WA lawmakers could consider new delivery fees for online and retail orders to fund roads

Washington state lawmakers are considering an idea that would add new delivery fees to online and retail orders to help fund the state’s highway infrastructure.

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

Gas taxes currently support the state’s highway infrastructure, but the amount of funding is decreasing due to the purchase of more electric and fuel-efficient vehicles, the spokesperson added.

The bipartisan Joint Transportation Committee is currently studying studies and gathering data on how these new fees could impact Washington, so lawmakers can potentially consider them.

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

The study included possible scenarios, such as excluding fees for orders under $75 and small businesses.

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

The Joint Transportation Committee hired consultants who studied Colorado and Minnesota to learn the possible impact of these fees.

Colorado imposed a fee of 28 cents per delivery in 2022, which generated about $75.9 million in its first year, according to the study.

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

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

“This different way of moving goods through our economy means there is more wear and tear on the roads. When I drove to the mall, I didn’t drive in a UPS truck or an Amazon van. These vehicles are causing more damage to our roads, so I think it’s fair to look at those impacts,” he said.

However, Rep. Jim Walsh disagreed with the idea, adding that it could hurt working families.

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

“I sympathize with local governments who are feeling this pinch, but creating new taxes on top of existing taxes, and particularly aggressive new taxes that fall heaviest on working families and poorer families, does not “is not a good solution to this budget problem,” he said.

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

Jason Tillman, who lives in Seattle, said he supports the idea if the state considers low-income people.

“I support improving our infrastructure,” he said. “But if I take public transport, I am a bit at the mercy of the bus, the train. I want these services, this infrastructure to always be well maintained, because being on the bus when it’s very bumpy and there are potholes everywhere is not a pleasant experience.

He also said that possible exemptions could do more harm than good.

“If they (customers) create multiple transactions under $75, then they can just say: it’s more worth it for me to have a ton of small transactions, which would probably be detrimental to the infrastructure, to the roads , because it creates more packaging, more travel, more transportation logistics,” he shared.

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

“Immediately it would have a negative impact on us. We’re already competing with sites 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 his 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 on things, and I feel like additional unnecessary fees are going to turn them away,” she said. “They really rely on cat litter deliveries and that sort of thing. They can’t take it home and so if they have to pay more, they’ll likely turn to Amazon for free shipping.

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

There is currently no deadline for lawmakers to create a bill.