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CHAMBER BLOG

How Public Policy Impacts Energy Costs in Washington State

6/23/2025

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How Public Policy Impacts Energy Costs in Washington State

​Join the Tri-City Regional Chamber of Commerce for an important Regional Advocacy Roundtable on Tuesday, July 1, 2025, at 8:00 a.m. at the Tri-City Business and Visitor Center. This event has passed. 

This timely discussion, titled "Behind the Bill – How Policy Shapes Our Energy Costs," will explore how recent legislation and public policy decisions influence the prices of electricity and fuel in Washington State. Business leaders, policymakers, and energy experts will break down what’s driving costs and what it means for local employers and residents.
How Public Policy Impacts Energy Costs in Washington State

The cost of energy in Washington, whether it is the price of gas at the pump or your monthly electricity bill, is shaped by more than just supply and demand. Public policy decisions made at the state and local levels play a major role in how much we pay for energy. Taxes, fees, climate laws, and utility rules all impact the final cost to consumers. While these policies aim to protect the environment and improve infrastructure, they also add to the monthly energy expenditure of individuals and businesses.
 
Gas Taxes and Fuel Policies

Washington has one of the highest gas taxes in the country. As of now, drivers pay 49.4 cents per gallon in state tax, plus 18.4 cents in federal tax, bringing the total to nearly 68 cents per gallon. In addition, there are smaller fees, such as underground storage tank fees and local fuel taxes, in some areas. These taxes help fund transportation projects such as road repairs, bridge upgrades, and highway maintenance, but they are directly passed along to consumers.

The Clean Fuel Standard, which began in 2023, is another policy that affects gas prices. This pushes fuel companies to use cleaner fuels by requiring them to lower the carbon content of their products or buy clean energy credits. It is estimated that this program has only added approximately one to four cents per gallon, but these costs may increase in the future.
 
The Climate Commitment Act (CCA)

The Climate Commitment Act is Washington’s “cap-and-invest” program. It sets a limit on the amount of carbon pollution that large companies can emit. Businesses that exceed this limit must buy carbon credits at state-run auctions. These extra costs are passed on to customers. For gasoline, this has raised prices by an estimated 9–25 cents per gallon.

Electric utilities and natural gas providers are also included in the CCA. They face higher costs for using fossil fuels, which can lead to higher electricity bills.
 
The Clean Energy Transformation Act (CETA)

The Clean Energy Transformation Act passed in 2019 requires utilities in Washington to move away from fossil fuels. They must stop using coal by 2025, become carbon-neutral by 2030, and provide 100% clean electricity by 2045. To meet these goals, utilities are investing in wind, solar, and battery storage, and upgrading the electric grid.

These investments are expensive, and utilities recover these costs through customer rates. This means that electricity bills will increase, particularly in the short term. Some utilities also add small charges, such as a $1.77 monthly fee in Skamania County, to help cover clean energy programs. Over time, as the cost of renewable energy drops and efficiency improves, the hope is that clean energy will become more affordable.
 
Utility Taxes and Local Charges

Many cities and counties in Washington also charge utility taxes or franchise fees on electricity and natural gas. These fees are often a percentage of your bill, usually between 3% and 9%, and are added directly to your monthly charges. In areas served by public utility districts (PUDs), there may also be special privilege taxes which the utility may pass along to customers.
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Additionally, policies that promote rooftop solar or electric vehicle infrastructure can lead to higher system costs. These are sometimes shared across all ratepayers, depending on how the utility sets its rates.
 
From the gas pump to the power outlet, public policy affects how much we all pay for energy in Washington. State gas taxes, the Climate Commitment Act, the Clean Energy Transformation Act, and local utility fees all play a role. While the goal of these policies is to create a cleaner and more efficient future, they do have real impacts on current prices. Understanding how these programs work can help residents and businesses make smart decisions regarding their energy use and prepare for future changes.
Register for the Roundtable
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Chick-fil-A Ribbon Cutting and Grand Opening

