Proposal would slowly shift tax on vehicle purchases away from operating budget

OLYMPIA… Sen. John Braun is proposing to add a major new funding source for transportation needs across Washington without imposing a new tax. The Senate Republican budget leader plans to file legislation that would begin shifting the state sales-tax revenue from vehicle purchases into the transportation budget, instead of continuing to spend it on day-to-day government operations.

“Relying on gas-tax revenue and car tabs as the main sources of revenue for transportation needs is financially unreliable and politically difficult,” said Braun, R-Centralia. “The Legislature would be wise to start cultivating an additional source of transportation revenue, and the sales tax on vehicles is a logical candidate.

“This approach also has a progressive quality to it, because people who spend more on a vehicle will pay more tax – and that’s more equitable than car-tab costs that can fluctuate by hundreds of dollars based on nothing more than your address.”

Braun’s proposal would move the state portion of vehicle sales-tax revenue into a new fund, by 10 percent per year starting in 2020. The shift would be complete in 10 years, giving ample time for those writing the transportation and operating budgets to adjust, he explained.

It’s estimated the approach would provide more than $30 billion for transportation investments over the next 20 years. That’s approximately double the value of the “Connecting Washington” package of projects and revenue approved by lawmakers in 2015.

“Between long-term economic projections and substantial savings coming next decade from paying off the state’s long-term pension liability, there should be more than enough revenue to keep up with the phasing-in of this legislation and allow an orderly transition that protects the operating budget,” Braun said.

The idea has received a favorable response from the Republican leader on the Senate Transportation Committee.

“We know the current gas tax won’t support the transportation investments our state needs. Adding this existing sales-tax revenue as a funding source would allow us to maintain and increase new transportation investments,” said Sen. Curtis King, R-Yakima. “This approach could help the Legislature honor the voters’ desire for affordable car tabs while addressing funding concerns resulting from the passage of Initiative 976.”