From February 2018 through January 2019, Washington state tested out a possible replacement program for the gas tax known as the “Road Usage Charge” (RUC). The test simulated how an RUC would perform for participant drivers by comparing savings or additional costs of the RUC to the gas tax. About 2,000 participants chose to opt into the pilot program, which was administered by the Washington State Transportation Commission (WSTC).

A report on the test program was released earlier this month, highlighting how the program was structured and various findings, such as lessons learned, legal considerations, and equity and operational issues. Now the WSTC is planning to issue final recommendations today at its December 17th meeting. Those recommendations, however, could perpetuate Washington’s deeply unbalanced transportation priorities, which lavish attention on cars while transit, walking, rolling, and biking get minimal attention.

Roads-only recommendation is recipe for climate delay

In October, 15 preliminary recommendations were issued by the WSTC on implementing a road usage charge. These range from privacy protection to developing transition scenarios. But one recommendation that would greatly restrict how RUC revenue can be spent has caught the ire of climate action and multimodal transportation advocates. (Update: The recommendation was retained in the final vote on the recommendations, but Commissioner Hester Serebrin did attempt to eliminate it.)

The WSTC's preliminary recommendations on implementing an RUC. R15 is the recommendation that restricts road usage charge revenue to highway purposes. (WSTC)
The WSTC’s preliminary recommendations on implementing an RUC. R15 is the recommendation that restricts road usage charge revenue to highway purposes. (WSTC)

That last recommendation would apply the principles of the 18th Amendment of the Washington State Constitution to revenues derived from the RUC. The amendment deals with how gas tax revenues may be spent, and though arguably misapplied, it says that these revenues must be used for “highway purposes.” The term itself is broadly and vaguely defined in the constitution.

In recent decades, state legislators have been unwilling to test the bounds of what constitutes “highway purposes” by allocating funding toward transit service, many multimodal investments, and construction of urban rail. Who’s to say those are not highway purposes?

While there is general consensus that the Washington Supreme Court would be deferential in accepting an argument that virtually any expenditure of gas tax revenue for varied transportation investments is acceptable, it seems unlikely that state legislators will test the waters anytime soon, especially with suburban and rural legislators’ eyes set on building highway projects in their districts and handwringing over I-976 uncertainty.

Restricting use of revenues would be a mistake, RUC could offer equitable options

Washington’s obsession to fund highways over all other modes and funding sources to cross-subsidize it. (WSTC)

Tying RUC revenues to a constitutional amendment understood–whether wrongly or rightly–as only benefiting car infrastructure would be a historic mistake. This is why a coalition of advocates, such as Sierra Club, Futurewise, Transportation Choices Coalition, and Washington Environmental Council, are urging the WSTC to reconsider this recommendation. According to their letter, they are asking the WSTC to “not restrict revenue to ‘highway purposes'” and “[s]et a progressive rate structure and ensure implementation considers the needs of communities that have been marginalized.” They also note that the “RUC must be implemented strategically and ensure it accounts for broader environmental and other impacts.”

On the first charge, they make several salient points:

A RUC presents an opportunity to help fund our transportation system in a more financially sustainable way. Multimodal investments present benefits to the overall population and to the environment in terms of increased safety, reduced air pollution, and mitigated stormwater runoff. While road usage by passenger vehicles necessitates the need for ongoing road maintenance, funding that helps mode shifts to transit, walking or biking benefits our roadways overall by way of less wear and tear and reduced congestion, leading to fewer maintenance needs and fewer demands for costly road expansions.Restricting RUC revenues to the motor vehicle account ignores the interconnectedness of our entire system.

That is not to say that revenue should not be used for highway purposes. Our existing roads must be safely maintained, and we have a legal mandate to fix culverts. If adopted, a RUC must provide revenue for preservation, while also contributing to other multimodal transportation needs. We strongly disagree with WSTC’s current suggestion to restrict RUC revenues to highway-related expenditures, andwe urge the Commission to rethink this recommendation.

The coalition of advocates also see the RUC as a way to become more progressive than a gas tax. “The gas tax, in addition to being a declining source of revenue absent continuous rate increases, is also a regressive revenue source since those with lower incomes are likely to pay a higher percentage of their income,” they state. “A RUC, if structured equitably with a progressive rate structure, presents the opportunity to remedy both of these issues.”

Why a road usage charge

Washington is pursuing an RUC because the gas tax is unable to keep up with increased fuel efficiency of newer vehicles and widespread adoption of electric vehicles. As vehicles become more efficient, the gas tax must be increased to hold revenues at their intended levels since systemwide the average number of miles a car can go on a gallon increases.

