Olympia Update

Time running out to provide farm-fuel exemption from 'cap-and-tax' costs in 2023


April 13, 2023

OLYMPIA–With the April 23 conclusion of this year's legislative session just days away, it sadly appears the Legislature will not pass a bill to implement the exemption for farm fuel and certain other types of fuel from the costly fee created by the state's 'cap-and-trade' program that went into effect this January.

Ever since the Climate Commitment Act was passed by the Democrat-controlled Legislature two years ago, I predicted fuel prices would rise sharply in Washington once the cap-and-trade program created by the CCA went into effect in early January. I have been proven correct.

According to AAA, as of April 9, the average regular gas price in Washington was $4.38 a gallon, while the average diesel price was $4.99. In Oregon, regular gas was $3.99 and diesel $4.60. In Idaho, fuel is even less expensive, as gas was $3.55 and diesel $4.14. Is it any wonder many people living near the Idaho border are tempted to drive east to fill up?

Some areas of the economy were supposed to be exempt from paying the higher fuel costs associated with 'cap-and-trade' (or 'cap-and-tax,' as I call it) created by the CCA. But that has not happened yet. This is a huge concern, especially since the fuel increases these groups are paying due to 'cap-and-tax' are 10 times greater than what the Department of Ecology estimated months ago.

For the past few months, other legislators and I have asked the governor and Ecology to actually implement the exemption that farmers, farm-product shippers, barge operators and the maritime and aviation industries are supposed to receive so they don't have to pay the higher fuel prices caused by cap-and-tax. This exemption is part of the state law that Gov. Jay Inslee, Democrat legislators and environmental advocates wanted. It falls on Inslee and Ecology, as well as Democratic legislative leaders, to uphold this part of the CCA with the same vigor that they are with the rest of this law.

Despite our requests for action, DOE officials have pinned the blame on "Big Oil" instead of taking responsibility and trying to find a solution so farmers and others who are supposed to be exempt from "cap-and-tax" aren't paying the extra costs on their fuel.

The proposal (Senate Bill 5728) that 16th District Sen. Perry Dozier and I sponsored earlier this session to address this problem has not even received a hearing this session.

In recent weeks, 5th District Sen. Mark Mullet sponsored Senate Bill 5766, which aims to address the issue but is far from perfect. The bill calls for setting aside $50 million in cap-and-trade auction proceeds for refunds. But it would refund the cap-and-trade fuel surcharges only to farmers and ag-product haulers. Farmers and haulers would receive only an 80% refund on the extra fuel costs caused by cap-and-tax, and there would be no exemption provided for maritime or aviation fuel. SB 5766 also would end transparency by prohibiting refineries and thus distributors from posting the cost per gallon.

The Senate Ways and Means Committee was scheduled to hold a public hearing on April 10 on SB 5766 and then pass it on April 12. But the proposal has been yanked from the committee's calendar, so it appears dead for this session.

Farmers, barge operators and others affected by this lack of action in Olympia deserve better.

Sen. Mark Schoesler, R-Ritzville, has served the 9th Legislative District since 1993.


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