Washington drivers could see the first increase in the state gas tax since 2016 under a bipartisan transportation funding plan unveiled Monday, according to state senators.
The proposal includes a 6-cent per gallon gas tax increase starting in fiscal year 2026. That would raise the state portion of the gas tax to 55.4 cents per gallon — not including the federal tax of 18.4 cents. After that, the tax would automatically go up by 2% each year to keep pace with inflation.
Senate lawmakers say the plan would bring in $1.5 billion over the next six years and help address a projected $1 billion budget shortfall over the next two years. Without new funding sources, that gap could grow to $8 billion by the end of the decade, lawmakers warn.
The proposal is part of a broader effort to fund a $16.2 billion transportation budget for the 2025-2027 biennium. In addition to the gas tax increase, senators outlined several new revenue options.
Those include:
- A 0.3% transfer of state sales tax revenue from the operating budget to transportation, expected to bring in $800 million annually beginning in the 2027-2029 budget.
- Increased fees for electric vehicle registrations.
- A new tax on luxury vehicles priced over $100,000.
- Higher taxes on rental cars.
- A $10 added fee on traffic tickets.
Even with these changes, the proposed plan still includes 13 furlough days for state transportation employees during fiscal year 2026. Workers with the Washington State Patrol, ferry crews and terminal staff, highway incident responders, and a few others would be exempt. The proposed furloughs align with similar measures included in the Senate’s separate operating budget.
The transportation budget proposal is scheduled for a public hearing in the Senate Transportation Committee on Tuesday, with a vote planned for Thursday. The House is expected to release its version of the transportation budget Monday evening. Both chambers will negotiate final details over the coming weeks before the legislative session ends April 27.
The current two-year transportation budget is $14.6 billion and funds a mix of road maintenance, ferry operations, bike and pedestrian projects, and other infrastructure efforts. The new proposal includes $6.2 billion in operating expenses and $10 billion in capital projects.
Behind the need for new revenue are rising construction costs and declining gas tax revenue — a combination that has been straining the state’s ability to complete ongoing transportation projects. Lawmakers say some projects could be left unfinished without new funding sources.
Last year, then-Gov. Jay Inslee proposed a $14.7 billion transportation budget for 2025-2027 that did not include any new taxes. His plan set aside $900 million for fish passage barrier removal and $794 million for state ferry system improvements.
Since then, the outlook has improved slightly. A March revenue forecast showed projected transportation revenues rising by about $113 million compared to a November forecast. Total revenue for the next two-year cycle is now expected to be about $7.1 billion — not including federal funds or carbon auction proceeds earmarked for transportation.
Fuel tax revenues still make up the backbone of the transportation budget, but gas consumption has been declining since it peaked in 2018. Lawmakers attribute that trend to more fuel-efficient cars and a growing number of electric vehicles. However, the latest forecast suggests gas usage isn’t falling quite as fast as previously expected, providing a modest boost in projected revenues.
While some Democratic lawmakers have floated the idea of implementing a road usage charge — where drivers pay per mile — that concept was not included in the Senate’s current proposal. The chair of the House Transportation Committee has suggested a charge of 2.6 cents per mile, but such a system would take time to launch. Republican lawmakers have consistently opposed the mileage-based charge.
Sen. Marko Liias, D-Edmonds, chair of the Senate Transportation Committee, has emphasized the need for bipartisan cooperation on any new transportation revenue. Monday’s proposal reflects that aim, combining new taxes and fees with structural budget changes to avoid deeper cuts or delays to vital projects.
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