Raising the gas tax, however, does put more tax pressure on owners of older vehicles since their mileage per gallon does not improve, leading to an effective tax increase on a per-gallon and per-mile basis. This is arguably an inequitable impact to many lower-income car owners even though it is a partially Pigouvian tax and market signal to operate more efficient vehicles, which is a social and environmental positive.

Guiding principles for the RUC program. (WSTC)
Guiding principles for the RUC program. (WSTC)

There are two other major problems with the gas tax. One is that it does not reach car owners who operate electric vehicles. To partially remedy this, the state now charges an annual vehicle registration fee specifically on electric vehicle owners to pay for transportation investments. The other major problem is that the gas tax does not increase with inflation. As a result, the flat gas tax loses its purchasing power every year until it is unilaterally raised through new legislation.

Under the RUC simulation by the WSTC, participant drivers received invoices showing whether or not the RUC saved or costed more than the gas tax for the mileage driven. This was tailored to the type of vehicle a driver used. The RUC’s baseline charge was 2.4 cents per mile, which if comparing to the gas tax would break even at 20.6 miles for drivers who get average gas mileage at that level. For reference, Washington’s gas tax is currently 49.4 cents per gallon.

How the per-mile RUC rate was set and the declining value of the gas tax. (WSTC)

Participants were offered several different means to report their mileage. These included manual and digital options, such as plug-ing GPS devices, odometer readings at vehicle licensing offices, and smartphone app. All of these come with their own tradeoffs to the user in how much work it is to report mileage, level of privacy, and whether or not mileage can be excluded from out-of-state travel. For the state, there is a variety of tradeoffs in implementation for each reporting option tested, which the report digs into.

The types of options offered in the RUC test program. (WSTC)
The types of options offered in the RUC test program. (WSTC)

Will an RUC replace the gas tax? Time will tell if that is the solution Washington ultimately chooses. But for now, early policy direction is in the hands of the WSTC. And while the WSTC’s meeting on recommendations is happening today, you can still send your feedback on the program and final recommendations.

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Stephen is an urban planner with a passion for promoting sustainable, livable, and diverse cities. He advocates for smart policies, regulations, and implementation programs that enhance urban environments by committing to quality design, accommodating growth, providing a diversity of housing choices, and adequately providing public services. Stephen primarily writes about land use and transportation issues.

13 COMMENTS

  1. Some how the idea that usage fees for roads should only pay for maintenance of those roads, and nothing else, misses the point.

    The land upon which roads are constructed is a public right-of-way, yet it has been consigned by default to one portion of the public, those who drive private automobiles. Other users of these right-of-ways get at best some token space along the side of the road. And to facilitate road use by automobiles, drivers also receive free or heavily subsidized use for parking (car storage) when their vehicles are not in use.

    In spite of the enormous social costs that drivers (I am one myself) impose on all members of the public (externalities such as pollution, atmospheric carbon dioxide, safety) their taking of this public right-of-way is heavily subsidized by general tax revenues.

    Shouldn’t automobile drivers also pay a rental fee to other possible users, and to the general public at large, for the private use of this public resource?

    • You suggest roads are “a public right-of-way…consigned by default to one portion of the public, those who drive private automobiles.” You are omitting all the non-auto uses of public roads–transit buses and freight trucks, to name a couple. Our everyday purchases get to the stores on trucks. It’s time to get beyond the “war on cars” mentality.

      • Freight trucks at least pay high commercial licensing fees, which are of course passed through in the prices of goods shipped. It’s the subsidy to private cars that I object to, but I’m not at war on cars, and I have to own several of them unfortunately (thanks to the teenagers in the house who would be loath to ride a bus or bicycle).

        Since it is easy with current technology to assess different vehicles accurately for their use of public roadways, why shouldn’t we? Otherwise, we are subsidizing them from general tax revenues.

  2. As housing costs increase in our urban job centers what are the equity implications for people who cannot afford to live close to work and who may have to drive longer distances to get to work?

    • I have observed that conservatives, who would be loath to assist those people to live near their jobs, by providing affordable public housing, suddenly become socialists when it comes to driving, willing to subsidize everyone through free public roadways and parking. They see free highways and parking as a libertarian issue rather than a free public good.

  3. I’m curious how they solve the very obvious border problems. When fully implemented, the gas tax disappears — so motorists from BC and Idaho can cross the border to fill up on tax-free gas, denying their state needed revenue.

