A state coalition of environmental groups along with cities and counties say they’ll continue to fight for increased funding for water quality protection projects after the House Finance Committee nearly gutted a proposal to increase such revenues.
House Finance Committee members, based on proposed amendments from Rep. Larry Springer, D-Kirkland, reduced the House Bill 3181′s proposed increase to 2 percent increase to the state Hazardous Substance Tax — from the current .7 percent it’s been at since its inception — to a .4 percent over four years.
The bill also no longer diverts any money to the general fund and exempts any products sold out of state.
The pricetag of the bill? About $10 million. Down from $225 million that, after 2015, would have gone directly to water quality projects and other environmental protection work.
“The bottom line is it just doesn’t get the job done,” said Brendon Cechovic, Washington Conservation Voters program director.
Read my previous stories on this topic here and right here.
The Washington Environmental Council this morning put out a press release raising concerns about the changes, too. You can see that press release at the bottom of this post.
Cechovic said the point of the $225 million was that, while initially helping to provide a stop gap to the general fund’s $2.8 billion deficit, the money would in years to come significantly increase the pool of funding for local governments, who have hundreds of millions of dollars in state- and federally-mandated water projects to undertake.
Over at PubliCola, Josh Feit says that the environmental coalition wasn’t simply offering up that general fund revenue as carrot to lawmakers seeking revenue streams, they also were hoping the cash would help pay for water quality and monitoring, watershed planning and air quality services that have already been slashed from the state budget.
I have a call in, too, to the refinery manager at the Anacortes Tesoro refinery. Representatives from that refinery had argued against the legislation largely saying it was unfair because much of their product is sent out of state. That appears to be the reason why out-of-state sales were exempted in the amendments. Refinery Manager Don Sorensen was unavailable today but will try to call me back tomorrow, I was told by Tesoro staff.
Many local legislators from the Bellingham City Council and Whatcom County Council, also, had been opposed to the legislation because of the diversion of funds. The Bellingham City Council, while supporting the increase, asked state lawmakers to not divert any money to the general fund. The County Council approved a resolution against the ordinance, pointing out the diversion as well as the impact to Whatcom County’s refineries.
Companion legislation in the state Senate, however, has not been amended in the same way the House version has.
Here is the Washington Environmental Council’s press release on the House amendment:
Olympia, WA - A broad coalition of environmental groups, labor organizations, cities, and counties today called for stronger action by the legislature for clean water. Often cited as our state’s biggest water pollution problem, millions of gallons of toxic stormwater wash directly into our lakes, rivers, and Puget Sound each year.
HB 3181 passed out of the House Finance Committee March 1 with an amendment that significantly lowers the funding dedicated to stormwater cleanup. The original included $70 million/year the first year, ramping up to over $225 million/year in 5 years. The amended version proposes only $10 million/year in the first year, increasing to $45 million/year over a period of 4 years.
“While we believe that this is a good start, it does not even come close to matching the problem of stormwater pollution,” said Kurt Fritts, Executive Director of Washington Conservation Voters. “We’re counting on lawmakers to hold firm against the oil industry and do what’s right for the people of Washington. That means funding this at a level that keeps our families safe and our water clean.”
The national oil lobby has intervened in our state to thwart our efforts to provide clean water and jobs, any efforts that fall under the “polluter pays” umbrella.
The “Clean Water Act of 2010” (HB 3181/ SB 6851) is an increase of the existing Hazardous Substance tax levied on over 8,000 toxic pollutants. It was introduced February 9 with 24 Senate co-sponsors and 35 House co-sponsors. Governor Gregoire has made this legislation a priority, including it in her revenue package. In a Feb 24 telephone town hall with over 5,000 environmental advocates, Governor Gregoire said that “now is the time for us to step up responsibly and get the Senate and the House to pass this bill. A day later isn’t going to do it for our children or for us.”
This Clean Water Act of 2010 is prime-sponsored by Rep. Timm Ormsby (Spokane) and Sen. Ed Murray (Seattle). Supporters of this proposal include Governor Christine Gregoire, the Environmental Priorities Coalition, Association of Washington Cities, Washington State Association of Counties, Washington State Labor Council, and Washington State Building and Construction Trades Council.
March 2nd, 2010 at 5:20 PM
The tax is $11 million in the first year and jumps to about $70 for the next two year budget cycle. 83% of this tax is on the oil industry and the rest applies to other groups such as farmers.
Doug Ericksen 360-786-7980
March 2nd, 2010 at 6:59 PM
Rep. Ericksen,
If you have better suggestions for funding these water quality and environmental projects, I’d sure like to hear them. Or, perhaps, I have misinterpreted your previous objections to this tax. Maybe, you are opposed to these projects, regardless of how they might be funded. I checked your website, but I was unable to find a position statement on these water quality projects. Hopefully, you will be kind enough to clarify your position on these issues for Herald readers.
