February 23, 2010 in City

Transportation panel opposes tax increase

By The Spokesman-Review
 

City Council endorses tax

The Spokane City Council voted Monday to endorse a higher state tax on toxic substances, hoping to help finance storm water treatment projects expected to cost the city more than $300 million dollars.

The state Legislature is considering raising a tax on toxic substances from 0.7 percent to 2 percent, an act labeled the “Clean Water Act of 2010.”

For the first year, the majority of the tax would be used by the state to help balance its budget.

Councilwoman Nancy McLaughlin, who cast the lone vote in opposition to the council’s endorsement, said the title of the legislation is “disingenuous” because little will be left over for cities to improve storm water systems. “I’d call it ‘The Irresponsible Plug-the-Gap Act of 2010,’” McLaughlin said.

But other council members noted that proposals under consideration by the state would gradually increase the percentage of the tax devoted to sewer projects, and even in the first year, the city would be guaranteed at least $75,000. In later years, they said, the tax could make a dent in proposed sewer rate increases.

Jonathan Brunt

OLYMPIA – Leaders of the Senate Transportation Committee added their voices Monday to the chorus opposing a tax increase that could add 3 cents to a gallon of gasoline.

A proposal called the “Clean Water Act of 2010,” which would nearly triple the Model Toxics Control Act first imposed by voters in 1988, is being requested by Gov. Chris Gregoire and co-sponsored by 23 Senate Democrats. But instead of dedicating all the money collected to pollution control, two-thirds would be sent to the general fund for the next year in an attempt to help fill a projected $2.8 billion gap between expected revenues and expenses. The amount shifted to the general fund would gradually decline to zero by 2015.

Sen. Mary Margaret Haugen, D-Camano Island and chairwoman of the Transportation Committee, said such a strategy would almost certainly trigger court action on whether it’s constitutional.

“I’m sure if it passes it will be challenged, there’s no doubt about that,” Haugen said as the committee announced the supplemental transportation budget. “It is, in essence, a 3 cent gas tax.”

Sen. Chris Marr, D-Spokane and the committee vice chairman, said increasing the tax on oil and other toxic substances to pay for storm water cleanup is the wrong approach. Although oil products do wash down storm drains and into streams, rivers and the Puget Sound, he favors a more direct charge on pollution discharged into the waterways.

Later Monday, the Senate Ways and Means Committee held a hearing on the tax proposal and attracted some of the same comments as a hearing last week in the House of Representatives.

Managers and workers from the state’s refining industry said the increase could devastate them because the oil wholesale business is very competitive. They could pass on the tax to drivers in Washington state, which would cut demand, but they probably can’t pass it on to the other half of their customers in the surrounding states. Oil companies could close Washington refineries in Anacortes in favor of more economical ones elsewhere, costing thousands of jobs in Skagit County.

Proponents of the tax included officials from cities who are under pressure from state and federal agencies to clean up their storm water systems, and building trades unions whose members hope to be put back to work by pollution control projects funded by the extra tax revenue. Nick Federici of the Low Income Housing Alliance discounted the argument that the state shouldn’t take some of the money for other programs during the current budget crisis, saying not every tax has a direct connection to the programs it helps support.

Democratic leaders in the Senate and the House will announce budget proposals today to lay out whether they want to raise the toxics tax or any other tax in an effort to cover part of the budget gap.

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