Commissioner French's fuel fibs

Ozias helps Olympia rethink gas tax

Highway 112 is WSDOT’s unwanted stepchild. Commissioner Ozias focuses on state issues. Two years of highway construction starting soon. Local hotel may be demolished for salmon restoration. A solution to help the State’s budget deficit. Whose “fair share” are we talking about?

“We got hit pretty hard by this storm a few weeks ago right before Thanksgiving,” Steve Roark, Washington State DOT’s regional administrator, told the commissioners on Monday. “We still have the roadway as alternating one-way traffic out by Jansen Beach,” he said about a stretch of Highway 112 between Sekiu and Neah Bay.

A WSDOT worker shows the scale of trees that blocked a 7-mile portion of Highway 112 after November’s storm.

“[WSDOT is] hoping to muster the resources to get that restored soon, but we are kinda limited on our maintenance funds right now, so we’re figuring out how we’re going to get that accomplished.”

Transportation funds are indeed tight. Last month, the State’s revenue forecasts for the transportation budget were about $2 billion short for the next decade. Cost estimates for the expensive fish barrier removal program have doubled to $7.8 billion. Culvert replacement projects are the product of a federal court order won by the Northwest Treaty Tribes, which mandates the replacement of fish-blocking culverts under state highways. Roark says about 40% of the State’s barrier removal projects are on the Olympic Peninsula.

“Lees and Ennis Creeks will be a two-year project,” said Roark about two culverts on the east side of Port Angeles. “We’re finding a way to maintain two lanes of traffic in each direction. That work’s going to be completed probably in the fall of ‘26, but it’s going to get underway probably this February.”

Highway 101 is tentatively scheduled to close at Tumwater Creek from early March through May as WSDOT completes another culvert replacement project. Traffic will detour via 8th Street or the Tumwater Truck Route.

The cost of replacing culverts isn’t limited to just highways. In October, the Seattle Times published an article about White Creek in Port Angeles. The article said, “The Washington State Department of Transportation is planning a giant salmon restoration project here that could require buying out a motel owner, tearing down the building and excavating the highway culvert beneath it, at a price tag of some $100 million.”

Olympic Inn & Suites, just west of Frugal’s in Port Angeles, sits on top of White Creek. Photo credit: Seattle Times

According to Jamestown Tribe CEO Ron Allen, that area of Port Angeles is his tribe's traditional territory, and the motel may need to be demolished to promote salmon restoration. However, according to a state survey, even with the hotel removed, many salmon would still be unable to access White Creek due to downstream barriers.

The loss of Olympic Inn & Suites 115 hotel rooms could be offset by the planned 200-room expansion of the Jamestown Tribe’s 100-room hotel in Blyn or the proposed construction of the 106-room Lower Elwha Klallam Tribe’s hotel in downtown Port Angeles.

“We have a lot of influence, and we should be part of the solution,” Allen said in the article about demolishing the hotel. “We should be leading on the solution… You lawyers, I pay you to be creative, so damn it, find your creativity and find me that solution. Find me that language that gives me some flexibility, and we can make this happen.”

Jamestown Tribe CEO Ron Allen stands outside Olympic Inn & Suites in Port Angeles. The stream that runs under it in a culvert, he says, was once the traditional territory of his Tribe and the hotel may need to be demolished. Photo credit: Seattle Times.

Funding transportation

The challenge of funding our state highway system could also use some creative solutions. Commissioner Ozias reported this month that “gas tax receipt collections have plateaued and are on a downward trend.”

There are many reasons gas tax revenues could be declining. For instance, more people are working from home — of the three commissioners, Ozias is most likely to skip driving to Port Angeles. He often joins commissioner meetings via Zoom when priorities keep him at home or take him to Blyn and Olympia.

People could also be driving less because Washington has some of the highest gas prices in the nation. This is primarily due to the State’s Climate Commitment Act, which Commissioner Ozias supported — it’s a hidden gas tax collected by the State and doled out to special interest organizations like the Jamestown Tribe (Ozias’ top campaign donor).

But Commissioner Ozias blames the decline in tax revenue on something else. He says that cars have become so fuel-efficient over the past 15 years that drivers are buying less gas and paying less gas tax — the taxes drivers are paying may need to be reevaluated. Ozias, working with an Olympia-based non-governmental organization, is exploring a way to bridge that funding gap. One solution would be to charge drivers a per-mile fee. Ozias explained that recording drivers' mileage could be achieved through self-reporting or with a GPS tracker.

Paying per mile could be problematic. If a driver leaves Washington and drives on Vancouver Island or into Oregon, they could end up paying a per-mile fee to Washington State while driving on roads maintained by other governments. However, installing GPS trackers in cars so the government can monitor residents’ movements to determine which miles are exempt raises privacy concerns.

