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Washington House backpedaling on export fuel tax

Generic Washington State

By Brett Davis | The Center Square

(The Center Square) – The likelihood of a regional trade war and a protracted court battle over Washington state’s proposed 6-cents per gallon export fuel tax waned in late February.

That’s because the chair of the Washington State House Transportation Committee proposed an amendment that would remove the controversial tax on fuel exports from the Democrats’ $16 billion, 16-year transportation package.

The amendment would remove the export fuel tax – expected to generate $2 billion – and replace it with an annual transfer from the Public Works Assistance Account.

“People told us loud and clear that this was not going to work,” said Rep. Jake Fey, D-Tacoma, in a Saturday press release. “From the beginning, this package has been about listening to people’s needs and making historic investments in Washington for years to come. We’ve come up with a reasonable, workable solution that takes the pressure off working people and contributes to a stronger partnership with our neighbors in other states.”

One of those people is Alaska Rep. Kevin McCabe, R-Big Lake, who last week introduced a pair of bills in response to the export fuel tax proposed by Washington Democrats.

One bill would match Washington’s 6-cents a gallon on refined fuel exported to Alaska with a tax of 6-cents per pound of fish exported from Alaska to Washington. The other bill would create a scheme whereby Washington boats moored in Alaska harbors would have to pay 6-cents per foot of the ship’s length. Alaska’s boats would have to pay the tax upfront as well but would get it back through a tax credit.

“I have no desire to tax anyone, let alone my neighbors and business partners in Washington,” McCabe said in a weekend email to The Center Square. “If the full Washington legislature rejects the fuel export tax, I will, of course, shelve both of my bills. I am not interested in an interstate trade war with my neighbors and I hope they feel the same.”

The House expects to debate the revenue portion of the package, House Bill 2119, this week. 

“The robust public input we received is vital to the legislative process,” Fey said. “After taking those concerns to heart, I’m confident we have a clear path forward to serve the people of Washington and meaningfully transform our transportation system. In the coming days, we will review the investments as well as other revenue options.” 

The Senate resources portion of the package, Senate Bill 5974, also contains the export fuel tax. It’s expected to be removed as well.

The export fuel tax proved unpopular with Washington’s neighbors almost from the start. In addition to Alaska, leaders in Oregon and Idaho balked at the tax plan that would impact their citizens, threatening lawsuits and retaliatory measures.

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