Washington enacted a $17 billion, 16-year transportation revenue package last year, and this year the Legislature adopted a $13.616 billion transportation budget for 2023–25. Adjusted for inflation, 2023–25 appropriations are 18.8% higher than appropriations in 2021–23.

Transportation budgets are mainly funded by state sources. State funds include forecasted revenues from transportation-related sources and money raised as part of periodic long-term revenue packages. Revenue packages often include bonding, and the most recent revenue package includes proceeds from the carbon emission allowance auctions.

Forecasted transportation revenues are estimated to be $6.996 billion in 2023–25. For the period through 2027–29, transportation revenues are now estimated to be $62.7 million (0.2%) higher than assumed in the 2023–25 budget. Adjusted for inflation, forecasted transportation revenues are expected to decline going forward and are not expected to regain pre-pandemic highs. This is because revenues from the gross fuel tax—the largest component of the forecast—are expected to decline substantially in inflation-adjusted terms.

Over the long run, there are transportation budget funding challenges on both sides of the ledger. The current budget significantly increases appropriations for new projects, but more funding could be needed to complete them as the cost of construction is rising. At the same time, inflation erodes the real value of the fuel tax, which will also bring in less revenue as fuel economy increases and more drivers switch to electric vehicles.

Read the report here.