Raiding Washington’s toxic cleanup fund

raiding-money

A state Department of Ecology account intended to fund the cleanup of orphan hazardous sites in Washington is projected to have a $69 million shortfall this biennium due to numerous raids of the account by the legislature and reallocation of the funds.

In its 2018 supplemental budget request, Ecology admits that without additional funding, many projects could be delayed. That deficit is likely to be presented during the upcoming session by proponents of an increased tax rate – a tax which has remained the same since its inception and primarily hits petroleum companies.

However, rate-hike proponents may want to find out how much of this revenue is actually going to benefit orphan sites. Known as The Model Toxic Control Act (MTCA) fund, it is primarily filled by revenue generated by the Hazardous Substance Tax (HST) a .7 percent tax on the wholesale value of first possession of hazardous substances in Washington. The tax was set up after Washington voters approved Initiative 97 in 1988. Ecology says it has identified 12,500 confirmed or suspected contaminated sites in Washington.

Since the tax’s inception, it has generated $2.6 billion for the state. Yet Ecology says it doesn’t track how much of that money has actually been spent on orphan sites compared to other uses, such as plugging state budget gaps.

Although revenue from the tax is down from its highest level five years ago, the amount of money pouring into the account is still many times above the amount collected before oil prices began spiking in the mid-2000s. It was around that time that the funds were allocated to other uses, followed by outright raids by the state legislature to plug operating budget gaps.

According to the Secretary of State’s 1988 voter’s pamphlet, the statement in favor of I-97 says that it “is the stronger toxic cleanup program which will make our environment cleaner and safer, for today and tomorrow, for our children and grandchildren.”

At first, the fund generated a modest amount, less than $20 million. That figure remained relatively stable until 2004, when oil prices spiked. Revenue doubled by 2008, and by 2012 it was raking in $200 million annually. In 2007, the legislature began dipping into the account to pay for stormwater projects. In total, $300 million of MCTA money has been spent on such projects in the last decade, and an additional $113 million in stormwater projects are scheduled to start during the 2017-19 biennium.

The continual raids into the account is something Ecology notes in its supplemental budget request among the reasons for the shortfall.

Since the 2007-09 biennium, the MCTA has been stuck permanently covering the tab for $75 million worth of state spending previously covered by the General Fund-State, most of that within Ecology itself.

MTCA appropriations have also expanded to 11 agencies from just five in 2003-05. In the 2015-17 biennial budget, these diversions represented $54 million of the reported $78 million “shortfall” in the fund and include:

  • Department of Ecology overhead and other non-clean-up programming;
  • Forest practices regulation at Department of Natural Resources;
  • Fish hatchery water control at Department of Fish and Wildlife; and
  • Technical Assistance to local governments on growth management.

So how much of the tax revenue actually has been spent to clean up sites?

A public records request found that Ecology doesn’t track that data. The agency’s only estimate is based on two programs started in the 2000s, the Cleanup Toxic Sites Puget Sound in the 2005-07 biennium, and the Eastern Washington Cleanup Sites Initiative in the 2011-13 biennium.

The total spent on those programs: $87.7 million. Also, the programs only partially focus on orphan sites, according to Ecology.

One lawmaker trying to prioritize the tax’s spending on its intended use is Sen. Doug Ericksen (R-42), the former chair of the Energy, Environment & Telecommunications Committee. In 2016, he introduced SB 6570, which would have prioritized fully funding the cleanup of toxic sites by postponing other projects. It got through to Ways & Means but failed to advance, and with Democrats now in control of the Senate, odds are low that any new push will gain traction.

During a public hearing for the bill, lobbyist Greg Hanon for Western States Petroleum Association said that only a quarter of the tax’s revenue has been spent on toxic site cleanup.

In a statement, Ericksen told Lens that “For years the Department of Ecology has wasted the Hazardous Substance Tax on everything except cleaning up contaminated sites. We took major steps in the past few years to start correcting the problem and actually clean up our environment faster, better and more economically by putting these tax dollars towards real projects.

“It is time to stop waging war on the energy that creates jobs and allows us the freedoms we enjoy,” he wrote further. “It is time to wage war on big government bureaucracies that waste our tax dollars, limit our freedoms, and do nothing to protect our environment.”

But the problem is more than just following the money spent, says Todd Myers, Washington Policy Center’s environmental director. In an email, he wrote: “This is a common problem with environmental expenditure – simply spending the money is the goal, not tracking results or effectiveness.

“We are often told that state agencies are the only ones who can protect us from environmental harm, but it is increasingly clear that the process is more important than the environment,” he wrote further. “The reason agencies don’t track this data is that such data would make it easier to hold them accountable for failure.”

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