SB 5993, introduced by Sen. David Frockt (D–Seattle) as part of the budget proposal released last week, would transition the state Hazardous Substance Tax (HST) from a value-based tax to a volume-based tax.
AWC testified in favor on March 27.
The HST is a tax on the first possession of hazardous substances in the state, of which oil pays the overwhelming majority. The result of the switch from value to volume is twofold. First, it will result in a revenue increase of roughly 60 percent—from approximately $375 million per biennium to approximately $600 million per biennium. Second, it would stabilize the account and would avoid the situation in recent years where falling oil prices left a large hole in the account and previously appropriated city projects were delayed due to lack of revenue. The proposal would also restructure the account, creating dedicated Operating, Capital, and Stormwater accounts. AWC has supported efforts to create a dedicated revenue stream for stormwater for many years.
The HST currently funds the State and Local Model Toxics Control Accounts and the Environmental Legacy Stewardship Account. These funds represent one of the key dedicated environmentally-focused accounts of the state. Collectively referred to as the Model Toxics Control Account (MTCA, pronounced ‘Mot-Ka’), these accounts fund critical city infrastructure such as stormwater retrofits, contaminated site cleanup, solid waste management, and more.
The MTCA accounts have rebounded from the depths of a few years ago; but in areas of stormwater and remedial action (cleanups), there is not enough money to fund the projects that are ready. This proposal is aimed at establishing sufficient tax revenue to meet the identified need for these purposes.
If you support this proposal, please contact your senators on the Ways & Means Committee and ask that they move this bill. SB 5993 has not yet been scheduled for a committee vote.