March 3rd, 2010 at 7:10 AM
Doug:
Using an old Reagan line, “THERE YOU GO AGAIN” Where is your idea on helping these cities fund stormwater projects? Clean the oil off your hands and help us out a little bit will you!!!!!
March 3rd, 2010 at 7:41 AM
Read the headlines of today’s paper, Unemployment is going thru the roof!
This type of legislation is a job killer; more taxes today is about the most stupid thing anyone can advocate!
AFY!!theheelotsheepdog!!!
March 3rd, 2010 at 9:43 AM
Thanks for the comments. I support using the exisiting MTCA tax for the projects that you list. In the past 2 years the Democrat budgets have taken over $180 million out of the MTCA account and moved it to the general fund. We can also help these cities with state rules and regulations that drive up the costs.
Doug Ericksen 360-786-7980
March 3rd, 2010 at 10:17 AM
Let me get this straight, with this new amendment, water projects would actually receive more funding than they have in the past because it bars state government from raiding the account for general fund purposes meanwhile it lowers the overall cost of doing business in the state? Good for jobs, good for the environment, seems like a win, win.
March 3rd, 2010 at 11:02 AM
No. This bill does prevent taking the existing MTCA tax for general fund purposes. This bill does not lower the cost of doing business, it will raise the cost of doing business by raising taxes on a primary energy source.
March 3rd, 2010 at 12:06 PM
Doug, I’m talking about the amendment being proposed to the bill. The post mentioned that the amendment would “lower the Hazardous Substance Tax from .7 to .4 percent over the next two years” as well as “no longer diverts any money to the general fund” and “exempt any products sold out of state”. Those all seem like improvements to me.
March 3rd, 2010 at 12:20 PM
Hmm, I was under the distinct impression that the existing MTCA tax was insufficient to fund these projects. Is that not correct?
March 3rd, 2010 at 1:11 PM
Todd - the current MTCA is used much more for super-fund-type projects. Now, they’re creating a new fund that will help deal with water quality projects, and hope to use the Hazardous Substance Tax within the MTCA as a way to increase that funding.
March 3rd, 2010 at 1:44 PM
Thanks Sam, that helps a lot.
March 3rd, 2010 at 4:15 PM
So interesting to read these comments. The MTCA has not been used in the past few years for super-fund-type projects. The MTCA has been diverted to the general fund. The MTCA is not being decreased from a .7 to .4% B&O tax, the amendment would increase the tax from .7 to 1.1%
March 3rd, 2010 at 4:33 PM
The Whatcom Waterway cleanup is MTCA-funded to the tune of about $25 million. That would seem to me to be a ‘Superfund-type clean-up’ as Sam Taylor was describing. Bellingham is also looking for MTCA funds for the RG Haley site, the GP uplands cleanups, and a couple of smaller contamination sites in the City. The new revenues would provide, in the long term, critically needed funds for these types of projects as well as for stormwater management by cities and counties. Those projects are currently being left undone due to a lack of resources.
While the propsed legislation is far from perfect, I would appreciate seeing a concrete alternative for funding, as opposed to a blanket rejection without provision of a meaningful alternative. In addition, I’ve found in conversations with other cities around the state, most seem to have plans on the shelf ready to implement if funds become available. This is meaningful in that addressing stormwater management would not only deal with state and federal environmental mandates, but would also quickly put people in the construction industry to work at a time of high unemployment. Furthermore, the work would be geographically distributed throughout Washington, so every part of the state would benefit.
March 3rd, 2010 at 4:44 PM
Dan, is the Whatcom Waterway a super-fund site or is it Puget Sound clean up? The real issue is better use of the existing tax dollars already being taken from the people. We lost GP in Bellingham. ALCOA is at risk. BP and CP could move refining activities to other areas. It is time to stand up for good jobs in Whatcom County. Public works jobs can only be created if we have private industries operating and paying taxes. We need to stand up for good private sector jobs and keep them in our area.
March 3rd, 2010 at 4:54 PM
Sam, could you correct this post to say that this amendment would increase the MTCA rate .4 % from the existing .7 to 1.1. I was surprised to read that we were going from a proposed 2% increase to a .3% decrease but I assumed that if we did so and yet were sincere about using the funds as intended instead of dumping them into the general fund that it might still be a net increase in actual funding for these projects. My bad.