The bigger concern might be: When we have elected state representatives like Steve Tharinger and Mike Chapman, why is Commissioner Ozias prioritizing state issues in Olympia instead of working on county issues here?

The funding solution

During public comment, a Sequim resident explained that if the State is having trouble funding transportation projects like clearing trees from Highway 112, it could revisit the agreement requiring that 75% of the gas tax collected at tribal gas stations be returned to the Tribes.

Tribal gas stations like Lower Elwha’s Food & Fuel and Jamestown’s Longhouse Market & Deli collect and remit the $0.49 cent per gallon gas tax to the state but receive a $0.37 cent per gallon, or 75%, refund. For a large gas station like the Longhouse Market & Deli in Blyn which may sell 400,000 gallons of fuel monthly, that’s a $1.7 million refund each year.

The resident asked Commissioner Ozias to relay a message on his next trip to Olympia. “Before you think about taxing us more, or installing trackers in the cars, or going by a pay-per-mile system, have these other gas stations that are selling massive amounts of fuel, have them pay the fair amount. Have them pay the gas tax. That will fund the shortfall that you’re missing rather than putting that burden on the backs of the taxpayers that are still forced to pay it.”

While that request may be in the best interest of Ozias’ constituents, it could go against the wishes of his top campaign donor, the Jamestown Tribe, who has received millions from the gas tax rebate agreement.

According to meeting protocol, commissioners don’t respond during public comment. They say that time is an opportunity to “listen, not respond.” However, Commissioner French wanted to clarify some misinformation after hearing comments about the gas tax rebate.

“The 75% rebate that they [the Tribes] get after they pay the full gas tax when they purchase their fuel, that can only be spent on transportation-related things. So, the gas tax is still supporting our transportation system; it’s just whether the State Legislature decides how to spend that money or if the Tribe has some ownership of how to spend that money on their lands,” said French.

He further explained that the State audits the Tribe’s usage of the gas tax rebate.

Clarifying some misinformation

The State doesn’t audit the fuel tax agreement with the Tribes; a third-party CPA does. According to the State’s 2022 “Tribal Fuel Tax Agreement Report,” audit results are considered “personal information” and unavailable for public review. In other words, there is no transparency regarding how the Tribes spend taxes to fund Washington’s transportation system.

Also, there’s no provision that the Tribes must fund “our” transportation system, as French asserts — the tax rebate funds tribal projects. The State’s requirements for how the Tribes must spend their fuel tax rebate are fairly broad: “Under the 75/25 agreements, tribes may only expend fuel tax proceeds on planning, construction, and maintenance of roads, bridges, and boat ramps; transit services and facilities; transportation planning; public safety; or other highway-related purposes.”

Contrary to French’s statement, the rebates are not required to be spent on tribal transportation projects. According to an article by the Washington Policy Center, that provision changed in 2020 when, during the pandemic, the Tribes contacted the governor with complaints that the rebate restrictions were “preventing, hindering, and delaying tribes’ ability to use fuel tax refund money as tribes determine is most appropriate.” They requested a waiver of those restrictions.

Governor Inslee used his emergency powers to issue a proclamation that allowed Tribes to spend the money on whatever they determined was most appropriate “to respond to the COVID-19 pandemic.” That was in addition to federal money dispersed to Tribes through coronavirus relief fund payments. According to Indianz.com, those payments to Tribes in Clallam County were:

• Jamestown $8,522,365.60 (about 519 members, 217 who live locally)

• Lower Elwha Klallam $7,224,743.27 (about 985 members)

• Quileute $3,555,482.11 (about 808 members)

• Makah $7,687,180.14 (about 1,500 hundred members)

In 2022, the state retained $21.7 million in fuel tax revenue under the 75/25 agreement, and the Tribes received $65.8 million. In 2005, the gas tax given to Tribes was just $5.31 million.

Whose fair share?

“Be persistent about your goal of securing your fair share,” CEO Ron Allen said this March in an interview titled, Jamestown S’Klallam Tribe: A Success Story. “Tribes really need to know how to negotiate and to push the envelope about in identifying their fair share.”

Critics say the 75/25 agreement isn’t fair at all and it’s the Tribes who aren’t paying their fair share. Tribal gas stations can use public money to undercut competition by charging less for fuel. Selling cheaper gas is possible because the 75% refund can backfill any losses for tribal gas stations. This advantage could potentially drive non-tribal competitors out of business and defund our transportation network, shifting that burden onto other taxpayers.

A 2011 Washington Policy Center study found that tribal gas stations consistently undersell regional non-tribal competitors.

Washington State is facing a historic budget deficit next year due, in part, to tax cuts extended to the Tribes. It’s a familiar predicament for anyone living in Clallam County.

Polling

Last week, subscribers were asked if they thought the Jamestown Tribe’s messaging about water conservation was hypocritical. Out of 158 votes, 96% thought it was.