Building an Economy that Works for Everyone

Washington’s Gas Tax in Historical Perspective

In 2005 the Washington state legislature approved an increase in gasoline and other transportation taxes to fund $8.5 billion in transportation improvements over the next 16 years. On July 1, 2005, the gas tax went up 3 cents per gallon to 31 cents. The tax is scheduled to rise in increments through 2008 to a total of 37.5 cents. Every region of the state is expected to benefit from seismic upgrades, safer travel, and better flow of produce and goods to and from ports.1  No one disputes that Washington’s transportation infrastructure is in crying need of repair and upgrading. However, some have questioned whether more taxes are really necessary, especially at a time of soaring gas prices. Opponents have launched an initiative campaign to overturn the increase.

The decision by Washington lawmakers to raise the gas tax appears politically risky following a decade when tax reduction initiatives seemed to dominate the polls. From a longer historical perspective, however, public investment in infrastructure has declined dramatically since the early 1970s. Even when the new tax is fully implemented in 2008, Washington’s gas tax will remain lower than the rates that prevailed in the 1950s and 1960s, when adjusted for inflation. In those earlier decades, both the state and the federal government invested large amounts in transportation and other basic infrastructure, setting the stage for broad-based economic growth. The question remains whether today’s voters, having grown accustomed to cheap gas and low tax rates, are willing to pay for the upgrades the state’s transportation system needs.

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