California's 12 cents GAS TAX INCREASE,
Road Repair and Accountability Act of 2017, $52.4 billion for
"transportation" over the next 10 years. This includes:
$24.4 billion by increasing the state excise tax on
gasoline by 12 cents per gallon;
$16.3 billion from an annual vehicle license fee
based on vehicle value;
$7.3 billion by increasing the state excise tax on diesel fuel by 20 cents per
$3.5 billion by increasing the sales tax on
diesel fuel to 5.75 percent;
$706 million through repayments from the state General Fund; and
$200 million from an annual $100 Zero Emission Vehicle fee that would start in
These funds would be split 50/50 between a
The 10-year forecast for the local funding portion includes:
$15 billion for local street and road repairs;
$7.5 billion for public
transit improvements; ( MARIN TRANSIT
gets $6m , SONOMA TRANSIT $1m, VTA $86m, CALTRAIN $36m)
$2 billion to support “self-help” counties in which voters have approved
dedicated transportation sales taxes. (These include all Bay Area
counties except Solano);
$1 billion to improve bicycle and pedestrian infrastructure;
$825 million for local contribution to State Transportation Improvement
$250 million for local transportation planning grants.
The 10-year forecast for the state portion of the funding package
$15 billion for highway repairs; ( MARIN TRANSIT gets $2.5m , SONOMA
TRANSIT $0.4m, VTA $36m, CALTRAIN $15m))
$4 billion to repair bridges and culverts;
$3 billion to improve freight-movement corridors;
$2.5 billion to reduce congestion in major commute corridors; and
$1.4 billion for other projects.
Here's how the funds will be diluted (distributed)
throughout the Bay Area.
Washington State has already gone through this process:
WPC's Recommendations on the State's 2012 Transportation Tax Package, Part I
This is part one of a five-part series of Legislative Memos that Washington
Policy Center offers for lawmakers to consider before preparing a statewide
transportation tax increase in 2012. The five recommendations are:
Taxes and fees paid by drivers should not subsidize other
modes of transportation.
Do not create a state-level tax or fee to fund local
transit agencies — public transit is not underfunded.
Stop diverting existing transportation
taxes and fees to pay for non-highway purposes.
Expand capacity, fix chokepoints and do not restrict new
resources to just maintaining the existing system.
see bottom of page
Part I: Taxes and Fees Paid by Drivers Should Not Subsidize
Other Modes of Transportation
Drivers have their own unmet infrastructure
In 2011, Governor Christine Gregoire created the Connecting Washington Task
Force. The group is made up of 31 individuals who were appointed by the
governor. In December, the task force recommended a vague ten-year, $20
billion transportation tax package. Task force members did not identify
specific projects nor did they recommend specific funding sources. Instead,
they identified broad investment areas and listed all the available funding
options that were already being considered including gas taxes, tolls,
higher sales taxes on vehicle purchases and other transportation-related
fees. The final package to be forwarded to voters is now up to state
legislators in Olympia and the governor.
Since the 1991–1993 legislative biennium, Washington’s transportation budget
has grown nearly 250%, from $2.1 billion every two years, to $7.2 billion
every two years. Some of the revenue growth stems from two motor
vehicle fuel tax increases in 2003 and 2005. Washington State’s gas tax rate
is currently 37.5 cents per gallon and ranks as the seventh highest in the
country. In 2000, drivers paid about $744 million in gas taxes and by
2010, gas taxes paid by drivers had risen to $1.2 billion, a 61% increase.
State lawmakers have also increased driver-related licenses, permits and
fees. In 2000, driver-related fees totaled about $315 million, and rose to
$511 million by 2010, a 62% increase.
These transportation taxes and fee hikes do not count the various local
increases that officials have imposed recently. Particularly in King County,
where taxpayers have experienced six significant increases in sales taxes,
property taxes and motor vehicle excise taxes to pay for public transit.
In 2001, statewide public transit agencies collected about $484 million in
sales taxes. By 2010, public transit agencies collected about $1.23
billion in sales taxes, a 150% increase in sales tax collections in just ten
Despite the significant growth in transportation taxes and fee revenue ,
state officials are now considering another increase. Before they ask voters
to pay more, WPC offers the following recommendations for state leaders to
consider when preparing a final ballot measure.
