State Democrats remove proposed fuel export tax from transportation package

Feb 26, 2022, 7:06 PM | Updated: Feb 28, 2022, 6:44 am

Fuel tax...

(Getty Images)

(Getty Images)

A fuel export tax proposed by Democrats in the Washington state Legislature is officially dead, after it was removed from a 16-year transportation package on Saturday.

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

The proposal would have levied a $0.06 per gallon tax on fuel refined along the Puget Sound, which is then shipped to states like Oregon, Alaska, and Idaho.

Leaders in all three states roundly criticized the tax, with each making threats to enact retaliatory measures in what appeared to be the early signs of an interstate trade war. That criticism ultimately was what fueled the decision from Washington Democrats to cut the tax from the package altogether.

“People told us loud and clear that this was not going to work,” state House Transportation Chair Jake Fey said in a Saturday press release.

Legislative staff in Washington estimated that the tax would have added roughly $2 billion to the state’s Motor Vehicle fund over a 16-year period. On a larger scale, supporters pointed out that Washington has been assuming the environmental risks and impacts brought on by refining oil along the Puget Sound, without reaping any of the rewards from exporting it out-of-state.

It’s unclear how Democrats plan to replace the funding the tax would have provided the transportation package, with Fey stating only that they will “review the investments as well as other revenue options” moving forward.

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State Democrats remove proposed fuel export tax from transportation package