Democrats, Republicans agree on proposed 6-cent gas tax increase to address $1B shortfall
Mar 24, 2025, 5:30 PM
A gas pump is seen situated into a vehicle at a Shell gas station. (Photo: Brandon Bell via Getty Images)
(Photo: Brandon Bell via Getty Images)
A bipartisan group of Washington State Senate leaders unveiled their proposed 2025-2027 transportation budget on Monday, focusing on addressing the state’s transportation shortfall and tackling rising traffic fatalities.
At the center of the proposal is a 6-cent per gallon increase in the state gas tax starting in 2026. The increase would raise the state portion of the gas tax to 55.4 cents per gallon. Currently, the federal gas tax is an additional 18.4 cents per gallon. The gas tax will also be indexed to rise by 2% annually through 2031 to keep up with inflation and construction costs.
Without new revenue, the transportation budget faces a $1 billion shortfall over the next two years, potentially growing to $8 billion over six years. Senate Transportation Committee Chair Marko Liias (D-Edmonds) stressed the importance of balancing fiscal responsibility with the need for vital investments in infrastructure.
“There’s no question, as we’re asking Washingtonians to pay more for transportation services,” Liias said during a press conference. “We need to do a better job of delivering projects on time and on budget. In transportation, time is money,” Liias said.
Luxury-vehicle tax proposed with gas tax
Other proposed revenue streams include a 10% luxury-vehicle tax on the portion of the sale price that’s more than $100,000, a $1-per-attendee assessment on venues that hold large events with more than 20,000 attendees, a $10 assessment on all traffic infractions, and a $125 fine for speeding in work zones.
Senator Curtis King (R-Yakima), ranking Republican on the Senate Transportation Committee, acknowledged the challenge of raising the gas tax but emphasized its necessity.
“So our choices were, we either made cuts to find that billion dollars, or we looked at what we could do to find new revenue, and we chose the latter,” King said.
Both Liias and King said Senate Democrats and Republicans have been working side by side on the transportation budget since the very beginning of this legislative session, and both sides agreed an increase in the state gas tax was needed.
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Budget proposal addresses traffic safety
The proposed budget also aims to tackle Washington’s ongoing traffic safety issues. With traffic fatalities rising sharply, the state recorded over 800 deaths in 2024 — the highest in 33 years. In response, the budget includes $450 million for highway safety improvements, such as safer road infrastructure, improved traffic enforcement, and measures to protect pedestrians and cyclists.
The gas tax hike is also critical for funding key capital projects throughout the state. These projects include the North Spokane Corridor, upgrades to State Route 18, and new hybrid electric ferries. The proposal ensures these projects can move forward without significant delays, although Washington Governor Bob Ferguson has delayed the construction of two hybrid ferries until after the 2026 World Cup games in Seattle.
To address cost overruns and inflation, the budget sets aside $1.1 billion over six years for ongoing projects, ensuring that they remain on track.
“We need to secure funding now to prevent project delays later,” Liias said.
The budget also includes reforms to streamline transportation projects, such as expedited environmental permitting, especially for fish barrier projects, and more efficient ferry construction processes.
“We’re not just looking at raising revenue but also making sure we deliver results faster,” Liias said.
The budget plan includes 13 furlough days in fiscal year 2026 for state transportation workers, excluding certain essential employees. This aligns with a similar proposal made by Senate Democrats on Monday for other state employees to be furloughed, representing a 5% wage cut.
A Democratic proposal to move billions of dollars from the transportation budget to the capital budget, needed to complete the court-ordered fish passage projects, will be made next week. The proposal also includes making permanent the transfer of 0.3% of sales tax collections from the operating budget to the transportation budget.
Additional revenue sources include higher fees on electric vehicle registrations from $25 to $100 per year, a new tax on luxury vehicles over $100,000, increased rental car taxes, and a $10 assessment on traffic infractions.
Matt Markovich is the KIRO Newsradio political analyst. Follow him on X.
