Serving Franklin County, WA

Democrats being dishonest about gasoline tax increase

With so much rhetoric about moving the state away from gas-powered vehicles to reduce CO2 emissions, one of the strangest claims made during the legislative session was that there was no increase in "gas taxes."

Various versions of this claim appeared.At best, it is misleading, but in many cases it is false.

The transportation package specifically relies on an increase in taxes on gasoline as legislative documents and the Department of Ecology admit.

The $17 billion transportation package has several funding sources. The legislative analysis shows the largest is funding from the "Climate Commitment Act," the state's new CO2 cap-and-trade program passed last year (Senate Bill 5126).

Senator Liias, chairman of the Senate Transportation Committee, even admits this is the case. On Feb. 10, he tweeted the transportation budget is funded from "the bill we passed last year" – SB 5126.

This isn't an accident. Funding from Senate Bill 5126 was specifically put into the Carbon Emissions Reduction Account, which was dedicated to a future transportation package.

Sure enough, the transportation package specifically cites funding from the Carbon Emissions Reduction Account.

Where does the money for the Carbon Emissions Reduction Account come from? It comes from a tax on CO2 permits sold by the state. As the Department of Ecology explains, transportation (gasoline and on-road diesel) is the largest category of CO2 emissions in the state. The fiscal note for SB 5126 shows that transportation fuels account for nearly 47% of emissions from covered entities.

Put simply, the tax on gasoline in SB 5126 was raised for the specific purpose of funding this transportation package.

The fiscal note estimates the lowest price for those CO2 permits will be $20.60 per metric ton (MT) of CO2. Each gallon of gas emits 19.4 pounds of CO2 when combusted, which translates to 18.3 cents per gallon at $20.60 per MT.

This is confirmed by the California Legislative Analyst's Office, where they already have the cap-and-trade system Washington will implement next year. In 2016, they wrote, "We assume that retail gasoline prices increase by 8 cents to 9 cents per gallon and diesel prices increase by about 10 cents per gallon for every $10 per metric ton of carbon dioxide equivalent that an allowance costs." Washington's price is projected to start at just over $20.

Legislators know the tax on CO2 increases prices. Indeed, they want to increase prices on gasoline to encourage people to switch to electric vehicles. In other words, raising the price of gasoline isn't a bug, it is a feature. To deal with those increases, SB 5126 specifically authorizes money to offset the increased cost of gasoline and other energy, including programs to "reduce the energy burden of people with lower incomes, as well as the higher transportation fuel burden of rural residents..."

How, then, can legislators like Liias repeatedly say there is no "gas tax" increase? He and others repeating this message rely on a technicality. A "gas tax" refers to a specific type of tax directly on gasoline that goes into a dedicated account for roads. That narrow definition makes the claim there is no "gas tax" increase technically accurate. It is, however, intentionally misleading.

Liias is clearly attempting to use confusion about the definition of a "gas tax" to mislead people. There is no difference between an 18-cent-per-gallon gas tax and an 18-cent-per-gallon tax on gasoline.

The insinuation the transportation package was funded without increasing taxes on gasoline is dishonest and, starting next year, state drivers will pay the price.

– Todd Myers is the director for the Washington Policy Center's Center for the Environment. Email him at [email protected].


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