With political pressure from industries to “match” Boeing’s state tax preference package rippling through the 2014 Legislature, many on the left and right are asking larger structural and systemic questions: How much do Washington state taxpayers spend on tax preferences, how much financial value in tax preferences does a company receive, and how much do these companies actually pay in state taxes to put it all in context?
The uncomfortable reality is that we do not know how many tax dollars are being spent or not collected—because that information is, if assembled by the state Department of Revenue, almost completely inaccessible and hidden from legislators and the public.
The inside story gets worse: Under state law, for the vast majority of tax preferences, the basic information about what companies, organizations and industries receive how much money under most tax preferences is considered confidential and proprietary information and expressly hidden from legislators, media and the public.
As chair of the tax-writing Finance Committee, I am granted confidential access to the limited corporate tax information that is collected by the state.
This year, it has reached a point where the weight and moral hazard of this information burdens me, on a deep philosophical level, because I believe it is unethical for my colleagues to make fiduciary decisions about tax preferences–to draft bills, debate legislation and vote on behalf of the people–without knowing the true financial value or tax context of those preferences.
If I speak publicly about financial or technical details of who is claiming tax exemptions and how much they pay as a context to those dollars, I would face 90 days in jail, get ejected from the Washington State Legislature and be banned from holding public office for two years.
I’m not making this up. Telling the truth about this basic but vital tax data–even to other legislators–could cost me my elected position and land me in jail.
That’s because the strict interpretation of state law is that the chairs of the respective tax committees in the House and Senate are entitled to this important contextual tax data, but rank-and-file legislators are not. This means two of 147 legislators know the truth of how the money flows.
The old fashioned idea that the value of a tax preference must remain confidential is out of date and philosophically out of step with our state.
Since 1972 our state has been a national leader in public disclosure about who funds campaigns, how state budgets are written and how tax dollars are spent whether it’s the salary of a local elementary school teacher or how much a vendor is being paid to build a tunnel along the Seattle waterfront. A 2012 investigation by the widely respected Center for Public Integrity ranked Washington #3 of 50 states in its “Integrity Index” based on the strength of the disclosure laws when it comes to campaign financing, lobbying reporting, state budget process and public access to information.
However, in contrast to campaign data and budget expenditures–which can be searched on line down to the individual check on www.fiscal.wa.gov, the actual beneficiaries of tax preferences are public for just 32 of the state’s 650+ tax preferences, less than 5%, and the financial value of the value of the tax preferences claimed is public for only 19 categories–less than 3% of the total.
Last year, I partnered with Senate Majority Leader Sen. Rodney Tom (D-Medina), to shine a light on tax preference transparency through ESSB 5882 so the public can more effectively understand the scale and scope of the value of a tax preference created by the Legislature.
Under the new law, all new tax preferences must disclose the basic financial value of a tax preference at the individual firm level, so we can together assess whether there is a return on investment and better study whether a new tax preference achieves the policy goals established or is simply evaporating into the mist.
While this is true for new tax preferences, there are more than 650+ existing tax exemptions, credits and preferential rates on the books that cannot be easily analyzed in depth because the information is confidential or not reported at all.
Transparency and disclosure is a policy foundation that often unites limited-government and progressive think tanks, left and right, Democrats and Republicans. From the Sunlight Foundation to OpenSecrets.org examples, Washington has long embraced the right of the people to know how the money flows in and out of government.
This year, I have introduced a modest step forward in tax transparency legislation–House Bill 2201–that would: 1) consolidate and streamline the multiple annual reports and surveys from businesses into a single, easy to understand “Tax Accountability Report.” 2) Increase the availability, quality and consistency of tax preference data reported internally to the state Department of Revenue–including the value of the tax preferences. 3) Authorize the the public disclosure of certain tax information for publicly traded companies annually claiming one or more tax preferences in excess of $10,000, with a two year lag time to avoid any real-time competitive concerns. Publicly traded companies already provide much of this information at the national level through the Security and Exchange Commission.
How can a legislator realistically be expected to vote on a tax preference bill for a company or industry if she or he does not know the context of whether a tax proposal is small, massive or in-between relative to the overall tax obligation of that firm?
