Supreme Court Allows Suit over State/Tribe Gas Tax Deal to Proceed

The Washington State Supreme Court recently ruled in favor of AGCs position on an issue involving the siphoning of state highway funds for non-transportation purposes.

AGC filed an amicus brief in support of Automotive United Trades Organization (AUTO) an organization of gas station operators that filed suit over the states gas tax agreement with Native American Tribes. Under that agreement the state provides payments (essentially a rebate) to the Tribes of 28 cents of the state gas tax for each gallon of gas sold at tribal stations.

The Supreme Courts 5-4 decision is not the final word on the matter; it allows the AUTO lawsuit to proceed in the trial court which will now consider the merits of the case.

Hopefully this will ultimately result in much more transparency regarding the negotiation of and the nature of tribal compacts in general and even more importantly force clear accountability and enforcement with regards to the expenditure of 18th Amendment protected gas tax revenues said AGCs Legislative Counsel Van Collins.

In 2007 the Governor authorized to do so by legislation entered into agreements with Native American Tribes providing payments to the tribes of 75 percent of the state tax rate or approximately 28 cents per gallon for every gallon sold out of a tribal station. Since 2007 those payments to the tribes out of the Motor Vehicle Fund (MVF) have exceeded $70 million.

AUTO filed suit with members of the group are concerned that Tribes may be using the gas tax “rebate” to reduce the price of gas at Tribal stations undercutting other operators.

AGC’s concern is the potential loss of millions of dollars in infrastructure funding – and the amount of the loss could grow considerably in the future should Tribal gas station operations continue to expand.

“If the Tribes were putting the money into roads and highways that would be one thing” says Collins who authored the amicus brief. “But there’s great concern that is not happening. The compact between the Tribes and the Governor precluded any real transparency. There are no independent audits conducted regarding the use of the funds and even the minimal reports that the Tribes are supposed to provide to the Department of Licensing are not always forthcoming.”

AGC is concerned not just because of the loss of transportation-related dollars in an era of already diminishing transportation dollars but also because of the distrust the lack of transparency creates.

“Clearly the State Constitution says the gas tax revenues are to be used for transportation purposes and people expect that” says Collins. “Future efforts to increase transportation revenues could be thwarted if the general public loses confidence that the taxes are being spent as promised.”

AGC is not a party to the lawsuit but the amicus motion and brief it filed requested that the State Supreme Court accept direct review of AUTO’s appeal. Collins filed the motion and brief on behalf of AGC of Washington as well as fellow AGC chapters Inland Northwest and Oregon-Columbia and the local chapters of MCA NUCA ACEC ABC WAPA NECA and WACA. Other business groups have filed their own amicus motions and briefs including NFIB the Association for Washington Business Washington Oil Marketers Association and the Washington Policy Center.

For more information contact Van Collins 360-352-5000.