Washington state Number Two in the nation for gas tax

The Tax Foundation is out with its annual rankings for state gas taxes (see map below), and Washington ranks second in the nation at 49.4 cents per gallon (numbers don't include the federal gas tax of 18.4 cents per gallon). But before you start wringing your hands, consider the Foundation's take on this particular form of taxation:

While usually not adored by taxpayers, gas taxes do conform relatively well with the public finance concept known as the “benefit principle,” meaning that as a general rule, the gas tax revenue accumulated from drivers goes toward the provision of government services that benefit drivers: the construction, maintenance, and repair of roads. This connecting of road costs with the people who use the roads encourages efficient use, minimizing traffic and wear on the road bed.

In fiscal year 2013, however, gas taxes, tolls, and motor vehicle license fees covered just 41.4 percent of state and local road spending. That percentage is falling over time as state gas tax rates in many states are not indexed for inflation, so the revenue they accumulate has weaker purchasing power each year. Of course, cars are also becoming more fuel-efficient all the time, and that makes for less gas tax collections each year as well.

One unintended consequence of lower fuel tax revenue is that legislators are occasionally tempted to seek road funding from more growth-damaging taxes like income and sales taxes, whose payers may or may not be heavy users of roads.

You can read our July 2015 report on Washington's most recent transportation funding package here.

Washington Research Council Tax Foundation Washington state gas tax rank

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