For example, under the state’s extracted fuel tax preference for the oil companies with refineries in Washington, the aggregate public value of this preference is $59 million between 2015-2017. There is no public disclosure, however, of how much British Petrolium, Shell, Tesoro and the other beneficiaries pay in taxes so it is literally impossible for legislators to know whether that $59 million is small, medium or large relative to their overall tax obligation. Given that I have introduced House Bill 2465 to close this tax preference, you can assume I feel strongly there is a painfully obvious answer to this question.
If a tax preference is working–and can make the business case to the public with solid data, facts and evidence as well as political support–we should keep it working to build our economy and quality job growth.
I am not opposed to tax preferences that work and add measurable value, but I struggle with the lack of intellectual, financial, political and analytical rigor applied to our state tax preferences. Specifically, I have stood firmly and publicly in support of tax preferences that can clearly prove with hard data—such as the Boeing package—that they achieve a compelling return on investment for taxpayers and our quality of life.
If a tax preference cannot justify its continued existence with data, metrics and facts and must retreat into brute lobbying force, then we should probably close the tax preference and instead invest those precious dollars into public education from early learning through K-12 and higher education.
The responsible next step is to pass HB 2201 and open the books in a careful, measured way and let citizens–and 147 legislators–know the truth of how the money flows.
Your partner in service,
The good folks of the 36th District are fully engaged, educated, deeply passionate and civically alive. In my five years in office I have attempted to be a thought leader in the use of online tools and social networking to give people an even stronger sense of connection to state government. Recently I distributed a constituent survey touching on a handful of key issues.
The response was simply overwhelming.
Within days, hundreds of people of had participated. Astoundingly, the current count is more than 400. And the respondents went way above and beyond, as nearly 87% wrote a long-form answer to spell out their thoughts on transportation, the Boeing package and/or their legislative concerns in the coming year. Thank you to everyone who participated. Thank you for graciously taking the time out of your busy lives to share your ideas, opinions and your concerns on some of the most important issues facing our state.
Statistically, the sample size is large enough to be relevant for the district. According to the 2010 census there are 133,901 people in the 36th. To lend some perspective, a sample size of 384 would be needed to achieve a 5% margin of error with a 95% confidence level. There may be some sampling bias because the responses came from my own list. And to be clear, this survey is not meant to be confused with a scientifically conducted, randomized poll. Nevertheless, many of the answers are overwhelming, and the nuance, detail and insight from the individual responses cannot be dismissed.
The 10-question survey was split into three parts: 1) Transportation 2) The Boeing Package and 3) 2014 Legislative Priorities. The graphs from the 7 multiple-choice questions are below, and the answers to the open-ended questions are bundled together as a PDF:
As legislative negotiators work tirelessly behind the scenes to seek common ground on a statewide transportation package, profoundly important philosohical questions are on the table. The tension in the air can be sensed over what strategic direction our state’s transportation system will take in the decades to come.
Will a modern, sophisticated, win-win grand bargain between the Republican-led Senate and Democratic-led House be achieved, or will our infrastructure continue to slide into mediocrity?
On a deep level, the questions are substantial: Will we continue down a traditional path of a restricted 18th Amendment (use of gas tax for roads and highways) instead of multi-modal uses? Will metropolitan strategies–from Bruce Katz author of The Metropolitan Revolution with smart cities, urban environmentalism, responsible growth, transit to city-oriented regionalism itself–find support from the business community and Republicans? Will the Senate Republican leadership provide the majority of votes to lead their chamber through the sweeping policy questions or simply expect a majority of Democrats to vote for taxes while Republicans vote ‘no’ yet quietly bargain for transportation spending in their own legislative districts? Will Seattle and King County voters, who for years have been net contributors of taxes to state government, reach a tipping point of frustration at cuts to local transit and deteriorating roads and support a “Plan B” or ‘King County-only’ approach? Will King, Snohomish and Pierce county residents take the initiative, for the first time in years, to think strategically about the post-modern infrastructure needs (ports, ferries, highways, transit, bike paths, stormwater, public waterfronts, etc.) as a Puget Sound region?
Recently I stopped by a major bus stop in my district to speak with Metro riders about the situation. After reviewing the policy background provided by Metro, and learning more about the current Senate proposal on the table, one rider said to me: “I’ve been thinking about this, let me get this straight, here’s the deal as I understand it: We raise our gas tax by 11.5 cents which, in turn, gets us the honor of voting for a new Motor Vehicle Excise Tax (MVET), and we cut spending on public schools–and environmental cleanup–all in exchange for ‘buying back’ our current level of bus services. Seems like a ridiculously bad deal to me. Let’s just raise fares and our own MVET and pay for our own services and at least keep the money here.”
