50 www.wpma.com / Fall 2026 State Report WASHINGTON Oil Marketer Association Report Lea McCullough WOMA Executive Director WOMA WIRE What Happens in Washington, Doesn’t Stay in Washington Washington state has long enjoyed serving as a political laboratory for the rest of the country. Unfortunately for those of us who own businesses, employ people, or sell the fuel that keeps the economy moving, the experiments rarely remain safely contained inside the laboratory. This summer, Washington’s gas tax increased again. This time, however, lawmakers did not have to cast another uncomfortable vote. They had al- ready placed future increases on autopilot, ensuring the tax will rise by 2% annually. It is a wonderfully efficient arrangement—at least for politicians who prefer collecting additional revenue without repeat- edly explaining themselves to the people paying it. Meanwhile, Seattle’s new mayor, self-described democratic socialist Katie Wilson, has been conducting an economic experiment of her own. When confronted with concerns that high-income residents might leave Washington because of ris- ing taxes, Wilson waved and told those inclined to depart, “bye.” It was a memorable moment in municipal economic development. Other cities offer tax incentives, stream- lined permitting and workforce programs. Seattle offers a wave from the mayor on your way out. The problem is that businesses may be taking her more seriously than she intended. The Gas Tax Goes on Autopilot Washington increased its state gasoline tax by six cents per gallon in 2025, bringing it to 55.4 cents. On July 1, 2026, the first automatic 2% increase added roughly another 1.1 cents, raising the state gasoline tax to approximately 56.5 cents per gal- lon—before the 18.4-cent federal tax or the costs associated with Washington’s carbon program are considered. Diesel marketers received an additional gift: a three-cent-per-gallon increase in 2025, with another three cents scheduled for 2027. Supporters argue that indexing the tax will provide predictable revenue for roads and bridges. Predictability is valuable, of course. Businesses understand that better than most. But accountability is valuable too. An automatic increase allows lawmakers to avoid publicly defending each new tax hike or demonstrating that existing transportation dollars are being spent effectively. For petroleum marketers across the West, Washington’s policy deserves attention. Once a state discovers how convenient it is to place a tax increase on autopilot, neighboring legislatures have a habit of noticing. The Cost of Carbon Still Reaches the Pump Then there is Washington’s Climate Commitment Act. Under the state’s cap-and-invest program, covered businesses must obtain allowances for their greenhouse-gas emissions, while the number of available allowances gradually declines. State officials call it a market-based system for re- ducing carbon pollution. Critics call it a carbon tax dressed for a policy conference. Whatever terminol- ogy one prefers, fuel suppliers do not purchase al- lowances with imaginary money. Those costs work their way through the supply chain and eventually reach businesses and consumers. Earlier this year, the Washington Policy Center estimated that the price of carbon allowances represented approximately 52 cents per gallon of gasoline and 63 cents per gallon of diesel. The state disputes attempts to draw such a direct line between allowance prices and retail fuel prices, but motorists do not need an economics degree to see that Washington fuel consistently costs more than it does in neighboring states. Marketers understand what policymakers too often pretend not to: increasing the cost of bringing fuel to market does not make that cost disappear. It changes who pays it.
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