I’d be curious to know what percentage of the MTCA tax collected in recent years has actually gone to projects versus diverted to the general fund. Doug mentions that over $180 million has been diverted out of this fund in the past two years, according to Dan Pike’s information that’s the equivelent of 7 Whatcom Waterway cleanup projects!
March 3rd, 2010 at 5:03 PM
Doug,
It is a superfund-type cleanup, meaning that it is a cleanup of toxic contaminats of the type targeted by the federal superfund legislation. Obviously it is not superfund cleanup in the technical sense, because in that case the feds would be underwriting the cost through the CERCLA funding, the federal equivalent of Washington’s MTCA. The enabling legislation for both programs relies on assessments against the petroleum and chemical industries, which seems appropriate given the superfund-type cleanups overwhelmingly involve products of these industries.
As I stated in my original blog post on this subject, the proposed legislation is far from perfect. The viability of Tesoro refinery in Anacortes in particular is potentially threatened, and with it the jobs and tax revenue it generates in the regional economy. I would like to see better legislation, recognizing that there are two problems here: currently unaddressed environmental damage to our communities and region, and the also vital need to maintain our local, regional and state economies. I know that Senator Ranker, for one, is working diligently to craft a solution that better addresses both issues, rather than simply supporting one at the expense of the other. My preference is that policy makers work to promote positive, superior solutions rather than simply being deniers of solutions they deem inferior.
March 3rd, 2010 at 5:51 PM
Thank you to Mayor Pike and Rep. Ericksen for an informative exchange!
March 3rd, 2010 at 6:22 PM
The companies impacted by this tax are the refiners. They are multinational corporations with investments all over the world.
I don’t have any connection to anyone who works for any of those companies.
A sentence in one of Doug Erickson’s posts struck me: “Thanks for the comments. I support using the exisiting MTCA tax for the projects that you list. In the past 2 years the Democrat budgets have taken over $180 million out of the MTCA account and moved it to the general fund…”
The guys who run those corporations are not idiots.
I imagine that they look at the menu of choices available to them, and I think that they see a regulatory climate here that is inimical to their interests. When they look at a world of investment opportunities, ranked by required capital, conformance with long term plans, rate of return on capital invested, and the political and regulatory environment in the jurisdiction in which the investment is to be made they see reduced rates of return and increased regulartory interference.
It is likely that the investment, together with the employment and tax revenue that flow from it, will go elsewhere first, or perhaps forever.
It’s happened here before, hasn’t it?
Refiners’ profit margins are tight. It’s entirely possible that declining consumption in the recession would result in sufficiently decrreased demand that one refiner might shut down.
This tax won’t have anything to do with that decision, will it?
Certainly not.
March 4th, 2010 at 11:11 AM
Bellinghammer - I just reread my explanation of the increase and I’m sorry it was so horrendously ugly in its explanation. I tried to fix it using my normal strikeout and bolding method, but I’m not sure if this is better or not. Please let me know.
So let’s recap to be clear:
The Hazardous Substance Tax is currently .7 percent.
The initial proposal would have raised that tax to 2 percent (a total increase of 1.3 percent).
The amendment changes the bill to increase the tax by .1 percent each year for four years for a total .4 percent increase. That would bring the Hazardous Substance Tax to 1.1 percent within four years.
March 4th, 2010 at 11:13 AM
Seriously, Todd, this is a great exchange between our local elected officials, and I very much appreciate their participation here!
March 4th, 2010 at 11:51 AM
Ya, me too! It’s always nice to hear from our elected leaders.
March 9th, 2010 at 11:23 AM
I think that we should consider the long term affects of this tax, my family depends on my income from refining. I am not a higher up or corporate employee, I am a hourly employee which will be the first to be effected by this tax. I highly doubt the refineries in the area are going to keep doing business at a large scale if this tax goes through. Hundreds if not thousands of families will be effected, this is including the hundreds of local contractor companies that services are utilized by refining business. We are in an economic crisis that I do agree but this tax is going to magnify it tenfold. Already I hear of employees putting their resumes out to other states just planning for worst case, if you thing our economy in WA is bad now let’s see what happens when unemployment sky rockets and people stop putting money into Washington State’s economy. I have been born and raised in WA, my family settled parts of the county I do not want to move my new family (We just had a beautiful baby girl) out of the state because we could not come up with a reasonable way to fix a deficit problem that we as residents did not have any part in sky rocketing. I am a former active duty US Marine and I have served my country with honor, what this country is doing to its working class Americans is inexcusable and we should all be ashamed for letting it happen. In closing if we wish to fix the deficit let’s start with those who spend the money and ask them to make the cuts not education, not law enforcement, not the people but instead those who are in control of the money and who I am sure live just a little more extravagantly than they really need to.