Taxes and Fees Paid by Drivers Should Not Subsidize Other Modes of
Drivers pay most of the taxes and fees that fund the state’s transportation
obligations. Nationally and in Washington state, the highway system was
constructed largely on the philosophy that users would pay. This user fee
theory successfully built 7,000 miles of roadway and allows Washingtonians
to drive nearly 60 billion miles per year, producing industry,
mobility, economic freedom and a higher quality of life for everyone. Over
the years however, more of the taxes and fees paid by drivers are being used
to subsidize other modes of transportation and other non-highway purposes.
Applying a multi-modal approach to a transportation tax package is
important, but the hands of government should not dig into the pockets of
drivers to subsidize these other modes. Drivers have their own
infrastructure needs and the taxes and fees they pay should fund road,
highway and bridge improvements. Likewise, transit users, bicyclists and
rail passengers should fund their own infrastructure needs, or rely on
local, general tax support. Historically, the primary funding source for
local transit agencies has been sales taxes. Sales taxes apply to the
broader public to support transit operations.
This same philosophy is precisely why gas taxes are protected by the 18th
Amendment to the Washington State Constitution.
In 1921, officials implemented Washington’s first gas tax of one cent per
gallon. With this new revenue stream, state leaders were able to build,
operate, maintain and expand Washington’s highway network. And as the
state’s transportation infrastructure needs increased, so did the tax.
Today, Washington’s gas tax rate is 37.5 cents per gallon.
Seventy years ago, as they often do today, politicians saw spending
opportunities in a new and stable revenue stream, and they began to divert
gas tax collections to programs and services not related to roads or
According to the Washington State Good Roads Association (WSGRA), more than
$10 million in gas taxes were diverted to other purposes in the ten years
between 1933 and 1943.
This gave rise to a popular statewide effort to protect motor vehicle fuel
taxes for their intended purpose. In 1944, Washington voters passed the 18th
Amendment to the state constitution, which limits the use of gas tax revenue
exclusively to roads and highways.
To gather support for the constitutional amendment, the WSGRA hit on the
natural attractiveness of a user fee system by stating, “Several hundred
miles of good, paved, safe highway would have been built to save money in
motor vehicle operation had this special motor tax money been used as it was
intended. These were highways and streets we paid for, but didn’t get!”
The measure passed and since then, gas tax revenues have been restricted
solely to “highway purposes” and to the benefit of the drivers who pay the
Raising transportation-related fees, raising the tax on the sale of vehicles
and using roadway tolls, all to subsidize other travel modes, are examples
of how this practice is unfair and siphons revenue paid by drivers that
should instead fund roads to reduce traffic congestion and improve safety.
In fact, the governor’s proposal increases taxes and fees paid by drivers by
$250 million to pay for public transit.
All transportation taxes and fees paid by drivers should be used for highway
purposes only, while alternative travel modes should be funded by their own
users (which reduces the public subsidy) or through local options that apply
to the general public, like sales taxes.
WPC's Recommendations on the State's 2012
Transportation Tax Package, Part II
Part II: Do Not Create a State-level Tax or Fee to Fund
Local Transit Agencies
Public transportation is not underfunded in
Public transit is a local function with its own tax base and the state’s
role should be limited to granting local tax authority, not creating a
new state-level funding source.
A common myth among public transit agencies and the transit lobby is
that they are underfunded and need state money to further subsidize
Public transit is not underfunded in Washington state.
In fact, the final report of a 2011 state study, “Indentifying the State
Role in Public Transportation,” concluded that in public transportation
funding “there is no common definition of ‘unmet need’ and there is no
one source of information. Many observations are anecdotal and often do
not have a strong data or rationale basis supporting the unmet need
There are 31 public transit agencies in Washington and they collected
$2.05 billion in total revenues in 2010. To put this in perspective, in
2010 the state collected about the same amount ($2.09 billion) from the
three major revenue categories (taxes, fees and miscellaneous) that fund
the state’s entire transportation budget.
Collecting more than $2 billion in a year is remarkable considering how
small public transit is compared to the state’s overall transportation
system. In 2010, the 31 public transit agencies provided 212 million
passenger trips, or about 582,000 trips per day. The federal government
estimates that households typically perform an average of 9.5 person
trips per day. Washington state has 2.51 million households, which
translates to an estimated 24 million person trips per day across the
state. This means the 31 public transit agencies’ total market share is
only about 2.4% of all daily person trip demand.
