Washington state’s third-highest-in-the-nation gas tax is going up again on July 1, 2026. It will be the first “automatic” or “inflation-based” increase since ESHB 2711, signed by Governor Bob Ferguson in 2025. The law allows state officials to increase the gas tax by two percent every year and does not require the public or elected officials to vote on the increase.
At a time when gas prices are significantly higher due to ongoing conflict in the Middle East and state policies that artificially increase the cost of gas like the state carbon tax (estimated at $0.52 per gallon), some Washingtonians are feeling the pinch of paying even more than they have to just to drive to work.
According to AAA, Washingtonians already pay more for the same gas than their neighbors in Idaho and Oregon, whose prices typically range from $0.50 to $1.00 less than Washington (AAA as of 6/22/2026: ID – $4.24, OR – $4.84, WA – $5.34). Even school districts are feeling the pinch, as some Eastern Washington districts have saved thousands by taking advantage of Idaho’s less costly gas when filling up their school buses.
Supporters of the tax argued that indexing the fuel tax to inflation will not only allow state agencies to keep up with their own rising costs but also prevents tax increases in the future to fund the highway system. This is a ridiculous claim. An inflation-based increase to a tax is an annual automatic tax increase without the normal accountability of a legislative or public vote.
Yet it’s likely that – even after adjusting for inflation – public officials will stop using inflation as an argument to raise taxes even higher than the yearly automatic increase. Sound Transit, for example, has tax sources that not only adjust with inflation but also with population growth. Sales tax collections at the agency rise as prices rise; for example, a $100 purchase would result in $1.20 going to the agency, and if the price of that item rises to $110, it would result in $1.32 going to the agency. In addition, the Motor Vehicle Excise Tax that Sound Transit imposes rises as vehicle prices rise, since it is based on an exaggerated MSRP value.
Yet despite tax sources that already include inflation, public officials continually argue that new tax revenues are needed due to inflation. But the reality is that construction costs by state and local agencies typically exceed inflation, requiring more and more tax increases to cover their rising spending.
It’s true that road needs in Washington are staggering and in need of attention. The state was poorly ranked by the Reason Foundation, a nonprofit think tank that has reported on road and highway conditions for more than 20 years.
The Reason Foundation found that Washington state’s highways rank 48th in the country, with the state ranking poorly in spending (disbursements) and pavement quality.
The silver lining is that in Washington state the gas tax is protected by the 18th Amendment to the Constitution, which dedicates gas taxes to highways. However, public officials may choose to take some non-dedicated highway revenues and divert them to other purposes as more dedicated funds roll in.
By automatically increasing gas taxes each year, Washington policymakers are ensuring voters will pay even more without the normal public accountability or public debate for a tax increase. This yearly automatic gas tax increase should be towed back to the legislative garage for major repairs.
Bob Pishue is a transportation policy fellow for the Mountain States Policy Center, an independent research organization based in Idaho, Montana, Washington and Wyoming. Online at mountainstatespolicy.org.