February 7, 2007

OLYMPIA — A new bill recently introduced in Olympia would redirect money from oil company profits to catalyzing renewable energy production in Washington, mitigating the high cost of gasoline and diesel, and financing rapid rail transit,  all through a state windfall profits tax on oil companies. 

“The money spent at the pump that ends up overflowing corporate bank accounts, that’s cash families could be using for other more pressing needs like medicines, rent, or even food, and foregone revenue for local businesses” said Rep. Bob Hasegawa (D-Seattle), Vice Chair of the Finance Committee and the bill’s prime sponsor.  “We should recapture some of those profits to stimulate energy self-sufficiency in Washington.” 

House Bill 1510, officially, “An Act relating to the community reinvestment of oil windfall profits,” would benefit individuals, families, and businesses by developing a state windfall profits tax on oil companies. It would recapture some of the ongoing record profits reported by the oil companies every year and reinvest that money back into our local economy by helping individuals and businesses offset the high costs of energy.  It would also invest in transportation and alternative energy research and development. 

“Look at the tens of billions of dollars in after-tax profit these companies are reporting every quarter!” Hasegawa added, “Is it too much? Is the public benefit well served by such grotesque profit?  How is our state economy affected by exporting all this money?  And what is the cost to family budgets and to business economic development, operating costs and jobs?” 

The tax would generate at least $600 million a year in revenue that would then be used to provide additional funding for public goods and services that are linked to the costs of energy and the development of renewable in-state energy resources, as follows:

• 18% to the energy freedom fund
• 1.8% to air pollution control
• 3.6% to state agencies for heating and transportation costs
• 3.6% to school districts for heating and pupil transportation costs
• 1.8% for construction of energy conservation projects
• 45% for commuter rail systems or rail fixed guide way systems
• 13.5% to Washington businesses that invest in renewable energy sources
• 12.7% to finance an across-the-board 2.5% decrease in the gross receipts tax on business

The windfall profits tax would not affect local distributors, only the top level parent companies.   

“Imagine the boost to our state economy if we could recapture a small portion of the corporate profits now hemorrhaging from our state – we’re talking at least half a billion dollars a year,” Hasegawa explained. “And put that money back into rapid transit, alternative energy development, reducing taxes on business, and energy cost offsets for individuals and businesses.”

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Bill information:

http://apps.leg.wa.gov/billinfo/summary.aspx?bill=1510&year=2007 

Rep. Bob Hasegawa (360) 786-7862

Downloadable photo: http://www1.leg.wa.gov/documents/house/members/photos/Hasegawa.jpg

Staff contact: Lilia P. Nieto, (360) 786-7375, nieto-torres.lilia@leg.wa.gov

 Radio and TV News Directors:  To obtain broadcast-quality audio on these issues, or to arrange for TV or radio interviews, please contact House Democratic Caucus Broadcast Coordinator Dan Frizzell at frizzell.dan@leg.wa.gov  or (360) 786-7208.