Pay-Per-Mile Taxes are Coming

by Ruth Peterson | Mar 26, 2021 | 2021 Olympia Bills to Watch, Alerts about pending legislation 2021

by Ruth Peterson

Here’s an example of how bad policy is allowed to creep into our lives. All of a sudden you are blind-sided and wish you knew where it came from.

One good example is one I’ve already talked about – the Capital Gains Income Tax. It’s advertised right now as just a tax on the super wealthy, but the goal is to have an income tax. Once the super wealthy have either moved to another state or used their team of accountants to shield their income, the Legislature will end up lowering the threshold and increasing the percentage of the tax. In several years’ time, the middle class will be paying the income tax, and we will all wonder how we got there!

I want to make you aware of another bill that is introducing bad policy – one that will affect all of us, especially those of us in the rural areas. This has to do with a tax-per-mile scheme. The bill is SB 5444. Click here to read the bill report.

This bill will require electric car owners to pay a few per mile. Right now they pay a pretty hefty fee yearly, since they do not pay gas taxes – or may pay severely reduced taxes because their energy comes from electricity. But their vehicle does require infrastructure, so there needed to be a way to pay for road use. Hence the yearly fee. But this new fee will be per mile. It will begin in 2026, just a few years from now. Why is that a bad thing you ask? Well, it’s because as soon as they have the kinks worked out of a pay-per-mile system for EVs, it will be applied to everyone. Right now, because of the hefty yearly fee, most electric car owners will love to change. So WSDOT will have a small number of drivers in a pay-per-mile program. Perfect for getting any problems ironed out before rolling it out for everyone.

Pay-per-mile has some issues.

For those of us in the rural areas, just going to the grocery store can require a drive of many miles. In an urban area, which sometimes has a much higher need for transportation infrastructure, the mileage would not be so great.
Also in the rural areas, many miles are often driven on farmland – private roads. On some farms, over ½ of their miles are driven on private roads. Not only would that increase their costs, they would have to pass those increased costs on to the consumer.

Related to the question of how to differentiate between private and public roads, what if you are a snowbird? If you live in AZ for several months out of the year, how will they tell how many miles were on WA State roads?

Privacy is an issue. This bill would exempt private information from public records, but it certainly doesn’t keep WSDOT from having all your private transportation records. If you have a GPS built into your car or a good-to-go pass, you will have your travel monitored. In fact, in the trial for this program, you would get a letter each month telling you how many times you went over the speed limit. Many people find that idea a little too invasive. The other option would be for them to read your odometer every year, but then we are back to the private/public road and WA/AZ question.

Right now, the 18th Amendment to the WA State Constitution requires that all gas taxes go to roads. There is a requirement in this bill to “take a look at this,” but unless the Constitution is changed to restrict the use of the money received from these fees, it would just take the Legislature on vote on one bill to sweep the funds for other purposes. They’ve already talked about how nice it would be to pay for other things. Yet another tax that could be utilized for the never-ending black hole that is state government.

This bill, which will affect just a relatively few EV owners is the basis for a new program that will be expanded to include all vehicles. By implementing it on a small group at the beginning, they wouldn’t get the overwhelming opposition they would get if the taxing scheme affected everyone. There are not enough EV drivers to kick up a fuss, and they would probably be better off anyway, since this methed of taxation is less expensive than the yearly fees. It’s a bad policy the way they are talking about implementing it.

As with everything, the devil is in the details, and a policy is only one legislative session away from change unless it is included in the Constitution. I’d watch this one very carefully, if I were you. All terrible policies tend to start out as a little change – several baby steps later, people will wonder what hit them!