The state’s thought leaders in the business community are fighting hard to find a compromise. They argue, rightly, that public infrastructure should maintain a special place in political discourse given how vital it is all a healthy and robust quality of life. And yet those same organizations led the charge to fully fund the business-backed candidate in a recent open state senate seat who is categorically opposed to new transportation taxes. It is difficult to reconcile those competing values.
Our old model of transportation funding and spending is ending. More than that, our radical addiction to decentralization of authority and allocation of resources based on yesterday more than tomorrow is unsustainable. The gas tax itself is, of course, imploding virtually before our eyes as vehicles become more fuel efficient, and competing over a declining resource is hard enough under the best of circumstances. Add to the mix the need for a bold approach at living the Metropolitan Revolution and it simply does not seem realistic to expect Seattle and King County voters–and others throughout Puget Sound–to enthusiastically embrace a stereotypically static model.
What would make sense?
Courageously stepping together into the 21st Century of transportation innovation.
Let’s take the risk of truly experimenting with new approaches such as opening the 18th Amendment to meet the transportation needs of communities; taxation of vehicle miles travelled (privacy remains a big issue); wide spread use of regional tolling and variable and usage-based systems; healthy funding of transit in well planned regionalism; exploration of an authentic carbon tax; meaningful reforms that go to the heart of the need for efficiencies and truly save money; more focus on maintenance and operations and repairs of our existing infrastructure rather than new ‘greenfield’ construction; and acknowledging what the data proves–that the Puget Sound is the heart and soul of our globally competitive infrastructure.
Let’s recognize that when you eviscerate the ability of start up companies to attract employees, students to get to universities, Boeing to transport aerospace parts, Microsoft to shuttle employees from Seattle to Redmond and more, you lose part of the soul of what makes Metropolitan thinking an authentic strategy. You lose the benefits of “Rise of the Creative Class,” and you lose affordability and social justice for those who are left behind.
None of this is to disrespect or disengage from our rural communities and their interests. None of this is to imply that all the resources should be redirected to the cities of Puget Sound. None of this is to disrespect our historical ‘social contract’ between Democrats and Republicans, urban and rural.
All of this is merely to elevate the dialogue toward regional thinking economically, socially, politically, environmentally and culturally and to recognize together that our old approach is ending not because we want it to but because the status quo is imploding. In a handful of years more than 75% of the world’s population will live in cities. We’re not ready. We are so much more than what we’ve become.
Your partner in service,
The political history of Washington’s struggle to design an intelligent tax structure reads like a Steinbeck novel–or a graduate school thesis. The fierce urgency of the radical, unstable politics of the 1930s united land-rich but cash-poor rural farmers–unable to pay heavy property taxes– with low-wage workers in the city to successfully push for a state income tax against the powerful financial interests generally in control of the politics. The electoral success was short lived due to court and political interventions, and the status of the most regressive system of taxation in the nation–50 out of 50 states–stands unmolested in the corner like an uncomfortable Civil War statue in the South.
Since the Washington Grange led our state into battle for a progressive income tax, the tide of history has washed over our collective consciousness about economics, elections and policies. It is as if the political subculture decided it was ‘too close for comfort’ and they had better rethink whether it is safe or wise to allow such coalitions because real change could happen.
How did the big tent coalition of activist small business, labor, organized poor rural farmers and city workers–that at one time seized control from both big business and big government–become but a dusty footnote in history books?
Perhaps one answer lies in the romance and mystique–authentically, powerfully and emotionally rooted in Jeffersonian history–that political support for ‘America’s family farms’ requires absolute fidelity to the notion that agriculture is a particularly special class of economic interests. The image of the multi-generational family farmer alone is sufficient to silence critics or prevent the dialogue from surfacing in polite company that perhaps we should modernize our approach. The wave of industrialization and urbanism that defines our nation since Alexander Hamilton and Thomas Jefferson first fought the intellectual battle is as if a dream when it comes to the mystique of the farmer.
