OLYMPIA — The Senate and House finalized a spending plan last week that includes $30 million to partially reimburse farmers and truckers who paid cap-and-trade taxes on fuel used to grow and transport farm goods.

The budget directs the Department of Licensing to begin issuing refunds Sept. 1.

The pot will be emptied quickly, Washington State Dairy Federation policy director Jay Gordon predicted. “To quote Ross Perot, I think you’re going to hear a giant sucking sound,” he said.

The Climate Commitment Act purportedly exempted agricultural fuels from cap-and-trade taxes. The law went into effect Jan. 1, 2023, without a mechanism to apply the exemption in all cases.

The Washington Farm Bureau estimated late last year farmers had paid more than $150 million in cap-and-trade taxes. The estimate didn’t include cap-and-trade taxes paid by haulers of farm goods.

Farmers and truckers will be pitted against each other, scrambling for limited funds, Washington Trucking Associations President and CEO Shari Call said.

The licensing department may be overwhelmed with refund requests, showing the actual impact of cap-and-trade, she said. “I think it’s going to be a very competitive process.”

“I believe that $30 million will be gone before someone can gather up 18 months of receipts,” she said. “It’s not a 100% solution.”

Repeal on ballot

Cap-and-trade taxes on diesel have ranged from 48.5 cents to 63 cents a gallon, according to a formula widely accepted by economists.

Farmers and truckers won’t be reimbursed by the gallon, but rather in tiers based on the amount of fuel purchased: Under 1,000 gallons, $600; 1,000 to 4,000 gallons, $2,300; 4,000 to 10,000 gallons, $3,400; over 10,000 gallons, $4,500.

If Initiative 2117 passes in November, cap-and-trade will be repealed and refunds will stop. The $30 million may be gone by then anyway.

Considering the amount of fuels used by farms and the level of taxes, the reimbursement fund was insufficient, said Republican Sen. Mark Schoesler, who farms wheat near Ritzville.

“Who would have noticed if it were only a few pennies?” he said. “You’re suppose to take a partial settlement. Is that right? … Hopefully, it will be properly settled in November with a repeal.”

Farmers and truckers applying for refunds “may submit receipts and other documentation,” the budget states. The licensing department can keep up to 5%, or $1.5 million, of the $30 million to administer the refunds.

The licensing department is to give priority to “noncorporate farms.” The budget doesn’t define “noncorporate.” Family farms are commonly registered as a separate legal entity.

Democratic-controlled committees declined to hold hearings this session on bills directing the Department of Ecology to enact the exemption. The department says it has supplied guidance to fuel suppliers and distributors.

Republican Sen. Perry Dozier, a wheat farmer in Waitsburg, said the refunds look good only on paper.

“Thirty million is nothing. That’s going to be nothing,” he said. “It’s like throwing a dog a bone to shut him up for awhile.”

All and all, it’s something, Gordon said. “It’s better than a kick in the teeth.”