The Legislature passed a Transportation Budget with about $3 billion in new revenues that will keep current projects going. The state’s gas tax remains the largest component of overall transportation revenue, and the March 2025 fuel tax projection is approximately $1.7 billion below the February 2024 fuel tax projection over a ten- year period. Therefore, WSDOT was facing a significant revenue shortfall, and without new revenues, some projects would have had to been paused, among other consequences. Even with the new revenue, some projects not yet under contract may be pushed back.
The package of bills now awaits the Governor’s signature.
“Washingtonians expect us to deliver on our promises — to finish long-overdue projects, repair aging infrastructure, and ensure our transportation systems can support the needs of a growing state,” said Sen. Marco Liias, Senate Transportation Committee chair. “This is a sensible, bipartisan solution that balances multiple funding tools while keeping the system running smoothly. I’m grateful for Sen. Curtis King’s partnership in crafting a revenue plan that prioritizes long-term progress for transportation systems statewide.”
“I would like to thank Sen. Liias for asking me to join him, before session began in January, to work together to develop a bipartisan transportation budget, and that is what we have done. I believe we have created a no-nonsense budget that will still keep our state’s transportation system moving forward. Raising fees and taxes is not something we take lightly, but we determined it was the only solution to address our state’s transportation challenges,” said Sen. Curtis King (R-Yakima), the ranking Republican on the Senate Transportation Committee.
Key components of the plan include:
- Fuel taxes: A 6-cent gas tax increase — the first in nearly a decade — paired with a new 3-cent diesel tax in 2026 and another 3-cent increase in 2028. Both taxes are indexed to inflation, and 5% of new fuel tax revenue will go to local governments.
- Vehicle weight fees: Increased fees for trucks and passenger vehicles, phased in starting in 2026, to ensure those causing more wear and tear on roadways contribute their fair share.
- Motor vehicle sales tax: Increases the additional sales tax assessment on motor vehicles from 0.3% to 0.5%.
- Sales tax shift: Redirects 0.1% of the state’s 6.5% sales tax to the transportation budget.
- Luxury taxes: An 8% tax on vehicles over $100,000 and a 10% tax on aircraft over $500,000. Recreational vessels were removed from the luxury tax but will now be subject to a new 0.5% tax.
The final agreement reflects key changes made in the House, which removed several proposed revenue sources from the Senate’s original plan. Among the items cut were the large event facility assessment, an e-bike surcharge, a transit vehicle registration offset fee, additional traffic infraction penalties, and a ferry fare increase beyond 2.5%.
“This transportation budget represents a significant investment in the future of Washington’s communities, economy, and environment,” said Rep. Jake Fey, Chair of the House Transportation Committee. “It funds long-overdue maintenance and preservation projects, supports transit and multimodal infrastructure, and modernizes how we invest in safety and mobility.”
In addition to keeping current projects on track, the measures add about $1 billion over six years to the state’s court-mandated culvert obligations, and small increases to preservation. Preservation is an area that will need continued attention going forward, as even this plan provides far less preservation funding than WSDOT projects is needed.
For the list of projects and the funding they will receive over the next few years, click here.
For 2025-27 appropriations for the major categories (Program I, projects; Program P, preservation), click here (look at the “conference” column).
For the slate of additional revenues, click here. This list does not include the sales tax transfer, as that provision was included in the Operating, not Transportation, budget proposal.
For more information, contact AGC Chief Lobbyist Jerry VanderWood.