Washington Considers Gas Tax Hike for Budget Shortfall

Washington state lawmakers are proposing a 6-cent per gallon increase in the state gas tax as part of a bipartisan effort to address a transportation budget shortfall, marking the first increase since 2016, with the tax set to rise by 2% annually to account for inflation. This is part of a broader $16.2 billion transportation budget plan for the 2025-2027 biennium, which also includes increased fees for electric vehicles and a new tax on luxury vehicles. The plan aims to generate $1.5 billion over the next six years to mitigate a projected $1 billion budget shortfall over the next two years, potentially growing to $8 billion by the decade's end. Concurrently, the Senate Democrats have proposed a $77.7 billion operating budget over two years, with new investments and planned savings, though concerns have been raised about using state reserves. State Treasurer Mike Pellicciotti warns against depleting reserves as it could impact Washington's credit rating and economic resilience. The proposed transportation and operating budgets are currently under deliberation, with public hearings scheduled in the Senate Transportation Committee.