforts like cleaning up Puget Sound, and lately for the Legislature, which in 2009-2010 swept more than $200 million of that money into the general fund for spending on whatever.
When there was talk in Olympia of tripling the tax, the Automobile United Trades Organization ran out of patience and sued. Earlier this month, it won, sort of. The Washington Supreme Court ruled unanimously that the Legislature can tax gas for whatever purpose it wants, as long as the law states an intended use for the revenue.
So, when is a gas tax not a gas tax? When the Legislature says it isn’t, which will come as a surprise to drivers who pay an extra two or three cents per gallon to clean up a shrinking inventory of hazardous waste sites, with the residual revenue cleaning up the state’s budget deficit.
Again, the diversion does not apply to the 37.5 cents-per-gallon that is explicitly dedicated to highways, ferries, etc. But it does raise questions about whatever revenue package the new governor and Legislature come up with to finance big highway projects like the North Spokane Corridor and Interstate 5 bridges over the Columbia River. Republican gubernatorial candidate Rob McKenna has already said such a package will be one of his priorities should he be elected.
More money is going to be needed. But before the folks in Olympia come up with new transportation-related taxes, they might want to rethink what they are doing with gas tax revenues already in hand, but diverted to other purposes.
We’ve been down that road before.
Subscribe to the Morning Review newsletter
Get the day’s top headlines delivered to your inbox every morning by subscribing to our newsletter.