And so, not without a rational basis in understanding politics we, like many states, have effectively and figuratively carved out most agricultural interests from paying any meaningful or measurable level of taxes in Washington.
The political pressure valve that represented at least 50% or more of that old coalition–the agricultural heartland of our state–was released.
Yet the story goes deeper. The structural challenge begins to grow as we reflect upon the fact that we as a state have also embraced these romantic notions of industry in the areas of timber, aerospace and key elements of information technology.
The pressure valve released further pressure.
Thus, whether we are comfortable acknowledging it or not, these four industries and elements of others of our economy–notably ‘services’ rather than ‘goods’–are essentially released from the standard taxation model. Many of the preferential tax exemptions, rates and credits in the state have the effect of carving our one or more of these industries to some extent.
I have long believed that the most effective tax structure is one that has low rates, broadly applied, with few exemptions, that can have the effect of ‘depoliticizing’ tax policy. Instead, we have the opposite: A highly politicized system that rewards powerful interests with the ability to seek exemptions.
Each and every year interests descend upon Olympia to seek additional tax exemptions, credits and rates because our current system does, in fact, punish many industries in economic inefficient ways. And so their ‘business case’ is strong when they ask for relief from the negative impacts and externalities of high sales taxes and high B&O rates.
But the ‘cost shift’ from those with the ability to be carved out to those unable to make the case grows year after year.
I maintain hope and genuine optimism in the sense that many traditional economists share a view that low rates, broadly applied with few exemptions has a better chance of mirroring our state’s economic growth and structure as it changes and evolves. The tipping point of pressure is nearing because we have so little room to continue to carve out additional industries. Those businesses and individuals who feel the impact of that cost shift are restless.
The political coalition of the 1930s that seized control of our state’s political discourse demanding equity and efficiency in our economic system imploded and exists no more.
Low wage, low skill, service-oriented workers in the city had no one to release the political pressure valve for them.
These workers in the service sector enjoy no such romantic image as high tech workers, aerospace employees or of course family farmers. There is no elevation of their unique role in history or society. Low wage, low skill service workers are the untouchables who seem in popular lore to offer less than they can contribute–despite the fact that so many in each generation are ambitious immigrants who work tirelessly to build a better life for their families.
Today, Washington stands alone atop the regressive pyramid with a wildly inefficient system of revenue that taxes goods not services and shifts the burden to small businesses and low income individuals without political might. It is not the fault of farmers, high tech workers, aerospace employees or timber workers that they have managed to carve themselves out of a full tax obligation as anyone would want to be a part of a better system.
But it is incumbent upon all of us to acknowledge that our system today is bad economics–and unjust social policy– because it shifts the burden to small business in politically weak industries and to the poorest of the poor individuals. It is unsustainable and, at some point, it will likely implode.
We are now in the bottom quartile in the nation in the per capita level of taxation in combined state and local taxes. Is that too high or low? It really is a question of whether we can build the level of public services our citizens require. So the more meaningful question is: Do we have the level of services and quality of life that we seek together?
I believe we are on the march toward being a low tax, low service, low quality of life state. The goal is not more taxes but a smarter system of taxation and revenue collection that accurately mirrors our 21st Century economy and does so in a socially just manner.
One day–perhaps soon and perhaps in many years to come–Washington will build a smarter tax structure that better maps to the 21st Century because it’s good economic policy.
The authentic answer: A modern, globally competitive structure that lowers rates, broadens the base, eliminates exemptions and depoliticizes our political system of carve-outs.
We are so much more than what we have become.
Your partner in service,
The maritime industry is among the most important (historical, current and future) economic clusters in Washington State’s economy.
Aside from the formal structure of the industry, there’s a more intangible, gentle and spiritual connection that most of us feel to the water. It’s part of our individual and collective stories.
This year, as chair of the Finance Committee, I grappled with a proposal from the Northwest Marine Trade Association, a well respected trade group, to extend the use tax for boats owned by a LLC or S Corporation–essentially mega yachts–from 60 to 180 days or perhaps longer. Serene, a 440-foot mega yacht, one of the world’s largest, owned by a Russian billionaire, is currently docked in my legislative district. Under current law, if she stays in our waters for longer than 60 days she would owe use tax on her full value. That is, as you can imagine, unlikely to occur and she can be expected to leave our waters before the state tax deadline. Under the trade group’s proposal, this ship and others like her could remain in Washington waters for 180 days or perhaps longer for repairs or merely to visit without incurring use taxes, a move that would certainly generate incremental economic activity into the local economy.
