WA lawmakers may consider new delivery fee for online and retail orders to fund roads

SEATTLE — Washington State lawmakers are toying with an idea that would add a new delivery fee to online and retail orders to help fund the state’s road infrastructure.

A spokesperson for the Association of Washington Cities (AWC), which represents more than 280 cities across the state, said many cities are struggling to maintain the roads due to tight budgets.

Gas taxes currently support the state’s road infrastructure, but the amount of funding is declining due to people purchasing more electric vehicles and fuel-efficient vehicles, the spokesperson added.

The Joint Transportation Committee, which is bipartisan, is currently researching studies and gathering data on how this new fee could impact Washington for lawmakers to possibly consider.

“The revenues generated would range anywhere from 45 to 112 million per year that then could be distributed to local governments in the state for transportation,” said Dave Catterson, Joint Transportation Committee coordinator.

The study included possible scenarios, such as excluding the fee from orders less than $75 and small businesses.

The AWC told KIRO 7 News that this is just an idea so there are no clear details on what the fee could be.

The Joint Transportation Committee hired consultants, which looked at Colorado and Minnesota, to learn about the fee’s possible impact.

Colorado enforced a 28-cent fee per delivery in 2022, which generated around $75.9 million in its first year, the study found.

In Minnesota, state lawmakers passed a bill to enforce a similar fee, which would charge 50 cents for deliveries costing more than $100. The study estimated that this would generate around $59 million for cities.

State Senator Mark Liias told KIRO 7 News that the idea could benefit many communities and would hold delivery companies, such as Amazon and UPS, accountable.

“That different way of getting goods in our economy means there’s more wear and tear on the roads. When I was driving myself to the mall, I wasn’t driving in a UPS truck or an Amazon van. These vehicles put more wear and tear on our roads, so I think it’s fair to look at those impacts,” he said.

However, Representative Jim Walsh did not agree with the idea, adding that it could hurt working families.

He said the state government needs to do a better job with budgeting, which could create less pressure for local governments.

“I sympathize with the local governments that are feeling that pinch, but to create new taxes on top of existing taxes, and especially new taxes that are aggressive that fall heaviest on working families and poorer families, that’s not a good solution to this budget problem,” he said.

KIRO 7 News drove around Seattle and spoke with people about the new idea.

Jason Tillman, who lives in Seattle, said he supports the idea if the state would consider people with lower incomes.

“I’m in favor of improvement towards our infrastructure,” he said. “If I’m taking transit, however though, I’m kind of at the mercy of the bus, the trains. I want those services, those infrastructures to still be well maintained because being on the bus when it’s super bumpy and there’s potholes everywhere is not an enjoyable experience.”

He also said the possible exemptions could be more harmful than good.

“If they’re (customers) creating multiple transactions below $75, then they may just say, it’s more worth it for me to have a ton of smaller transactions, which would probably be detrimental to the infrastructure, the roads because it’s creating more packaging, more travel, more transportation logistics,” he shared.

But Saysha Belton, a store manager at All The Best Pet Care, a local store in Queen Anne, said the new idea would drive her customers away.

“Immediately that would impact us negatively. We already compete with places like Amazon and Chewy for online orders, and if we have to add extra fees, we’ll definitely lose business because of that,” she said.

Belton said her store serves many older Americans who live on a fixed income.

“They have limited resources, and they’re always trying to get the best deals for things, and I feel like more unnecessary fees are going to turn them away,” she said. “They really rely on deliveries for cat litter and stuff like that. They can’t get that back to their place and so if they have to pay more, they’ll probably turn to Amazon for free shipping.”

The JTC said it should finalize its studies by the end of June.

There’s no current timeline for lawmakers to create a bill.

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