6/19/2025

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Congratulations to Chick-fil-A on their ribbon cutting on June 18! The restaurant - the first Chick-fil-A in the Tri-Cities - is now officially open to the public. Check out their yummy food selection at 7009 W. Canal in Kennewick.
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Washington State’s 18th Amendment: Shaping Transportation Funding for Generations

6/17/2025

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Washington State’s 18th Amendment: Shaping Transportation Funding for Generations
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When people hear the “18th Amendment,” they often think of the Prohibition era in U.S. history. However, in Washington State, the 18th Amendment has an entirely different meaning—one that directly affects how we build and maintain roads and highways.
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Adopted by voters in November 1944, Washington’s 18th Amendment, found in Article 2, Section 40 of the State Constitution, shaped the state’s transportation system for more than 80 years. At its core, the amendment ensures that the money collected from motor fuel taxes and vehicle license fees is used exclusively for highway purposes. This provision has become the cornerstone of Washington’s approach to transportation planning and infrastructure investment.

A Constitutional Guarantee for Road Funding
The 18th amendment mandates that revenues from gas taxes and car and truck license fees go into a dedicated fund. This money can only be used for highway-related expenses, such as building and repairing roads, bridges, and highways; paying for engineering and legal work tied to these projects; installing and maintaining traffic signals and signage; and operating elements of the highway system such as bridges and ferries. Importantly, it cannot be spent on public transit systems, bicycle infrastructure, or pedestrian walkways.
This strict allocation of funds was intended to protect the interests of drivers, ensuring that the money they contribute through taxes and fees is reinvested in the roadways they use. Before 1944, those funds could be diverted for other uses, sparking concern among voters who wanted greater transparency and accountability in how transportation dollars were spent.

Why It Matters Today
The 18th amendment plays a vital role in Washington’s ability to fund long-term transportation projects. Providing a consistent and protected revenue stream allows the state to plan and execute major initiatives, such as freeway expansions and bridge replacements, with greater confidence. The amendment also reinforces fiscal transparency by preventing lawmakers from reallocating highway funds to unrelated programs, a safeguard that helps maintain public trust in government budgeting.
Beyond financial management, the amendment supports the state’s economy by sustaining a reliable network of roads and highways. An efficient transportation infrastructure is critical for moving goods, services, and people throughout Washington. By securing funding for these purposes, the amendment underpins broader economic activities and regional trade.

Impacts on Budgeting and Policy Decisions
The influence of the 18th amendment extends well beyond road construction. Over the past two decades, increases in gas taxes have helped finance landmark transportation projects, such as the I-405 corridor improvements, the new SR 520 floating bridge, and critical repairs to I-5. However, the amendment also creates budgetary challenges. Because its rules only allow spending on highway-related purposes, funding for public transit, ferries, and non-motorized transportation must come from other, more flexible sources such as general sales tax revenue or carbon pricing programs.
This division of transportation funding into “protected” and “unprotected” categories adds complexity to the state’s budget planning. Lawmakers must carefully assess each proposed project to ensure it aligns with the amendment’s legal definition of “highway purposes.” Courts have weighed in on several gray areas, sometimes ruling that park-and-ride facilities or utility relocations related to road projects qualify—and sometimes not—depending on the circumstances.

A Key Piece of Transportation Policy
For legislators, the 18th amendment set clear boundaries on how gas tax revenue can be used. Careful planning and legal review are required to ensure compliance and to avoid misallocations that could trigger legal challenges. More broadly, it shapes the way Washington prioritizes transportation spending and infrastructure development.
While the amendment has provided funding stability and helped build a robust highway system, it also limited the state’s ability to shift focus toward modern transportation needs, such as expanding public transit or preparing for a low-emission future. As Washington faces growing challenges—traffic congestion, climate change, and the shift to electric vehicles—some policymakers and advocates are beginning to question whether the 18th amendment still reflects the state’s transportation priorities.

