Washington State Ferries Could Live, Die By Excise Tax

The state Transportation Commission will brief the Senate and House transportation committees today on its recently released 20-year plan — “Washington Transportation Plan 2030.”
The plan proposes to resurrect a statewide license-tab tax to fund the ferries’ long-term capital needs, like new boats. Whoa, you say. Isn’t that the hated motor vehicle excise tax that voters got rid of by passing I-695 in 1999? Why yes, but the state was collecting 2.2 percent of a vehicle’s value then, which usually added up to hundreds of dollars per car.
The plan says Washington State Ferries needs about $200 million a year for capital, $4.2 billion over the next 20 years. A vehicle excise tax rate of about 0.21 percent should take care of that. It would equate to $42 for a $20,000 car and keep the Department of Transportation from having to shift money from highways.
Seems fairly painless. Closing the operating gap is another matter, however, and would fall entirely on ferry riders, according to the plan.
The Legislature, governor and Washington State Ferries agree there should be a 2.5 percent annual fare increase to cover inflation. The commission’s plan says that’s not enough. To prevent having to subsidize operations, there would need to be a 4 percent to 6 percent fare increase for at least five years. Fares already jumped nearly 90 percent over the past decade, costing the system 4 million riders a year.
WSF would continue to receive about $45 million per year of gas tax, and $7.5 million a year from motor vehicle licensing for operations. The rest would all have to come from fares. Fares are now paying for about 70 percent of operations.
So, the Legislature needs to submit a bill for a tax increase, which it’s been loathe to do for the past 10 years. It would take a two-thirds majority of both the House and Senate to pass it. Or they could send it to the voters who would have to approve it by a simple majority.
Washington State Ferries needs to keep cutting expenses, but it can’t close the gap through savings alone. I’ll come right out and say it. It needs a tax increase, whether alone or part of a bigger transportation package. I’ve got to believe lawmakers will a package on the ballot in November. If it’s reasonable and is rejected out of anti-tax spite, then you get what you pay for.

One thought on “Washington State Ferries Could Live, Die By Excise Tax

  1. Mr. Friedrich: Thank you for a very succinct and factual description of the challenges facing the ferry system and potential solutions.

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