OLYMPIA - A tax increase on hazardous materials to pay for stormwater pollution cleanup and help bail out the state budget drew a divisive, partisan response Wednesday in the state House Budget Committee.
A coalition of environmental groups, local governments, labor representatives and Democrats hailed the Clean Water Act of 2010 as a first and important step in tackling the No. 1 pollution source in Puget Sound.
“If we don’t deal with stormwater, we won’t be able to rescue Puget Sound,” said David Dicks, executive director of the Puget Sound Partnership, the state agency that oversees Puget Sound cleanup.
The measure, which would nearly triple the tax rate on hazardous substances from 0.7 percent to 2 percent, drew stiff opposition from anti-tax Republicans, big-business interests and oil refinery workers who added to the overflow hearing room crowd.
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“This is an unfair, increased tax burden on our company,” said Brent Powers, a 23-year employee of the Anacortes-based Tesero Corp. oil refinery, which he said lost $149 million last year.
The bill serves two masters: In the first three years, 69 percent of the additional $225 million raised by the tax each year would go to the state general fund to help reduce the budget shortfall. The measure is included in the tax package Gov. Chris Gregoire rolled out Wednesday to help balance the state budget.
By 2016, all the money would be earmarked for local government stormwater projects, state Department of Transportation highway runoff controls and oil-spill-prevention programs.
To keep raiding the account to pay for other state services, the Legislature would have to rewrite the law.
Several Republican legislators pointed out that the 2009-11 budget approved last year by Democrats siphoned more than $180 million from the toxics cleanup account to patch holes in the state general fund. Gregoire’s supplemental budget would grab $80 million more.
Wednesday marked the first hearing on the controversial House Bill 3181. A companion measure, Senate Bill 6851, has yet to be heard.
Supporters also touted the bill as a way to put people to work on stormwater-control projects, putting a dent in the 27 percent unemployment rate that the construction industry faces.
The bill would create 1,100 construction jobs a year for the next five years, said Dave Johnson of the Washington State Building and Trades Council.
But the oil refinery workers said those jobs could be at their expense.
“If the tax is tripled to bail out the general fund, then it becomes almost impossible to compete in the global market,” said Jeff Pitzer, manager of the BP oil refinery at Cherry Point in Whatcom County. “It’s a job-killing proposal.”
Representatives of the oil refineries said they would go out of business when the original hazardous-materials tax was approved 20 years ago, but that didn’t happen, noted Mo Mc-Broom of the Washington Environmental Council.
“This bill is a balanced, smart approach,” McBroom said. “It’s about jobs, tax relief to fund education and social services, and clean water.”
Drivers would feel the effect of the tax at the gasoline pump, oil industry officials say. They estimate that gasoline prices would increase by 3 to 4 cents a gallon.
Local governments need the extra revenue to meet federal requirements to capture and treat stormwater, which is rainfall that collects contaminants such as pesticides, oil products, fertilizers and animal waste as it runs across the land, roads and paved surfaces before emptying into water bodies.
Stormwater retrofit work in King and Pierce counties alone is pegged at $850 million, Dicks said.
An ongoing state Department of Ecology study estimates that the amount of petroleum products reaching Puget Sound via stormwater is between 8 million pounds and 55 million pounds a year.
John Dodge: 360-754-5444