Washington’s proposed gas export tax is ‘unacceptable,’ says Oregon governor

Among the many measures laid out by Washington Democrats in a proposed $16 billion transportation package is a tax on refined fuel exported to states like Oregon, Idaho, and Alaska. But as the package has moved along in the Legislature, the states that would be subject to the levy are speaking out against it.

Multi-billion dollar transportation package would strike down repeal of fuel export tax

Washington state makes up 3.3% of the United States’ capacity for refined petroleum exports, according to 2019 data. In cities like Seattle, drivers often struggle with gas prices above $4 a gallon, in part due to a state-level $0.49 a gallon gas tax. That said, fuel exported outside of the state is exempt by law from that levy. The proposed transportation package from Democrats would repeal that exemption, passing the costs on to neighboring states that depend on fuel refined along the Puget Sound.

According to the U.S. Energy Information Administration, over 90% of Oregon’s fuel comes from Washington, making it the state that would likely be hit the hardest by a potential export tax. That had Oregon Governor Kate Brown speaking out against the proposal on Thursday following a conversation with Washington Gov. Jay Inslee.

“I spoke with (Gov. Jay Inslee) today and made very clear that Washington taking unilateral action to increase gas prices for Oregon families and businesses is unacceptable,” she said on Twitter. “Washington leaders should know their actions will impact Oregonians’ lives. Continued collaboration between our states will always lead to better outcomes for both Washington and Oregon.”

Washington leaders should know their actions will impact Oregonians’ lives. Continued collaboration between our states will always lead to better outcomes for both Washington and Oregon.

— Governor Kate Brown (@OregonGovBrown) February 18, 2022

Others within Oregon’s state leadership expressed the possibility of taking action against Washington should the fuel tax be implemented.

Washington Democrats unveil expansive $16 billion transportation package

“I suppose, if enacted, Oregon will look at ways to retaliate,” Oregon state Sen. Lee Beyer — who chairs the state’s transportation committee — told Oregon Public Broadcasting (OPB).

Legislative staff in Washington estimate that the tax would add roughly $2 billion to the state’s Motor Vehicle Fund over a 16-year period. And as proponents like state Sen. Rebecca Saldana have noted, nearly half the oil refined in the state “goes out without any benefit to our local transportation system.”

Others have pointed out that Washington has been assuming the environmental risks and impacts brought on by refining oil without reaping any of the rewards.

“In terms of fairness, I think it is only appropriate since we produce the fuels for their use that they support our climate activities and our overall activities in the package,” Washington state Rep. Jake Fey said in a statement to OPB.

MyNorthwest reporter Dalton Day contributed to this story.

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