British Columbia, Florida and other governments have discovered the value of favorable tax treatment for these floating cities, despite a number of serious issues, flaws and controversies with larger tax avoidance given that S Corporations and LLCs based off-shore cannot be reached by federal and state auditors.
As committee chair, rather than push the legislation through Olympia this year I opted instead to insert specific language in the state budget–with supporting funding–for the Department of Commerce to conduct a comprehensive analysis of the broader range of major policy issues facing the maritime industry from taxes and regulation to workforce and facilities. Once that review is complete, I argued, we can more objectively assess whether it makes sense for Washington to eliminate the state tax and thus match BC’s tax code–and to in effect create a regional ‘economic cluster’ partnership–so that these large luxury ships can make the magical San Juan and Gulf Islands a common destination.
Rep. Kris Lytton (D-Anacortes) and Sen. Nick Harper (D-Everett), among the most effective and respected legislators in Olympia, penned a thoughtful Seattle Times guest column on Sept. 7, 2013 outlining the reasonable policy arguments for the plan. On the surface the plan to eliminate or lengthen the time before use taxes are due is responsible, and in this case I’m appreciative of the compelling business case for taxpayers, which by many indications seems to pencil. All the while, it stands as a new tax exemption for multi-billionaires’ mega-yachts (the consummate first-world problem.)
And yet, my job as finance chair is to encourage us not to pretend that such action is without consequence or deeper ramification.
We have a policy obligation–actually a serious moral obligation to taxpayers–to look more critically at the implications of the Legislature’s fervent and rote political willingness to limit the fallout of our inefficient tax structure through an endless parade of such “modest fix(es) to our tax code.”
This request is, in some ways, a symbolic representation of our profound fear of a public examination of taxes, fairness, economic efficiency and a narrow rather than broad-based tax base. And we need, simply, to look closer at the context of why so many such requests flow into Olympia.
Too often we jump to the conclusion that there is simply no political appetite in our state for tax reform to alleviate the weaknesses of our system for people, while simultaneously entertaining endless ‘modest’ fixes that alleviate the inefficiencies of our system on important industries.
Despite the rhetoric to the contrary, we actually do embrace elements of tax reform each and every legislative session, each year, each time an industry makes a strong case. We retreat from doing so when the argument is about equity for people not efficiency for business. The challenge is to embrace both sides of the equation in a more authentic way.
Assuming this particular policy request is reasonable, and the data in this case is worth further investigation that there is a net benefit for the state, the broader problem is that by continually modifying our tax code to benefit industries that bump up against the unpleasant reality of a sales and use tax model–and B&O taxes–we distort the system further each year.
Currently we have about 700 tax exemptions, preferential rates and credits on the books. In 10 years will we have 1000, 1250 or 1500? How long can we ‘carve out’ industries that are negatively impacted by our economically inefficient system without collapsing the entire framework?
We have a heavy reliance on our sales and use tax and B&O tax system. We have no personal income tax. There are substantial implications to our model that are not trivial. In most cases the business community has calibrated and adjusted despite the fact that business does ironically, in fact, pay a disproportionate amount of state taxes. When adjusting to the current system is more logistically or operationally difficult for business–when the negative ripple effect of our system can’t easily be passed through to consumers–often the next stop is a visit to legislators requesting a “modest fix to our tax code” to reduce or eliminate the tax altogether.
Rather than the distortion of a high sales and use tax, higher B&O taxes with hundreds of specific tax exemptions, I prefer lower overall rates that are spread more efficiently and equitably across a broader base of business and individuals with very few exemptions. The Legislature is, unfortunately, addicted to the lethargic comfort of the status quo by which we continue to carve out industries year after year after year while lamenting the lack of political will for broader tax reform.
Sometimes a ‘modest fix to the tax code’ is more than it appears.
Your partner in service,
While the transportation budget is less dramatic than the operating budget in terms of net taxes paid to net benefits received, it is still material to good public policy decision making because it exposes the challenge of meeting the needs of 39 counties without a more flexible approach.
