State's gas tax jumps a nickel; vehicle sales surtax in effect

By DAVID AMMONS
THE ASSOCIATED PRESS
Seattle Post-Intelligencer

7/1/03

OLYMPIA, WA-- Washington's gas tax increases a nickel a gallon today -- the first increase in more than a decade -- pumping money into a 10-year, $4.2 billion plan to improve the state's congested highway system.

Also taking effect today: other recently passed legislation, as well as the austere new state operating budget and an ambitious construction program.

Gov. Gary Locke and the Legislature patched together a new $23 billion, two-year state budget without raising general taxes. But they concluded that the separate transportation budget was at crisis point and needed new revenue, despite the lingering recession and voters' emphatic rejection last fall of a 9-cents-a-gallon gas tax increase.

In the end, they promoted a multibillion-dollar highway plan as a way to help the economy -- in the near term by generating thousands of construction jobs and in the longer term by fixing an impediment to growth.

The solution, eventually embraced by lawmakers from both parties, Boeing and other business giants, labor and community leaders, was to boost transportation taxes.

The taxes:

Gas Tax: Motorists will pay an extra nickel per gallon, up from 23 cents. At 28 cents per gallon, Washington's gas tax will be the eighth highest in the nation. Increases are pending in some other states.

Oregon is at 27 cents and Idaho at 25 cents. Washington's last increase, also a nickel, was approved by the 1990 Legislature and implemented over two years.

The state estimates that the newest tax will cost an average driver an added $27 a year. Motorists also pay a federal tax of 18.4 cents a gallon.

Sales Tax: The state also will charge a surtax of 0.3 percent on sales of new and used vehicles. For a $20,000 car, that will be $60.

On Aug. 1, a third tax increase will take effect: a 15 percent increase in trucking fees for commercial rigs.

In signing the revenue package, Locke said the new transportation projects will ease traffic congestion, boost the economy and make the state more attractive to The Boeing Co. as it considers where to assemble its proposed new 7E7 Dreamliner jet.

The 10-year package includes $3.4 billion for highways, $605 million for public transportation and $100 million for four new auto ferries and work on existing vessels and terminals.

The gas tax can be used only for roads and ferries. The extra nickel is projected to bring in more than $1.7 billion over 10 years.

The sales tax increase, which will pay for public transportation projects, is expected to generate $350 million.