The primary funding source for the 31 transit agencies is a local option
sales tax. Washington state’s primary transportation funding source is
the motor vehicle fuel tax (gas tax). The following chart compares the
annual sales tax revenue for public transit agencies to the state’s
motor vehicle fuel tax collections between 2005 and 2010.
In 2010, the 31 public transit agencies collected $1.23 billion in sales
taxes. The state collected about $1.21 billion in gas taxes in 2010.
This means public transit agencies actually collected more in sales tax
revenue than the entire state collected in gas tax revenue.
Among public transit agencies, the cumulative sales tax revenue since
2005 was $6.46 billion, while the state’s cumulative gas tax revenue was
$6.60 billion over the same time period. Again, this is incredible when
you consider how few people actually use public transit compared to the
overall transportation system.
Transit officials also claim sales tax revenue is volatile and
unreliable as a consistent funding source, but public transit’s sales
tax revenue has grown 150% in the last ten years, from $484 million in
2001 to $1.23 billion in 2010. Inflation over the same time period only
accounts for 23% of this growth. This means sales tax revenue for public
transit agencies in Washington state has grown about 6.5 times faster
than inflation over the last decade.
There also seems to be a misconception that transit ridership continues
to rise. In reality, total ridership across the state has been steadily
falling since 2008.
In 2008, transit’s annual ridership was about 222 million passenger
trips. Since then however, transit demand has fallen. Through 2010,
public transit’s ridership declined to about 212 million passenger
trips, a drop of 4.5%. But transit’s operating expenses have gone the
In 2008, total statewide transit operating expenses were about $1.01
billion. By 2010, transit’s operating expenses had risen by $53 million,
an increase of about 5%. So public transit officials are serving fewer
people but spending more to do it.
In another measure, public transit agencies have also accumulated very
large reserve funds. In 2010, the 31 public transit agencies stored
$1.81 billion in reserves, which is twice as much as they had in 2007
($915 million). In fact, Unrestricted Cash and Investments ballooned
560% from $171 million in 2007 to $1.13 billion in 2010.
A transportation funding package in 2012 should not include a dedicated,
state-level funding source for public transit. Transit agencies are not
underfunded and they have their own tax authority. Furthermore, transit
officials should learn to become more efficient before asking taxpayers
for more money. The state already cannot keep pace with funding its
current transportation infrastructure needs; infrastructure needs that
serve the majority of daily person-trip demand. Any new transportation
revenue source at the state level should be used to pay for existing
obligations or to expand highway capacity; it should not be diverted to
new commitments, such as public transit.
WPC's Recommendations on the State's 2012 Transportation Tax Package, Part
Part III: Stop Diverting Existing
Transportation Taxes and Fees for Non-highway Purposes
Lawmakers diverted $204 million in transportation taxes and fees last
Before asking voters for higher taxes and fees, lawmakers should reform
policies that divert current transportation revenues and fees to
Most officials claim the state’s transportation system is underfunded
and that current revenues cannot keep pace with simply preserving the
system we have. In 2010, the major transportation funding sources
(taxes, licenses, permits, fees, & tolls) brought in $2.09 billion in
state transportation funding. Most of this revenue was paid by drivers
and it should have gone to support the growing backlog of highway
infrastructure needs. Yet, through various policies created by the
legislature, state officials shifted more than $200 million to
non-highway purposes last year alone.
$28.14 million to Indian tribes
Tribally owned gas stations are exempt from paying 75% of state gas
taxes. Under the state agreements, tribal stations impose the full
state gas tax rate of 37.5 cents per gallon, and then receive an
annual refund of 28 cents per gallon sold. The amount of gas taxes
refunded to tribes was about $28.14 million in 2010, and tribal
leaders have spent some of the gas tax refunds on non-highway
$114 million to the Multimodal Account
State lawmakers also shift transportation taxes and fees paid by
drivers into the state’s Multimodal Account. As the name implies, the
Multimodal Account is spent on transit, bicycle, and sidewalk
improvements, generally through grant programs. One of the largest
recipients of funds from this account is Amtrak. Most of the revenue
that funds the Multimodal Account is paid by drivers in the form of a
retail sales tax on the sale of motor vehicles and motor vehicle
license fees. In 2010, drivers paid about $114 million into the
state’s Multimodal Account.
