Alaska governor urges Washington to ‘rethink’ controversial fuel export tax

Feb 25, 2022, 11:18 PM | Updated: 11:41 pm
Alaska fuel export tax...
Alaska Gov. Mike Dunleavy. (AP Photo/Becky Bohrer, File)
(AP Photo/Becky Bohrer, File)

As a proposed fuel export tax continues to progress through the Washington Legislature, leaders in the states that would be affected by the levy are urging lawmakers to reconsider.

The proposal — wrapped into a $16 billion transportation package — would levy a $0.06 per gallon tax on fuel refined along the Puget Sound, which is then shipped to states like Oregon, Alaska, and Idaho.

In mid-February, Oregon Gov. Kate Brown labeled the tax “unacceptable,” while leaders in all three affected states have since hinted at potential retaliatory measures should Washington move forward with it.

One Alaska lawmaker has already floated two such ideas, one of which would levy a $0.06 per pound landing tax on fish caught in Alaskan waters, while the other would be a $0.06 per foot tax on any boat that moors in the state’s harbors. That would apply to all Washington fishing vessels with home ports in Ballard but that fish in Alaska.

Speaking to KTTH’s Jason Rantz Show, Alaska Gov. Mike Dunleavy did not specify whether he supported either proposal, but did express that his office will “unwrap the package when (Washington lawmakers) decide where they going to go on this particular tax.” Dunleavy then directed a plea toward Washington Gov. Jay Inslee, urging him to speak out against the proposal.

“Governor, rethink this whole fuel tax on your fellow governors and fellow states,” he warned. “It’ll just cause folks to start to think in other states, how can we retaliate against Washington?”

Former state AG: Fuel export tax not likely to survive court challenge

“There are other ways for you to raise money not off the backs of other states,” Dunleavy added.

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. On a larger scale, supporters have pointed out that Washington has been assuming the environment risks and impacts brought on by refining oil along the Puget Sound, without reaping any of the rewards from exporting it out-of-state.

The bill that includes the fuel export tax has been already been passed out of committee in the state House, and will next need to go before the full chamber for a vote.

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Alaska governor urges Washington to ‘rethink’ controversial fuel export tax