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Budget squeeze has Washington eyeing new route for sales tax dollars

Apr 16, 2025, 5:16 PM

sales tax...

A bicyclist rides on a bicycle lane. (Photo: Michele Tantussi via Getty Images)

(Photo: Michele Tantussi via Getty Images)

In a move that feels more like a giant game of financial musical chairs than traditional budgeting, Washington lawmakers are considering a bill that would reroute state sales tax money to better fund green transportation efforts鈥攑ulling it away from traditional general fund spending.

It’s coming very late in the session as the majority party, the democrats, scramble to find new sources of revenue. The proposal would not be a new tax but more of a robbing Peter to pay Paul situation.

Critics argue it鈥檚 taking money that would normally help fund schools and redirecting it to transportation efforts, which are typically paid for with the state鈥檚 gas tax.

, backed by bipartisan sponsors鈥擠emocratic Sen. Marko Liias (D-Everett) and Republican Sen. Curtis King (R-Yakima)鈥攁ims to rebalance how the state splits up its sales tax dollars.

The bill already got a thumbs-up from the Senate Transportation Committee on April 4 and is now up for a hearing in the Senate Ways and Means Committee on Wednesday. That same hearing will also feature testimony on a big package of new revenue proposals, all designed to plug a $16 billion hole in both the general fund and transportation budgets.

Where will the money go?

Starting in July 2027, 0.1% of the state鈥檚 6.5% sales tax would be permanently funneled into the Multimodal Transportation Account. That fund pays for everything from buses and ferries to pedestrian paths and rail systems鈥攂asically, anything that doesn鈥檛 involve you driving solo to work.

The bill also cancels or delays several previously planned fund transfers. For example, annual $57 million payments from the state鈥檚 Public Works Assistance Account and General Fund to transportation programs鈥攑art of the 2022 Move Ahead Washington package鈥攁re now off the table, at least through 2027. Another $111.9 million that was supposed to support the 2015 Connecting Washington program is also getting the axe.

On top of that, the bill speeds up repayment of some long-delayed tax bills for the Tacoma Narrows Bridge and SR 520 Floating Bridge projects. Originally, the state planned to start repaying deferred sales taxes 24 years after the projects were completed (2031 and 2041, respectively). Now, those payments will begin by the end of fiscal year 2026. Toll revenues are expected to eventually reimburse the state鈥檚 accounts鈥攂y 2032 for Tacoma Narrows, and by 2050 for SR 520.

Supporters say the net effect is more stability. 鈥淭his is about making sure our budget can handle future bumps while keeping critical transportation investments moving forward,鈥 Sen. Liias said during the committee he chairs. 鈥淚t鈥檚 a balanced, long-term approach.鈥

Not everyone鈥檚 on board. Critics worry this kind of tax-shuffling could hurt schools down the line.

Will schools and other programs suffer?

Andrew Villeneuve, executive director of the Northwest Progressive Institute, testified against the bill, arguing that taking any money out of the General Fund鈥攅ven just 0.1% of sales tax鈥攑uts pressure on other public services, especially education.

鈥淲ith potential federal cuts looming, now鈥檚 not the time to start picking away at funding that supports K-12 schools, colleges, and universities,鈥 Villeneuve warned. 鈥淭ransportation is important, but not at the expense of our constitutional duty to educate Washington鈥檚 kids.鈥

Supporters counter that the move actually strengthens the operating budget by giving it more breathing room in the short term鈥攁bout $500 million worth鈥攁nd helps cover costs in the upcoming 2025鈥27 biennium.

The bill includes two new $304.7 million General Fund transfers to transportation for the 2027鈥29 period, likely as a way to soften the financial blow over time.

Bottom line? SB 5802 is a complicated mix of cuts, shifts, and early payments that could reshape how Washington pays for its roads and rails.

Matt Markovich is the 成人X站 Newsradio political analyst. Follow him on聽. Read more of his stories聽here.

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Budget squeeze has Washington eyeing new route for sales tax dollars