$62 million to the general government programs
Washington State Department of Transportation (WSDOT) officials are
required to pay state sales taxes on state transportation projects.
This means valuable transportation revenue (paid by drivers) is
funneled out of the transportation budget and into the state’s general
fund, and then used to pay for non-highway projects like social
services, education and general government. WSDOT officials estimate
that project delivery costs could be reduced up to 8.5% if their
projects were exempt from state sales taxes. The Office of Financial
Management estimates WSDOT paid $62 million in state sales taxes in
2010 on its capital construction projects.
Each year, drivers pay about $204 million in various transportation
taxes and fees that state officials then divert and spend on non-highway
purposes. Annually, this amount is equivalent to about seven cents per
gallon in the state gas tax rate.
These other projects may be important, but
they should have their own funding sources,
particularly paid by the user group who benefits
from the program or service. Drivers have their own
infrastructure needs that are not currently being met. Lawmakers should
stop diverting current revenues to subsidize other, non-highway purposes
and use the money they already have, before asking drivers to pay more.
WPC's Recommendations on the State's 2012
Transportation Tax Package, Part IV
Part IV: Expand Capacity, Fix Chokepoints and Do Not
Restrict New Resources to Just Maintaining the Existing System
In 2003 and 2005, lawmakers passed two gas tax increases to fund more
than 400 road projects across the state. Each proposal was tied to
specific projects and taxpayers knew exactly what they were supposed to
get. This time around however, lawmakers have only identified broad
funding categories, with the stated intent of using the new revenue to
preserve the existing system. This means drivers would have to pay
higher transportation taxes and fees without receiving any new road
If lawmakers are going to raise taxes and fees on drivers and spend
political capital to pass a transportation funding package, they should
identify specific projects that fix chokepoints, expand capacity and
ultimately reduce traffic congestion.
The chart following compares the number of highway lanes, person delay
and highway-vehicle miles traveled in the Seattle region between 1982
In 1982, drivers traveled about 14.6 million miles per day on highways
in the Seattle region. By 2010, the amount of driving doubled to about
29.9 million miles per day on highways in the Seattle region. Yet while
the amount of travel demand on the regional highway system has doubled
in the last 30 years, the amount of freeway capacity has not.
The Seattle region had 1,345 miles of freeway lanes in 1982. In 2010,
the region had 1,874 miles. This means that since 1982, regional highway
demand increased by 106% while the supply of regional highway lanes only
increased by 39% over the same time period. As the demand for highway
travel grows faster than the supply of highway lanes, drivers experience
increased traffic congestion.
Across the Seattle region, total hours of delay are six times higher
today, rising from 11.9 million hours in 1982 to 87.9 million hours in
Transportation leaders rely on drivers to fund most of the state’s
transportation budget and all of the state’s highway system. In fact,
drivers are now being forced to subsidize local transit agencies across
Washington, despite a growing list of unmet road and bridge
But with anti-car policies that mandate reduced driving targets,
increased driving taxes and fees and replacing valuable auto lanes with
transit and bicycle-only restrictions, drivers are paying more and
The plan to replace the SR-520 floating bridge does not add any new
general purpose lanes to the already-congested configuration that exists
today. The deep bore tunnel that will replace the Alaskan Way Viaduct
actually reduces the number of existing automobile lanes from six to
four, which guarantees more traffic snarls in Seattle and on Interstate
5. Sound Transit officials also plan to remove the reversible center
lanes of the Lake Washington I-90 floating bridge, which a Washington
State Department of Transportation study shows will increase traffic
This means officials plan to reduce the supply of unrestricted highway
lanes around Seattle in the next 20 years despite population estimates
that show an increase of more than one million new residents.
If drivers are going to pay more in higher transportation taxes and
fees, it should be in exchange for projects that not only maintain the
current system, but that also reduce traffic congestion.
Michael Ennis is director of the Center for Transportation at Washington
Policy Center, a non-partisan independent policy research organization in
Washington state. Nothing here should be construed as an attempt to aid or
hinder the passage of any legislation before any legislative body. For more
information, visit washingtonpolicy.org .
Part V: Reduce unnatural cost drivers that make transportation projects more