Washington’s 18th Amendment is more than just a financial rule; it is a foundational element of the state’s transportation strategy. This ensures that funds collected from drivers are reinvested in the roads and highways on which they rely, providing transparency and economic support. However, as transportation needs evolve, the amendment also imposes constraints on innovation and flexibility. The debate over its future is likely to continue, but for now, it remains a guiding force in how Washington builds and maintains its transportation infrastructure.
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June 2025 Business After Hours at Grace Clinic

6/13/2025

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​Thanks to everyone who came to Business After Hours at Grace Clinic on Thursday, June 12. We hope you had a great time and made some valuable new connections!
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Air-Tight Windows & Remodeling Ribbon Cutting

6/11/2025

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Congratulations to Air-Tight Windows & Remodeling on their ribbon cutting ceremony on Thursday, June 5! You can visit their new location at 1017 Wright Ave. in Richland.
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Unlocking Economic Growth: Understanding Opportunity Zones in Benton and Franklin Counties

6/9/2025

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​Unlocking Economic Growth: Understanding Opportunity Zones in Benton and Franklin Counties

​Opportunity Zones (OZs) are designated areas that aim to stimulate economic development in distressed communities by offering tax incentives to investors. Established under the 2017 Tax Cuts and Jobs Act, OZs encourage investment in low-income areas by providing tax benefits to those who reinvest capital gains in these zones.

Purpose and Function of Opportunity Zones
The primary goal of OZs is to spur economic growth and job creation in the underdeveloped regions. Investors can defer capital gains taxes by reinvesting those gains in ((QOFs) that finance projects within OZs. If an investment is held for a certain period, investors may benefit from reduced or eliminated capital gains taxes on the new investment.

Opportunity Zones in Benton and Franklin Counties
In Washington State, 139 census tracts have been designated as Opportunity Zones, including areas within Benton and Franklin Counties. In Benton County, the city of Kennewick features two OZs: the Vista Opportunity Zone and the Downtown/Waterfront Opportunity Zone. Franklin County's city of Pasco also contains designated OZs aimed at attracting investments to stimulate local economic development.

Current Status and Future of the Program
As of 2025, the Opportunity Zone program will remain active, with key tax benefits available to investors. However, the program is set to expire on December 31, 2026, unless extended by new legislation. Recent legislative proposals aim to renew and enhance the program, potentially extending its benefits beyond the current expiration date.

Tax Advantages and Limitations
Investing in OZs offers several tax benefits:
  • Deferral of Capital Gains: Taxes on prior gains can be deferred until the earlier of the sale of the new investment, or December 31, 2026.
  • Reduction of Deferred Gain: If the investment is held for at least five years, there is a 10% exclusion of the deferred gain.
  • Exclusion of Gains from OZ Investment: Gains from the OZ investment itself can be excluded from taxes if held for at least ten years.
However, limitations exist. The initial benefits related to step-ups in basis for investments held for five or seven years are no longer available for new investments, as the program's timeline does not allow for these holding periods before the 2026 deadline.

Resources for Further Information
For those interested in exploring OZ opportunities in Benton and Franklin Counties, local economic development offices and the IRS provide resources and guidance. The Port of Pasco offers information on OZs within Franklin County, while the City of Kennewick provides details on its designated zones. In addition, the IRS website contains comprehensive information on OZ regulations and benefits. Additional information on OZ can also be found by visiting Opportunity Zones | HUD.gov / U.S. Department of Housing and Urban Development (HUD)
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Conclusion
Opportunity Zones present a strategic avenue for investors to contribute to the revitalization of economically distressed areas while receiving tax incentives. In Benton and Franklin Counties, these zones offer the potential for community development and economic growth. As the program's future beyond 2026 remains uncertain, stakeholders should remain informed of legislative developments to maximize the benefits of OZ investments.
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Breaking Down Washington’s Unemployment Insurance Taxes: Experience-Rated vs. Social Cost

6/4/2025

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​Breaking Down Washington’s Unemployment Insurance Taxes: Experience-Rated vs. Social Cost

In Washington State, experience-related tax and social cost tax are the two primary components of the Unemployment Insurance (UI) tax system. Both are paid by employers; however, they serve different purposes and are calculated differently.
 
1. Experience-Rated Tax

The Experience-Rated Tax is based on an individual employer's history of layoffs and unemployment claims. Employers with more layoffs in the past are assigned a higher tax rate, whereas those with fewer layoffs pay a lower rate. This system incentivizes employers to minimize layoffs and maintain workforce stability.

