Gov. Chris Gregoire is asking state lawmakers to approve a $1.50-per-barrel charge on oil products from Washington state refineries, to raise billions for operation and maintenance of the state transportation system.
At the Tacoma News-Tribune, Jordan Schrader has a report.
Much of the state’s transportation budget now comes from taxes on gasoline at the pump. Any increase in that tax is immediately visible to state residents. By adding a charge on fuel at the refinery, instead of raising the taxes on gasoline, the impact on the taxpayer would be far less visible. But we can only assume that the money collected at the refinery will be factored into the price we pay at the pump.
(Still to be determined is whether Gregoire’s proposed revenue-raiser is legally a “tax” or a “fee.” If it is a “fee,” it can be imposed by a simple majority of legislators. Schrader explains that.)
The state is already taxing crude oil products (and other potential pollutants) in the state, in order to fund a voter-mandated toxic cleanup program that the Port of Bellingham is tapping to help clean up the tainted pulp mill site on the waterfront. (The state is also tapping that money for other purposes to cover its revenue shortfalls, but that’s another topic. Or is it?)
What do you think? Is it better for the state to raise transportation money at the pump, or at the refinery?
As much as half the output from state refineries (including two in Whatcom County) is sold outside the state. People who buy Washington-origin gasoline without ever using the Washington state transportation system will be the biggest losers, I suppose.
But Bill Kidd, spokesman for the BP Cherry Point refinery in Whatcom County, argues that this state’s refiners are competing for market share outside the state, and competitive pressures may keep them from passing the full cost of any new state charges on to the rest of us.
“Historically, we have not opposed gas taxes at the pump,” Kidd said. “I don’t see any industry clamoring to have a huge new tax put on them that they may not be able to pass along.”
Kidd estimated that Gregoire’s proposal would cost BP about $100 million per year.
BP reported $5 billion in net income in the 3rd quarter of 2011. The company is investing $400 million in a refinery upgrade here to enable the production of lower-sulfur diesel fuel, as the law requires.
I have also contacted spokesmen for the ConocoPhillips refinery, as well as the Western States Petroleum Association, for their viewpoint. What’s yours?