Washington’s gas tax set to increase by 6 centsSubscriber Exclusive

Clark County motorists will pay more at the pump now that Gov. Bob Ferguson has signed into law a 6-cent-per-gallon gas tax increase.

Lawmakers passed the transportation budget and accompanying gas tax in the waning days of the legislative session, which ended April 27. The increase is set to begin July 1 amid the usual seasonal rise in fuel prices.

“Our gas tax revenue is not what it was,” Ferguson said during a press conference Tuesday.

The governor pointed to infrastructure challenges and Washington residents’ expectation that the state will invest in projects to fix them. The gas tax increase was a bipartisan solution, he added.

“We have limited revenue options right now,” he said. “The gas tax, unfortunately, is one of them.”

The tax is concerning for locals who have seen their gas bills rise over the years.

“It’s been horrible,” said David Williams, a Vancouver resident and owner of Aspen Limo Tours. Williams’ gas bill has nearly doubled since 2020.

Gas prices traditionally escalate heading into summer. Refiners’ summer gas blends, designed to reduce emissions, are costlier. And demand increases as vacationers hit the road.

This summer, however, drivers will be paying a bit less than last year. Lower crude oil prices may be the reason, according to travel company AAA.

Last year, Vancouver drivers were paying about $4.60 per gallon for regular gas. Currently, they’re paying $4.26, according to AAA.

Prices are still higher than they have been in recent years. Washington drivers paid on average $3.51 per gallon in May 2019, according to the U.S. Energy Information Administration.

Prices dropped during the early days of the pandemic but then began to rise again, peaking in the summer of 2022.

Williams doesn’t pass fuel prices on to customers, something he’s passionate about avoiding.

But the volatile local economy has severely impacted him. The usual demand for prom-season limos wasn’t there last year and only slightly recovered this year.

He’s also had to lower his prices to stay competitive with the rise of unregulated tour bus companies operating in the Portland metro area.

Williams said he’s bracing for the increase in taxes.

“They’re going to kill our local economy,” he said. “We are already suffering.”

Washington has the third-highest gas tax in the country, behind only California and Pennsylvania, according to the energy information administration.

Williams’ business and others in Clark County are also being hit by increasing business and occupation taxes and shifting retail sales taxes, both also signed by the governor Tuesday.

Ferguson said he understands that the budget he signed this week will be a challenging one for Washingtonians.

Rep. Sharon Wylie, D-Vancouver, cited her experience working on previous transportation budgets during a House floor debate about increasing the gas tax.

“I’ve discovered that the gas taxes are probably less related to the price at the pump than most people realize,” she said during the April 24 session.

“It’s also part of my job to sometimes do things that are maybe not popular when the good of the state requires us raising it this much,” Wylie said.

The state forecast a multibillion-dollar budget shortfall going into this year’s legislative session.

The transportation budget passed by the Legislature will not only raise the gas tax 6 cents this year but also increase it by 2 percent annually after that, adjusting for inflation.

Wylie said this will save drivers from being hit with a big increase in the future.

“It’s more predictable, and it helps fund our transportation system,” she said.

Williams said his company is in a tough spot with the gas tax, unable to increase prices to stay competitive and unable to spend less on overhead.

“We’re stressed out about that right now,” he said.