SEATTLE — In an effort to help fund $16.8 billion in transportation priorities, Democrats in the Washington Legislature are eyeing yet another shift in strategy.
Last week, members of the House abandoned a tax on fuel exported from Washington amid outcry from neighboring states. Members promised instead to tap into tax dollars destined for the state’s public-works account. But that proposal has run into staunch opposition from members of the board who control the account, as well as local officials who hoped to see the available pot of loan dollars for local projects grow.
Now legislators in the Senate are considering tapping into the state Department of Ecology’s Model Toxic Controls Act account, which is used to clean up and prevent spills and to improve stormwater runoff systems. The account is funded primarily through a tax on hazardous substances used in refineries and other operations that handle potentially environmentally damaging materials.
Under the current Senate proposal, the state would move 45% of the tax into the transportation package, said the chair of the Senate Transportation Committee, Sen. Marko Liias, D-Lynnwood.
Sen. David Frockt, D-Seattle, said legislators would not cut the department’s total budget, but would instead backfill any diverted tax dollars with money from the general fund.
“Effectively it’s just a transfer,” said Sen. Joe Nguyen, D-Seattle. “We’re very privileged to be in a space where we have options to consider, to fund this in a fiscally responsible way.”
Democratic lawmakers from both the House and the Senate spent Friday negotiating a path forward. Chair of the House Transportation Committee, Rep. Jake Fey, D-Tacoma, did not immediately respond to a request for comment.
Even before its official release, the new proposal is already receiving pushback from environmental groups. Clifford Traisman, lobbyist for the Washington Environmental Council, said they “loved” the original proposed tax on exported fuel, calling its death “unfortunate.”
Traisman said the Council fully supports passing a large transportation package this year, but is concerned that the nexus between the tax money for toxic controls and transportation is not strong enough. “You don’t want to be pitting cleanup funds with the other elements of the Move Ahead Washington program,” he said.
A group of pedestrian and environmental advocacy organizations has called on the Legislature to instead cut funding for state highway expansion projects.
The so-called Move Ahead Washington package would spend nearly $17 billion over the next 16 years. The package would invest around $7 billion on highway projects and maintenance, $3 billion on transit, $2.5 billion fixing the state’s fish culverts, and expand the state’s fleet of ferries, among a lengthy list of other priorities.
Unlike previous transportation measures, lawmakers have sought to avoid raising the state’s gas tax. Instead, the Democratic-led proposal leans heavily on revenue from a new carbon pricing system set to take effect next year, a onetime transfer of general fund dollars, federal funding and a host of increased fees.
The $2 billion in revenue was originally set to come from a tax on fuel refined in Washington and exported to neighboring states. But the backlash was severe and the House and Senate both agreed to drop it from the proposal.
To fill the gap, Fey proposed siphoning tax revenue away from the state’s public works account in future state budgets.
The proposal did not sit well with Kathryn Gardow, chair of the Washington Public Works Board.
“We are speaking louder than we probably have spoken before about the need for this funding and how vitally important it is for communities across the state,” she said.
The account was set up to provide low-interest loans to local governments for projects like renovating wastewater treatment facilities or installing new water mains. But lawmakers in recent years have diverted much of the fund’s tax revenue as part of the McCleary decision by the Washington Supreme Court, mandating more funding for K-12 public education in the state. As a result, the account could provide only $123 million worth of loans out of $255 million in qualified projects in the current two-year funding cycle.
Those diversions are set to expire in 2023.
Republicans in the Legislature have repeatedly proposed using taxes from the sale of motor vehicles to fund transportation projects into the future. Sen. Curtis King, R-Yakima, and Sen. John Braun, R-Centralia, proposed a larger $23 billion transportation package built around the sales tax earlier in the week. Democrats so far have not taken up their proposal.
Ranking member of the House Transportation Committee, Rep. Andrew Barkis, R-Olympia, said Friday he was privy only to rumors of what Democrats may propose.
“If there are negotiations going on, we’re still not part of them,” he said.