Senators unveil bipartisan transportation budget, propose $500 million a year and 0.3% sales-tax dedication

Senator Mark O'Lias, chair of the Senate Transportation Committee, on Wednesday outlined a bipartisan transportation budget and companion revenue plan that he said would generate roughly $500 million a year and permanently dedicate 0.3 percentage points of the state sales tax to transportation beginning in 2027. The proposal pairs an "all-cuts" baseline that shows what would be paused under current resources with a revenue measure intended to protect projects already underway and restore maintenance and safety investments.

The plan, O'Lias said, centers on three priorities: keeping prior investment promises to Washingtonians, preserving and maintaining the existing transportation system, and addressing a "traffic safety crisis" on state roads. "We're not just asking for more, we're trying to do better as well," O'Lias said, describing reforms to accelerate project delivery such as coordinated fish-barrier permitting and procurement changes aimed at securing competitive ferry bids.

Senator King, the package's co-lead, said the Senate pursued the package after identifying a funding shortfall. "Governor Inslee had proposed a $1 billion gap in the biennial budget," King said; the senators said that gap translates, when project schedules and inflation are included, to roughly a $4 billion shortfall across six years. King said the Ways and Means Committee offered a matching structure: if the Legislature raises $500 million in new revenue annually, the committee would provide a 0.3 percentage-point sales-tax dedication beginning in 2027.

The senators said the revenue package relies primarily on a 6-cent increase in the state fuel tax and changes to electric-vehicle and hybrid registration fees, with both the fuel tax and the fees indexed to 2% annually to keep pace with rising costs. A bill summary released with the proposal provides a line-by-line accounting, the senators said; reporters were directed to that summary for full itemization of smaller fees and allocations.

Officials said the proposal aims to protect projects now under construction and to avoid pausing most projects not yet started for at least six years under an all-cuts scenario. O'Lias listed projects that would face delays under the cuts baseline, including final phases of the North Spokane Corridor and Snoqualmie Pass work, and the Highway 18 project.

Ferries were a recurring topic. The senators said the Senate package agrees in broad outline with the governor on delaying conversion of two Jumbo Mark II ferries until after the 2026 World Cup and that it funds steps to restore Bremerton and Triangle runs to pre-pandemic service levels. King noted there are three bidders for the new hybrid-electric ferries and that final prices could affect how many ferries are eventually built. "If prices are higher, we may not be able to build as many ferries," King said.

On passenger-only supplemental services, the Senate proposal does not expand state support and anticipates phasing out supplemental runs as full Washington State Ferries service is restored; the senators said they would make limited temporary supplements to Kitsap Transit and the King County water taxi during the 2026 World Cup.

The senators also said the proposal leaves about $500 million unspent across six years as a contingency to address bid volatility, federal funding uncertainty and other unforeseen costs. O'Lias said the overall combined package totals about $16.2 billion for the 2025-27 cycle when cuts and revenue measures are tallied.

Next steps: the House was expected to release its transportation proposal at noon, the senators said, and the two chambers would need to reconcile differences in conference. O'Lias and King encouraged reporters to consult the bill summary released with the proposal for exact line-item amounts and said they would provide follow-up numbers for some ferry-specific totals on request.