Maritime safety tax misses the mark

by Don C. Brunell
President, Association of
Washington Business

When lawmakers are in a hurry to solve a problem, they sometimes miss the mark. Moreover, if there is an opportunity to tax the big guys, why pass it up?
That seems to be the case in Olympia, where state legislators are considering HB 1488, a bill that would implement many recommendations of the governors Oil Spill Advisory Council.
It sounds reasonable, until you look a little closer.
HB 1488 would increase taxes on oil refineries that produce gasoline, diesel, motor oil and lubricants to fund the maritime safety improvements recommended by OSAC. But while the tax is touted as a tax on big business, it is actually a hidden tax on consumers because, as legislators well know, you and I always pay in the end.
Gas prices at the pump are once again hovering around $3 a gallon and adding to the cost of producing fuel will hit us directly in the pocket. Higher costs for fuel, oil and lubricants mean higher prices for commuters, farmers and anything thats shipped by truck which is virtually everything.
If lawmakers think theyre only taxing the oil industry to pay for the OSAC recommendations, they need to think again. Given the price of gas and voter sensitivity to taxes, theyd better have a pretty darn good reason for causing the price of gas, diesel, motor oil and lubricants to go up again. They dont.
For example, one of OSACs recommendations is to remove derelict boats and ships that are rusting and rotting along our shores or anchored in protected waters. But HB 1488 asks transportation fuel consumers to pick up the costs for removing these vessels, which are primarily recreational and fishing boats. Theres no doubt these should be removed, but those who created the problem should pay the costs, not you and me.
OSAC also recommends stationing an extreme weather tug at Neah Bay, presumably to assist oil tankers. Again, at first blush, this sounds like a great idea.
However, there are only three U.S.-flagged tugs in the country that meet OSACs specifications, and all of them are currently committed to restoration efforts on the storm-ravaged Gulf Coast.
Theres also the cost to consider. The current tug stationed in Neah Bay costs $8,500 a day. The proposed extreme weather tug could cost as much as $70,000 a day. According to the Department of Energy, a similar tug was recently chartered in the North Sea for three years at a cost of $41 million. Whats more, these tugs require a draft that is too deep to fit into the port at Neah Bay.
Finally, HB 1488 would triple the budget of the Oil Spill Advisory Council by increasing taxes on the oil industry. But OSACs own report reveals that the lions share of oil spills in our waters arent from oil tankers theyre from fishing vessels, recreational boaters, rail cars and trucks. For example, from 1998 to 2005, oil tankers spilled 623 gallons, while recreational boaters spilled 4,650 gallons. Trucks spilled almost 132,500 gallons.
Instead of picking an easy target, lawmakers should focus on whos really causing the problem.
Gov. Gregoire plans to convene an oil spill summit to bring all parties to the table including the U.S. Coast Guard, the Department of Ecology, OSAC and shippers to discuss our needs and how to pay for them. Thats a good idea, and there needs to be a nexus between taxes and benefits. In other words, those who benefit or caused the problem should pay to fix it.
There is always room for improvement, especially when the issue is protecting Puget Sound. But lets make sure the solution is well thought out, fair and cost effective.

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