    And how do we tax the truckers and other visitors who drive their out-of-state vehicles on our roads and highways? Motorists from states without a compatible RUC system can’t drive our state for free, can they?

    • Several state and provincial jurisdictions are looking at an RUC. So, I think they’ve considered that implication partially and there may be some coordination. Weight fees probably can cover most truckers if an RUC doesn’t manage to do it or does it better. Per the report though: “Time permits can serve two distinct markets: long-term time permits (for example, one year) primarily serve in-state residents and short-term time permits (for example, a few days or one week) primarily serve out-of-state visitors.” Section 9.3 dives into this more.

      • I read Section 9.3 and it raises more questions than it answers. My quick summary is that border problems remain a nightmare. Nothing in 9.3 would be easily implemented. Keep the gas tax but rebate it to in-state motorists taxed by RUC? Seriously? We have to save all our gas receipts to turn in for tax rebate?

  4. To me it seems like the most effective way to ensure RUCs don’t fund highway sprawl is to insist that charges for miles driven on a particular stretch of road (e.g. the Seattle portion of I-5) must be placed in a separate account and only go towards maintenance, safety, and capacity improvements for that stretch of road. And set the fee to be whatever it takes to cover the costs to maintain and keep safe that stretch of road.

    I’m not sure Seattle residents need RUCs as a funding mechanism for transit service, but we definitely should fight to make sure charges for miles traveled on I-5 make that stretch of freeway earthquake-safe before those funds go to anything else. And we should fight for funding mechanisms that say by default, car owners need to pay the full cost of the wear and tear their vehicle puts on the road, with an exception for people both low income and low wealth who get a subsidy. And if that means its more expensive to drive on a rural road than an urban road, well, that’s kind of the point. Low-income, low-wealth Seattleites shouldn’t subsidize miles driven by a high-income or high-wealth rural dweller simply because people in rural areas are lower income and lower wealth on average.

    • You have basically made the argument that roads taxes paid for by car drivers should not go towards bike lanes and road diets and painted lanes. Thanks

      • I didn’t intend to, but perhaps inadvertently I did. Some further thoughts related to my first comment:

        1. A bus lane surely counts as a capacity improvement to a road, if you measure capacity as number of people who move through the route, not number of vehicles. Probably in many cases so does a road diet. And a road diet almost certainly counts as a safety improvement. So a rule saying RUCs are limited to, among other things, “safety” and “capacity improvements” ought not preclude such funds being spent on bus lanes and road diets.

        2. A fee that sends a price signal for wear and tear on a road probably favors buses and carpools over single-occupant vehicles since the fee for that vehicle’s wear and tear is split among more travelers.

        3. A fee that sends a price signal for how much it costs per user of the road surely favors urban areas over rural areas, for the same reason it’s more expensive to provide internet service to less-dense areas. And density certainly seems to correlate with a political environment conducive to higher investments in walking, biking, and transit.

        4. Charging a fee to cars for the car-dedicated portion of the road doesn’t necessarily mean all of the public land which makes up “the road” is dedicated to cars. For example, construction and maintenance of the bike lane and sidewalk portion of the road could be funded with local property taxes (ideally on just the portion of the value attributed to land, since a nice walk/bike trip from one’s apartment to the local store probably makes the location more valuable).

        5. I would argue that on-street parking doesn’t count as “maintenance” or a “capacity improvement,” therefore applying my proposed rule to RUCs would require that on-street parking, if it exists, is funded by some other source (ideally rent paid by the vehicle owner for the parking spot).

        6. In my personal, entirely anecdotal experience, there’s a curious phenomenon where car infrastructure often stops being “necessary” once car owners actually receive a bill for what the infrastructure rightfully costs. Case in point: Broadway E, where (free) on-street parking was sacrosanct as part of the street’s redesign, but the market-rate parking in the Harvard Market is pretty much always empty. If we were concerned just about equity and social justice, the rational policy just give cash to poor people so they could park at places like the Harvard Market, and then either charge a market rate in general for parking on the street, or use the scarce space for something more sensible.

        • Beth, I like what you say about subsidies for parking in (6). You obviously have some economics background too. The design of the entire First Hill to Broadway streetcar route around the maintenance of a few sacrosanct parking spaces was insane.

          I am crazy about this forthcoming law review article (to be published in 2020) by Gregory Shill, a law professor at the University of Iowa. I’ve read it in its working paper form.

          Should Law Subsidize Driving?
          95 New York University Law Review __ (2020 Forthcoming)
          U Iowa Legal Studies Research Paper No. 2019-03

          https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3345366

          I hope the Urbanist will review it when its published.

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