Senate Transportation Committee warned of multi‑billion‑dollar shortfall in transportation budget

On Feb. 27, 2025, the Washington State Senate Transportation Committee heard a detailed briefing from Haley Gamble, budget coordinator, showing a roughly $1 billion shortfall in the 2025–27 biennium and a growing multi‑billion‑dollar gap through 2031.

Gamble told the committee the governor’s proposed budget included a $1,000,000,000 placeholder to balance accounts for 2025–27 and that, without that placeholder, a cumulative shortfall would reach about $2.6 billion by 2027 and approach $4.0 billion over a six‑year horizon. She said the gas tax forecast used for the adopted budget has declined by $332,000,000 (about 9.7%) since the forecast was produced and that the transportation budget lost roughly $2.5 billion in revenue since 2020 during the COVID period.

The projected deficits are concentrated in accounts that the presenter identified as repeatedly negative and reliant on transfers: the state patrol account, the Puget Sound capital construction account and ferry operations. Gamble said policymakers could respond with reductions, delays, new revenues, or a combination of those approaches.

Gamble explained order‑of‑magnitude illustrations: the total transportation operating budget is about $6.2 billion; after excluding required debt service, roughly $4.3 billion remains subject to discretionary reductions, meaning a $1 billion operating‑only cut would be nearly a 25% reduction across discretionary operating spending. On the capital side, she said a roughly 12% reduction in the 2025–27 capital program would reduce spending by about $1 billion. She also reported there is about $1.1 billion in highway improvement program funding in 2025–27 that is not yet under contract (excluding fish passage, culvert, preservation, safety and stormwater projects), and that removing those projects would still not close the total multi‑biennium gap.

Gamble reviewed specific program pressures: the ferry capital program contains several large uncommitted projects (including funding for five new vessels, terminal electrification and vessel conversions to hybrid electric), and she said the ferry fleet is near the end of useful life for roughly half the vessels. She summarized potential revenue options analyzed by staff: an 8.7¢ increase in the gas tax was estimated to raise about $500 million in 2025–27; a $10 increase in vehicle registration fees about $120 million; modest increases in passenger vehicle weight fees, light truck fees and freight/weight fees would together produce additional revenue but, when combined, still fell a bit short of $1 billion in the current biennium in the staff illustration.

Gamble emphasized these illustrations were staff exercises, not committee proposals. "This is all hypothetical. No one's asked for this," she said. Committee leadership said a budget proposal would be presented to members and the public in about a month.

Why it matters: the shortfall affects system preservation, ferry service and large capital projects. Gamble noted Department of Transportation estimates that returning the multimodal system to a state of good repair could require roughly $1.5 billion per year beyond currently programmed resources, and that ongoing cost increases and higher bids continue to pressure the financial plan.

The committee did not take formal action during the work session. Members asked clarifying questions about the number of vessels funded in the ferry capital program and the timing of pending RFPs; Gamble said the current vessel funding shown in the budget illustration covered five new vessels and would include those awaiting bid returns.

The presentation concluded with committee leadership reminding members that the budget cabinet has been working on these tradeoffs and that additional staff work and caucus discussions would continue ahead of a formal proposal to the committee.