How It Works:
  • Experience Rating:
    • Washington State uses a "benefit ratio" method to calculate an employer's experience rate.
    • The benefit ratio is determined by dividing the total amount of UI benefits paid to the employer's former employees over a three-year period by the employer's taxable payroll during the same period.
  • Assigned Rate:
    • The employer's benefit ratio is compared to other employers in the state and assigned to a "tax class."
    • Washington has multiple tax classes ranging from lower rates for employers with fewer layoffs to higher rates for those with more layoffs.
  • Who Pays?
    • Employers only pay this tax. This amount varies according to the employer’s individual experience.
  • Collection:
    • This tax is collected quarterly, along with the Social Cost Tax, as part of the total UI tax rate.
 
2. Social Cost Tax

The Social Cost Tax covers the costs of unemployment benefits that cannot be directly attributed to specific employers. These include:
  • Benefits paid to workers whose employers went out of business.
  • Costs of unemployment claims that exceed an individual employer's contribution.
  • Other non-chargeable benefits include those related to state-mandated programs.
How It Works:
  • Pooled Cost:
    • The total amount of non-chargeable benefits is calculated statewide each year.
    • The cost is shared among all employers in the state regardless of their individual experience ratings.
  • Rate Assignment:
    • All employers pay the same Social Cost Tax rate, although the actual dollar amount paid depends on the taxable payroll of the employer.
    • This rate is determined annually by the Employment Security Department (ESD) and is based on the total social costs of the previous year.
  • Who Pays?
    • Employers only pay this tax, as employees do not contribute to UI funding in Washington.
  • Collection:
    • The Social Cost Tax is collected along with the Experience-Rated Tax, as part of the total UI tax rate. Both are reported and paid quarterly.
How Rates Are Collected
    1. Total UI Tax Rate
:
  • The total UI tax rate for an employer is the sum of
    • Their experience-related tax rates.
    • Social Cost Tax rate.

    2.  Collection Process:
  • Employers report their taxable payroll to the Washington Employment Security Department (ESD) each quarter.
  • Taxes are calculated based on the taxable wages of each employee up to the taxable wage base for the year (e.g., $76,500 in 2024).
  • Employers pay the combined total (experience-related tax + social cost tax) as part of their quarterly UI tax payments.
 
Summary
  • Experience-Rated Tax: Customized for each employer based on their layoff history; incentivizes workforce stability.
  • Social Cost Tax: A shared cost among all employers to cover UI benefits that are not directly attributed to specific businesses.
  • Both taxes are essential for funding the UI program, ensuring that benefits are available for workers, while balancing fairness for employers.
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City of Kennewick Splash Pad Grand Opening & Ribbon Cutting

6/2/2025

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Congratulations to the City of Kennewick on the grand opening and ribbon cutting for the new splash pad at Kenneth Serier Pool! Check out the new water playground for yourself at 315 W. 6th Ave. in Kennewick.
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Gallery - Legislative Session Wrap-Up Membership Luncheon 2025

6/2/2025

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Thank you to everyone who attended the Regional Chamber's Legislative Session Wrap-Up Membership Luncheon on Wednesday, May 28! Our guest presenters - 8th District Sen. Matt Boehnke, 14th District Rep. Deb Manjarrez, 15th District Sen. Nikki Torres, and 16th District Rep. Mark Klicker - shared updates on the latest laws and pivotal changes from the recent legislative session. 
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Highstreet Insurance & Financial Services Ribbon Cutting

6/2/2025

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Congratulations to Highstreet Insurance & Financial Services on their ribbon cutting on Wednesday, May 28! Check out their beautiful location at 6816 W. Rio Grande Ave., Ste. 120 in Kennewick.
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Copyright © Tri-City Regional Chamber of Commerce. All rights reserved.
7130 W Grandridge Blvd., Suite C, Kennewick, WA 99336 USA
Phone: (509) 736-0510
[email protected]
Hours
Monday - Thursday: 8 am - 5 pm
​(closed for lunch 12 - 1 pm)
​Friday: 8 am - 12 pm
​Closed Weekends

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  • MEMBERSHIP
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