Legislature considers Road Usage Charge (RUC) as gas tax replacement

Legislation to enact a Road Usage Charge (RUC), or vehicle miles traveled charge, has been introduced in both the House and Senate. HB 1921 is sponsored by House Transportation Committee Chair Jake Fey (D-27), and SB 5726 is sponsored by Senate Transportation Committee Vice Chair Bill Ramos (D-5).

AGC has encouraged the effort to implement a replacement for the gas tax, which is the primary, but diminishing, source of funding for road, highway and bridge construction.  Revenues from the gas tax hit a peak in 2019, and has been declining ever since, and is expected to continue to decline as more electric and high gas mileage cars are used.

“RUC isn’t a panacea for our transportation funding challenges.  We’re in a hole, and RUC is a way to stop digging,” said AGC Chief Lobbyist Jerry VanderWood at the House Committee hearing.  “It’s a funding stream that would be protected by the 18^th Amendment to the State Constitution like the gas tax is, ensuring that the revenue is spent for highway and bridge purposes.  That is the key element we’ve advocated for since the idea was first explored years ago, and we appreciate that the sponsors intend to give it this protection.”

At a press conference introducing the bill, Rep. Fey said, “For over a century the gas tax has served as a user fee, funding our roads and bridges. With more fuel-efficient and electric vehicles, that revenue is disappearing. The RUC ensures that all drivers contribute fairly by paying for their road usage, rather than paying by the gallon of gas they consume.”  To view Rep. Fey’s entire press conference, in which he goes into more detail, click this TVW link. 

One of the most important questions that is often raised about the RUC legislation, which is pegged at 2.6 cents per mile, is its interplay with the current gas tax.  Drivers will get a credit towards the RUC for gas taxes paid – it’s not a tax on top of the existing tax.  The impact on individual drivers will vary depending on the MPG of their cars; drivers with high MPG cars will generally pay more under RUC than they do in gas tax.  Low MPG cars (under 20 MPGs) will not be under the RUC system at all; they’ll continue under the gas tax.

The intention is to be revenue neutral such that the net collected by the RUC will equal current gas tax revenues.  There is a bit of controversy here in that the RUC has a higher collection cost than the gas tax, and that cost will be factored into the RUC.  Plus the legislation adds a 10% surcharge on the net RUC payment (that is, if the annual RUC bill is $200, but $190 is credited for the gas tax, the surcharge applies to the $10 net).  This funding goes to “multi modal” purposes.

Plus there had been concerns about GPS tracking raised during the pilot project to test the RUC approach.  The bills, however, offer the option of self-reporting of mileage; tracking is optional.

Particularly those who reside near the state’s borders have raised concerns about how out-of-state driving would be accommodated.  The bill gives everyone a 200 mile “standard deduction” to help accommodate for that, and there will be opportunities to claim more for frequent or long-distance out-of-state driving.

Finally, the program will have a long glidepath to full implementation, starting with a voluntary phase before a mandatory one, with full implementation in 2035. Tweaks are already being considered.

The following information was provided via Rep. Fey’s press release:

Why Washington Needs a RUC 

• Gas tax revenue funds more than a third of the state’s transportation budget ($1.3B annually). 
• Without action, gas tax revenue will decline by over 70 percent by 2050, leaving roads significantly underfunded. 
• Without a RUC, the gas tax would need to nearly quadruple to $2 per gallon by 2050, just to maintain current revenue levels. 

How RUC Works 

Washington will gradually transition to a road usage charge system over the next ten years, starting with passenger vehicles under 10,000 pounds: 

• Phase 1 (2027-2029): Voluntary for EV and hybrid drivers (registration fees waived). 
• Phase 2 (2029-2031): Mandatory for EVs/hybrids; voluntary for fuel-efficient gas vehicles (20+ mpg). 
• Phase 3 (2031-2035):Mandatory for all gas vehicles with 20+ mpg. Beginning July 2031 – 2035, fuel-efficient car will be phased in from most to least fuel-efficient 
• Rate:2.6 cents per mile (adjusted periodically to match gas tax revenue). 
• Annual Odometer Reporting: Self-reporting required starting in 2026; GPS tracking is optional. 
• Gas Tax Credit: Drivers pay either RUC or gas tax, not both—gas tax already paid will be credited. 
• Standard Mileage Deduction: All vehicles will receive a standard deduction of 200 miles each year off of their road charges. 

Addressing Common Concerns 

• Does RUC require drivers to report their driving location?No. Only annual total miles driven is required. Odometer mileage can be self-reported.  
• Does RUC require drivers to install technology in their cars?No. Technology including GPS is strictly optional. 
• Will rural drivers pay more than urban drivers?No. All vehicles pay the same per-mile rate of 2.6 cents/mile. (See table below). 
• Does RUC discourage EVs? No. EV and hybrid drivers will still save money by buying less gasoline. And they will no longer pay the annual $225 EV or $75 hybrid registration fees.