At a more in depth level, I believe the public benefits from a more nuanced, sophisticated awareness
about public taxes and spending. The lack of open data about how taxes travel into and out of state and federal government creates a lowest common denominator sentiment that all taxes are too high, all services too low, all government too inefficient and other such extremes. Reality is gray not black and white. Quality data and knowledge creates empathy, understanding and appreciation of our state’s overall quality of life.
Here is a comprehensive overview of how transportation dollars flow in Washington State.
As negotiators work behind the scenes in an effort to reach consensus about a transportation package, it’s useful to be transparent with the public about how the dollars actually flow. As the Senate Republican majority embarks on a seven-city tour of the state, it’s material information for those communities to have a broader sense of how they fit into the mosaic of our state’s larger infrastructure.
The schedule is as follows:
September 18 – Washington State Department of Transportation Olympic Region Office in Tacoma.
September 24 –WSDOT Southwest Region Office in Vancouver.
October 1 — WSDOT Northwest Region Office in Seattle.
October 7 — WSDOT Northwest Region Office in Everett with emphasis on Snohomish County.
October 14 — WSDOT North Central Region Office in Wenatchee.
October 22 — WSDOT Eastern Region Office in Spokane.
October 30 — WSDOT South Central Region Office meeting in Tri-Cities.
Interestingly, all of the counties in which the Senate Republicans are traveling for their transportation road show are ‘net contributor’ counties, meaning they pay more in taxes than they receive in benefit. Twenty two of the state’s 39 counties fall into this category. Thus, it stands to reason, the opposition in those areas to additional funding would understandably be stronger since presumably the public doesn’t feel benefits at least equal to their contributions.
Here’s a more summary of the 2013 Washington State Department of Transportation data providing a county level analysis of nine years of actual tax contributions and expenditures for 2004 through 2012:
• Total Contributions and expenditures in this nine-year 2013 analysis are $23.1 billion, which average annually to $2.6 billion. This is an increase in the annual average of 8.3% from the 2010 analysis
• The majority of the counties in the 2013 analysis (56% or 22 counties) had a rate of return greater than $1. Twenty- one counties (54%) have a rate of return which is higher in the 2013 analysis than in the 2010 analysis.
The breakdown by category of how those dollars flow: The period between 2004 and 2012 for a total of $25.5 billion of state dollars:
Ferries facilities 9.97%
Debt service 9.28%
Local programs 1.49%
Public transportation 1.19%
These numbers suggest that King County and other areas where public transportation dollars are valued shouldn’t be required to use incremental local dollars to fund our services, we should have access to the same pot of money as everyone else for our local needs. While the 18th Amendment considerations are a piece of the puzzle, it’s been a crutch for too long. It’s time for systems change.
Your partner in service,
Here’s the full state breakdown by county. (Click to enlarge!)
The scope of the sweeping coal export proposal’s environmental impact statement (EIS) announced today by the Washington State Department of Ecology meets the rigorous and comprehensive test legislators presented to our Governor and Ecology Director earlier this year.
We said in our outreach, plainly and clearly, that the state needs to thoroughly evaluate the net impact of the proposed Gateway Pacific Coal Port on our existing centers of commerce in order to accurately understand the legitimate economic, transportation, health and environmental implications on our state’s economic future. (Legislators’ letter and comprehensive background material is provided here).
In 2012, Governor Gregoire, Attorney General Rob McKenna and Congressman Jay Inslee each called for a comprehensive, cumulative impacts analysis of the coal export plans. This initial EIS scope represents the tactical implementation of that policy position, and represents the level of analysis legislators have also embraced. As described by Ecology today, the environmental review process will provide the thorough level of interdisciplinary, coordinated and cumulative review legislators requested and the 6.8 million people of Washington deserve.
My constituents in Seattle, and communities statewide impacted by the proposal, are demanding this serious and in depth level of analysis. This is not about one town or city, one philosophy or policy framework, it is about a systems approach to an international issue. Proponents and opponents should not fear a robust public process and examination.
The troubling story behind the headlines, however, is the lack of policy thought leadership by the federal government. The U.S. Army Corps of Engineers, as the lead federal agency, is focusing under NEPA on a narrow examination of impacts solely under their direct authority. At a time when the federal government is virtually paralyzed by the institutional grip of inaction–despite President Obama’s call for proposals to be examined through a measurable environmental framework–it is jolting to recognize that no broad-based federal assessment, review or examination is occurring on this massive interstate commerce issue. The federal government’s deafening silence is a clarion call of action to Olympia, Salem, Boise, Helena, Cheyenne and other state capitals to dust off the 10th Amendment to the U.S. Constitution itself to defend our individual and even regional interests against a lethargic federal bureaucracy.
