Report confirms the loss of transportation funds to compact

$30 million a year is being siphoned out of gas-tax funded transportation construction by a questionable compact that Washington State entered into with the Tribes in 2007 concludes a report by former Washington State Auditor Brian Sonntag.

In 2007 the Legislature passed a bill authorizing the Governor to enter into new fuel tax compacts with federally-recognized Tribes that operated fuel stations in Washington State. AGC and other groups are concerned that these compacts have allowed Tribes to undercut private fuel station operators give away needed revenue for roads harm taxpayers by allowing gas tax revenue to be spent on non-highway purposes and hurt non-tribal businesses by creating an unfair playing field among fuel station operators.

Automotive United Trades Organization (AUTO) an organization of gas station operators filed suit over the compact and the case is pending before the Supreme Court. AGC on behalf of itself and several other construction associations filed an amicus brief in support of the suit. According to AGC’s Chief Lobbyist and Legislative Counsel Van Collins who authored the amicus brief AGC’s concerns are the potential loss of millions of dollars in infrastructure funding as well as the impact that the loss of these funds could have on the political debate as the Legislature continues to consider a transportation funding package.

Sonntag’s report notes that the amount lost to the state transportation account is likely to grow dramatically. “The growth in the amounts paid tribes annually is reflective of the dramatic increase in the number of outlets operated by the tribes” the report states. “The number of stations operated has tripled in a span of eight years jumping from an estimated 14 locations prior to the compacts to over 50 today. This growth in the number of tribal stations will likely continue as the tribes build new stations or acquire existing ones from non-tribal operators.”

AGC’s concerns would be mitigated if the Tribes were putting money into roads and highways in keeping with 18th Amendment requirements for gas tax funds. But that may not be happening even though the compact requires audits of the Tribes use of the funds. According to the report “The term audit could prove misleading to the public that assumes an audit by a state agency would actually be able to track where the public tax dollars are going when the capability to do so has been denied the Department by the language inserted into the compacts… The compacts themselves allow the tribe receiving the funds to comply by having a short annual statement prepared by the tribe’s accounting firm delivered to DOL. DOL has no ability whatsoever to obtain records receipts invoicing or any other type of verification documents and as a result cannot determine on its own or validate in any professional auditing fashion where any of the funds provided the tribe have gone.

For more information contact Van Collins 360.352.5000.