TAX NEWS - JUNE 2010

U.S. Tax: Spill outrage could fuel Washington state anti-pollution tax

01 June 2010 -- The Gulf of Mexico oil disaster has spurred planning by Democratic leaders in Olympia to increase taxes on oil companies to pay for preventing oil spills and toxic runoff in the state's waters.

The proposed tax — which could be similar to one that died earlier this year in the face of heavy lobbying by the oil industry — would make up for a 43 percent funding decline in the state's oil spill prevention program since 2006.

Proponents of the tax say public furor over the oil spill off Louisiana's coast has changed the political climate.

"I think it's a huge opportunity," said Rep. Dave Upthegrove, D-SeaTac, chairman of the House Ecology and Parks Committee. "It's unfortunate it takes a tragedy to spur action sometimes."

His committee discussed a tax increase on oil companies, and possible regulatory changes, at a May 24 meeting that included Dale Jensen, director of the state's oil spill prevention and preparedness program.

"Some form of it will be introduced, in some way, shape or form," Upthegrove said.

To boost spill response and stem storm-water pollution, House Bill 3181 considered last year would have more than doubled a tax on "hazardous substances" including petroleum — from 0.7 cents to 2 cents per $1,000 of the material. But oil industry lobbying was so intense that the measure never went to the floor for a vote.

Now, advocates say, the oil industry may have less traction with legislators, and with voters.