I am particularly pleased that the scope of the EIS will examine the significant proposed increase in rail and vessel traffic and what this added congestion will do to our existing routes of commerce—including at the right stage King County as the heart of our state’s economic engine—and what the cumulative impact of the Gateway Pacific Coal Port proposal and other coal export proposal might have on our state rail system. Under the state Department of Transportation projections, for example, rail traffic is expected to double in Washington under normal economic growth by 2035–not including this statewide proposal. With this proposal’s additive 18 or more additional trains per day through downtown Seattle, on top of the 60-70 baseline each day currently, the long term strategic interests and implications must be better understood to ensure a 21st Century infrastructure. Vessel traffic throughout Puget Sound must be understood at the economic, environmental, commercial and safety levels.
Moreover, the EIS scope will examine the cumulative impact of the proposed increase in rail traffic from both the Gateway Pacific Project and the Millennium Project in Longview on our vital freight corridor. The fact that these two projects would potentially add over 30 coal trains a day in centers of commerce such as Spokane highlights the need for examination of mitigation options and cost.
The proposed EIS will enable an examination of the impact that coal trains would have on the ability of Washington businesses to move goods to and from port, and the complications to vehicle movement that would arise in areas where roads and railways intersect. Additional rail traffic would exacerbate existing rail congestion issues, and the incremental impact of this proposal on rail is substantial by any definition. The likelihood of increased short-haul freight costs (for example apple transport between Wenatchee and Seattle) serve as a further externality of the plan. These impacts will receive a thorough analysis under the EIS and will enable our ports, cities, and counties to assess potential impacts to their business and community centers.
Specifically: Under both NEPA and SEPA, the three co-leads will conduct extensive analysis of the projects’ on-site and nearby impacts, including wetlands, shorelines, water and air quality, cultural and archeological resources, fish and wildlife, noise and vibration, among other possible effects. A detailed evaluation of the projected 974 annual vessel trips associated with the terminal also will be assessed.
Under SEPA, Whatcom County and Ecology will require:
§ A detailed assessment of rail transportation impacts in Whatcom County near the project site, specifically including Bellingham and Ferndale.
§ An assessment of how the project would affect human health, including impacts from related rail and vessel transportation in Whatcom County.
§ An evaluation of greenhouse gas emissions from terminal operations, and rail and vessel traffic.
In addition, the Department of Ecology will require:
§ A detailed assessment of rail transportation on other representative communities in Washington and a general analysis of out-of-state rail impacts.
§ An assessment of how the project would affect human health in Washington.
§ A general assessment of cargo-ship impacts beyond Washington waters.
§ An evaluation and disclosure of greenhouse gas emissions of end-use coal combustion.
We are a pro-trade, pro-growth, pro-economic infrastructure state, but those international values do not require us to blindly support a stale 19th Century proposal to ship an aging commodity to weakening Asian markets. Those values call upon us to be more strategic and forward thinking.
More than 125,000 people commented over 121 days on the coal export proposal during the EIS scoping development process. Legislators, business and labor interests, environmental activists, small town and big city mayors and many others spoke out to include their voices in this process. By any definition in this long, laborious public process the Department of Ecology responsibly and carefully listened to all of those diverse voices in taking this step forward.
This is only one step in a long and vital public process. Much work remains to be done. But this is a good day for transparency and a fair, open and robust public examination of our state’s future.
At the same time, while Ecology’s role in the EIS shows a concern for the wide ranging operational issues, they are not examining the core question of wisdom of the policy and business decision itself. That is our job as public officials and as citizens. A new Goldman Sachs research report, independent of the company’s internal investment arm, presents an extraordinary data-driven outline of the weakening demand for thermal coal in China and Asia that is the very core of the coal export proposals justification in the first place. These structural economic issues must be examined as part of a broader public policy debate. It is essential–now more than ever–that the people of Washington engage and the Governor and Legislature exercise leadership.
We are so much more than what we’ve become.
Your partner in service,