One of the gray linings in the silver cloud that is cheap gasoline is a significant loss of revenue for a fund that since it was created by state voters in 1988 has helped to clean up thousands of sites contaminated by hazardous waste.
The Model Toxics Control Act, or MTCA, imposes a tax of 70 cents per $100 of imported chemicals, money that is intended to pay for cleanup projects and other work that prevents pollution. Last year, when the Legislature passed the two-year budget, the forecast was that the tax would bring in $324 million for the fund. But that was when we were paying about $2.60 a gallon for gas and prices were rising. By June, the price of gas, along with the price of oil, fell steadily. The result: Along with your $1.79-a-gallon fill-up, the cleanup fund is expected to rake in about $90 million less than projected.
That has some — environmentalists as well as local governments — concerned about the ability of the fund to pay for projects that protect the environment, our water and public health, and promote economic development at cleanup sites, as was reported last week by InvestigateWest’s Robert McClure in Crosscut.
Senate Bill 6660 looks to restore some of that funding, by increasing the tax to 90 cents for the same $100 worth of chemicals, but only when the revenue collected for the fund drops below $175 million in a calendar year. The tax rate would return to 70 cents when the revenue collected exceeds $220 million.
The petroleum industry, McClure reports, objects to the tax increase and complains that the fund is not always used for its intended purpose, some of it diverted for soil remediation, reducing diesel pollution, beverage recycling at sports events and even Christmas tree recycling.
That’s a fair point. There’s nothing wrong with recycling programs, but that wasn’t what voters were seeking in 1988 when they passed Initiative 97. However, the industry focuses its criticism too narrowly when it objects to projects that clean up pollutants from stormwater or MTCA’s public participation grant program that ensures that the public has a say in how sites are cleaned up. Those promoting Initiative 97 had aims for protecting drinking water and the environment, so some flexibility in the fund’s uses respects the voters’ intent.
But it definitely wasn’t the voters’ intent for the MTCA to become a slush fund for lawmakers. During the recession, the Legislature, then in Democratic control, watched the fund grow fat when gasoline prices were nearing $4 a gallon, then diverted about $250 million, McClure writes, to the state’s general fund and also used it to pay for agency salaries that normally are paid out of the general fund.
While Republicans object now, as late as 2013 some sought to expand what the fund paid for when reforms to the act were proposed. MTCA’s pot isn’t the only fund to be raided by legislators looking for easy ways to fill budget holes. The state’s Public Works Trust Fund, which is intended to provide local governments with low-interest loans for road work and other public works, has repeatedly been siphoned off. A proposal to restore $10 million to the fund this session that was sucked up earlier failed to get the 60 percent majority it needed to pass.
The tax increase proposed for MTCA is reasonably structured and looks to address the volatility of gas prices, returning the tax to its original rate when the $220 million ceiling is hit. But it’s not clear if the bill will advance. Legislation that would have more clearly reserved the cleanup fund for those specific projects also isn’t expected to advance but may be included as part of the budget negotiations between Senate and House.
Even if there’s justification for the cleanup fund’s tax increase, it’s not OK to tax Peter so you can rob him later to pay Paul.
