Washington state Gov. Jay Inslee confirmed Thursday he is not considering a state gas tax holiday, despite the continuing high prices at the pump.
President Joe Biden urged Congress Wednesday to suspend federal gasoline and diesel taxes for three months. Inslee told The Daily News temporarily ending the state gas tax would not lower high gas prices in Washington.
“There is no mechanism to assure that any reduction of that tax will be passed onto motorists. In fact it’s almost the opposite — you can be assured gas companies will soak up the lion’s share of those dollars for their profits,” Inslee said.
While in Kelso for an event honoring Bill and Bert Ammons, Inslee told The Daily News suspending the state gas tax could jeopardize funding for road and transportation projects across the state, which are covered by gas tax revenue. Inslee questioned if bond requirements for some transportation projects currently on the books would even allow the state to enact a gas tax holiday.
“It is a challenge for people, we understand that, but there are forces that the state of Washington cannot control,” Inslee said.
Washington is one of six states where average gas prices are currently higher than $5.50 per gallon. The state has one of the highest gas taxes in the county at 49 cents per gallon of gasoline. The federal gasoline tax is 18 cents per gallon and the federal diesel tax is 24 cents.
A study released this month by the Penn Wharton Budget Model research group looked at the effects of the gas tax holidays that Georgia, Maryland and Connecticut enacted earlier this year. The models estimated that roughly two-thirds of the reduction in gas prices was passed onto consumers.
How long the states kept their reduced prices was a more mixed bag. In Georgia, gas prices remained low until the holiday ended at the beginning of June. Connecticut’s gas tax holiday is in effect until the end of June, but prices have already climbed to higher than they were before the pause began.
Despite rising costs today, Washington’s revenue projections are on track to end the year $1.46 billion higher than expected, the state Economic Revenue and Forecast Council announced this week. Projections for the 2023-2025 budget cycle have increased by more than $600 million.
The governor said the rising revenue indicates a strong state economy, which will help to address gas affordability and other rising costs of living.
“That does not minimize people’s concerns about raising prices at all, but the fact that we have such huge job creation and business success, that’s a sign of success,” Inslee said.
He said the state Legislature will decide the use of the surplus when they convene in January.
Inslee said some aid for families struggling to pay for gas and housing will come year when the Working Families Tax Credit takes effect. The credit, which was enacted by the state government in 2021, will provide low-income families with a yearly rebate of between $300 and $1,200.