Gene Duvernoy, president of the Cascade Land Conservancy. (CLC)
No repo men have towed away the capitol dome — yet — but is there any other good news from Olympia? Well, yes. Some good bills that didn’t require state dollars fared okay. Although the scorecard is mixed, environmental legislation has done better than one might have supposed.
Not least, at the Cascade Land Conservancy’s annual breakfast on May 12, Gov. Chris Gregoire will sign the Landscape Conservation and Local Infrastructure Program into law. The legislation, pushed by the CLC, will permit the trading of development rights between rural areas and cities in King, Pierce. and Snohomish counties, something that is already allowed, albeit not frequently done. More significantly, the new law will also let the cities finance infrastructure for new residents in development-rights-receiving areas by issuing bonds against the anticipated rise in property taxes. More about this important measure below.
The CLC’s bill was not part of this year’s “Green Agenda,” the four-item Olympia to-do-list pushed by the Environmental Priorities Coaltion. The Environmental Priorities Coalition had hoped to: pass the 2011 Clean Water Jobs Act, which would charge oil refiners (and others) a fee on the sale of petroleum and other hazardous substances to pay for stormwater projects on the shores of Puget Sound and other water bodies, including the Columbia and Spokane rivers; phase out coal burning at TransAlta’s Centralia power plant; limit the use of phosphates in lawn fertilizers; and keep environmental programs from getting hacked too badly by state budget cutters. At this point, the Coalition has won two, has almost certainly lost another, and so far has no decision on the fourth.
Anti-coal and anti-phosphate bills were passed during the regular session. The latter won’t ban the sale of phosphates. But if you go into your local garden supply store and look for lawn fertilizer, you won’t find anything that contains phosphates on the shelves. You’ll have to ask for it. Because most people don’t need phosphorous unless they’re putting in new lawns — and, in fact, most people don’t even know whether or not a fertilizer contains phosphorous — this shouldn’t impose a big hardship on anyone. Farmers, who do know what’s in their fertilizers, won’t have to change a thing.
The coal phase-out bill isn’t quite what the Environmental Priorities Coalition had origiinally hoped. The Coalition’s original proposal called for complete phase-out by the end of 2015. A couple of years ago, the governor had told the Department of Ecology to negotiate an end to coal burning at the Centralia plant by 2025. Some people saw the Coalition’s position as a direct affront to her. Under compromise legislation worked out by the governor’s office, the enviros, and TransAlta, one of TransAlta’s two big Centralia boilers will shut down by the end of 2020, the other by the end of 2025. Pollution-control equipment to reduce nitrogen oxide emissions — of which the TransAlta plant is the state’s leading source — will be in place by the start of 2013. The company will contribute $30 million for local economic development, in an effort to replace jobs and income lost when the coal operation shuts down.
Was the slower timetable a disappointment? “We found a way to make this work for everyone,” says Craig Benjamin of the Environmental Priorities Coaltion. The economic development component was “really what built the bridge” to labor and other groups. He says the resulting law represents “a huge success.”
And in fact, timing aside, it marks a turning point: After 2025, no one will burn coal to generate power in Washington any more. In fact, with Oregon’s Boardman coal plant due to shut down in 2020, no one will burn coal in the Northwest. (That depends on how you define the Northwest, of course: There is no plan to stop burning coal in Montana.)
The bill imposing an oil fee for stormwater looks like it’s going down for the third time. Two years ago, a similar bill passed the House but not the Senate. Last year, one passed both chambers but died in the special session under a major industry lobbying blitz. The special session came on the heels of the Anacortes refinery explosion that killed six workers, an event that inexplicably seemed to increase legislative sympathy for oil companies. Last year’s legislation would have imposed a “tax” on petroleum and other hazardous substances. This year, after the passage of Tim Eyman’s Initiative 1053, a new tax would require two-thirds votes of both houses, so the proposal has morphed into a “fee.” By any name, it has gained remarkably little traction.
The bill has had supporters all along. Stormwater projects involve a lot of heavy construction — think excavation, concrete pours, large-diameter pipes — so they would generate construction-industry jobs. Not surprisingly, some labor unions have supported the idea. Stormwater projects also cost a lot of money that city and county governments, which are legally obligated to undertake them, don’t have. Not surprisingly, city and county governments have supported it, too. Last year, going into the special session, the King County Council passed a motion urging the legislature to enact the bill.
Nonetheless, the bill has gone nowhere. Benjamin explains that the greens worked between sessions to address opponents’ concerns. This time, the Steelworkers didn’t oppose the bill. The Seattle Times endorsed it editorially. “Everyone recognizes that [stormwater] is a huge problem,” says Bill Robinson, state government relations director for The Nature Conservancy. In addition, the bill was “the number-one jobs-creating legislation that was in front of the Legislature this year.” But nothing seemed to work. “We really struggled to get traction,” Bejamin says. It’s all “a little frustrating.”
Last year, at the last minute, the legislature raided the MTCA toxic cleanup account and other funds to come up with $50 million for stormwater. This year, that isn’t likely to happen.
In fact, the Environmental Priorities Coalition has worked to keep the legislature from raiding MTCA and other environmental funds. Everybody knew coming into this session that budgets wouild get slashed. Robinson explains that the Coalition has tried to do three things: keep the funds from being raided for other purposes; make sure that the slashing will take place where it will do the least harm; and raise fees to compensate for general fund revenue shortfalls. So far, things have worked out pretty well — although so far doesn’t include the special session.
The funds are intact. The Coalition is reasonably pleased with where cuts haven’t been made. And it hopes that theLegislature will raise some fees to make up for cuts, especially in the area of forest practices and hydraulic permits. The need to inspect logging operations was made clear at the end of 2007, when logging on steep slopes in Lewis County were blamed for massive landslides. The state’s failure to monitor logging on those slopes was at least one reason why Peter Goldmark was elected Land Commissioner the following year.
But regulation takes money, and the fees currently charged don’t pay the full cost. Under any conceivable budget, there will be less state money than ever to make up the difference. Consequently, environmental groups and the DNR have pushed separately for industry to pay higher fees. Industry has pushed back, basically offering to trade higher fees for what the environmental community considers lighter regulation. Becky Kelly of the Washington Environmental Council points to recent a recent study of compliance with forest practices regulations that shows “half the time in western Washington they’re not leaving the right number of trees alongside streams.”
Kelly argues that spending less money to enforce the law makes little sense. A bill currently in the Senate ways and means committee wouild raise fees for both forest practices and hydraulic permits but would lengthen the permit term and would “streamline” the process by taking the enforcement of hydraulic permits away from the Department of Fish and Wildlife and giving it to the DNR. Not everyone considers that a good deal. In fact, Robinson suggests, it would be a very bad one. The environmental community opposes the legislation in its current form. People pushing the legislation “just assume that we’re so desperate we’ll settle for anything,” Robinson says. But he thinks it will be easier to get more state money down the road than to undo bad laws or regulations.
Like the proposed fee increases, the Landscape Conservation and Local Infrastructure Program pushed by the Cascade Land Conservancy is designed to raise revenue without raising taxes, but it can generate the extra cash without prying it from anyone’s reluctant fingers. This isn’t the first Washington legislation that allows tax-increment financing (or its near cousin). But it may be the first Washington legislation under which tax-increment financing actually happens. The new law permits a transfer of development rights from working farms and forest — and, if counties choose, other rural land of ecological significance — to urban developers, who could, within willing cities, build at higher densities. The sale can take place either directly, perhaps through private brokers, or through a city or county that will bank the rights and then resell them.
Under these transfers, the landowner gets the money, so there’s less temptation to turn rural land into real estate developments. The developer who has paid for these rights recovers that investment by being able to build more units than the zoning in a city “receiving area” currently allows. The receiving cities can issue bonds against the increased property-tax revenue that denser development will generate in an improvement district. The city can use the bond proceeds to build infrastructure that will both accommodate new people — the hefty impact fees levied on developers don’t pay the full cost — and, potentially, ameliorate the effects on people who already live there, softening resistance among the neighbors.
Tax-increment financing, which is allowed in many states but now in Washington, takes the “increment” of increased property taxes to be created by a project and devotes that additional tax revenue to the area around the project, say by building a park, for a number of years. Under ordinary circumstances, the increment would go to the general fund and benefit the whole city or county. This device has been deployed in Portland, for instance, stimulating lots of new development and amenities.
Originally, the CLC bill would have let a city issue bonds against the anticipated increases in city, county and port portions of projected future property tax revenues within improvement districts — but not the state or local portions that would support public schools. As passed, the legislation lets a city tap only the city and county increments; the ports get to keep their shares.
CLC had been working on the legislation for two years. There was no real opposition — and no deal-killing need for state dollars. Still, CLC president Gene Duvernoy says, “it’s a relief” to see the legislation actually passed. “You never take anything for granted down there,” Duvernoy says.
“It was realy important that we took a two-year approach,” says the CLC’s Government Affairs Manager, Leda Chahim. They spent the first year just educating people about the bill. There was no real opposition, although property-rights people were concerned that the process would somehow turn out to be less than voluntary.
But building enthusiasm was a different matter. With the help of the Heartland Institute, they worked with the cities of Montlake Terrace, Renton, and Tacoma to see, with real numbers, how the program might work for them. At the session, the Association of Washington Cities supported the bill at every hearing, and both Futurewise and the Washington Environmental Council leant support. In addition, the Realtors and Master Builders were on board. It was a very big tent indeed. And, of course, the bottom line, as Chahim notes, is that tax-increment financing “doesn’t take state resources at a time at which there just aren’t any.”
Passing the law doesn’t get CLC to the end of the road. Now, Chahim says, the question becomes “do we see projects on the ground?” Cities must choose to adopt the new program. Developers must choose to buy rights. Right now, with the real estate market languishing just north of the drain, there’s not much demand.
That will presumably change. Already, Chahim says, counties outside central Puget Sound have expressed an interest. If a few places try the new program and it works for them, more should jump on board. Chahim thinks of the next stage as “laying the groundwork” for the day the economy turns around.