OLYMPIA, Wash. — Wolves, water and taxes are the headline agricultural issues as legislators prepare to convene for their 2015 session in the Washington State Capitol.

Wolves haven’t crossed the “Cascade Curtain” that divides Washington state, but anger at livestock predation has. Rep. Joel Kretz, an Okanogan County Republican, says he hopes legislators will address the management of the apex predators and their impact on livestock producers in Eastern Washington. “I think it’s in play this year,” he said.

Water always occupies the attention of eastside lawmakers from agriculture-rich districts, though to many westside legislators the issue seems dry. This year, however, eastside and westside lawmakers may form an alliance to promote a statewide multi-billion-dollar water bond.

The money would fund water-storage projects in the east and flood- and pollution-control projects in the west. “If we just did water supply, you would not receive much support from Western Washington,” said Yakima Valley Sen. Jim Honeyford, a Republican.

While wolves and water are sure to attract attention, members of the Legislature are likely to be pre-occupied with $1.4 billion in revenue increases Gov. Jay Inslee has proposed. Though the governor handed farm lobbyists a pre-session victory by including in his budget proposal tax breaks for food processors, they are still nervously watching for other tax increases that may impact the state’s 37,249 farmers.

Inslee’s two-year $39 billion budget proposal is about $5 billion higher than the one lawmakers passed in 2013. To an extent, the state Supreme Court and voters have wrested some control over spending from legislators. The court has ruled the state must spend more on kindergarten through high school education, while voters passed Initiative 1351 in November mandating smaller class sizes, further adding to the state’s school bill. Inslee has proposed a $2.3 billion education package, which some education advocates are calling inadequate.

Washington Farm Bureau Director of Governmental Relations Tom Davis said he’s still worried budget writers in the Democrat-controlled House will move to end tax exemptions, including those for agriculture. Farm groups will argue agriculture is as deserving of preferential tax treatment as Boeing. “We think we’re OK with the Senate,” Davis said of the possibility agriculture-centric tax breaks may be eliminated. “This concern is fixated entirely on the House Finance Committee.”

Lawmakers will convene Jan. 12. The session is scheduled for 105 days, though it could go longer if the House and Republican-controlled Senate are unable to agree on a 2015-17 spending plan by mid-April.

The Senate has 25 Republicans and Mason County Sen. Tim Sheldon, who runs as a Democrat but is an ally of the Republican caucus. The Senate has 23 Democrats.

In the House, Democrats hold a 51-47 advantage.

Other agriculture-related issues include proposals to regulate spreading manure on crops, legalize hemp farming, increase resources to fight wildland fires and end state financial support for fairs.

While lawmakers are in session, the Washington Department of Fish and Wildlife is expected to update its wolf count. The census may spark talk about how to manage the animals when they are no longer listed as endangered under federal or state law, said Moses Lake Republican Judy Warnick, the incoming chairwoman of the Senate Agriculture, Water and Rural Economic Committee.

“The more they spread, the more willing people will be to have these discussions,” she said.

Kretz needled wolf advocates in 2013 with a bill proposing to relocate wolves close to Seattle. The legislation never got a hearing, but it succeeded in getting people talking, Kretz said.

This year, Kretz said he may propose regional delisting, releasing wolf-populated regions of Washington from the state’s wolf recovery plan.

Such a move would ease growing tensions between state wildlife managers and eastside counties, he said.

“I seriously hope I could get it done,” Kretz said.

He would have to find sympathetic westside Democrats. But even sympathy may not translate into votes. House Agriculture and Natural Resources Committee Chairman Brian Blake faulted the state plan for requiring wolves to be spread through the state before being considered “recovered” in any region.

“The folks in north-central Washington are being eaten out of house and home with no potential delisting in sight,” Blake, D-Aberdeen, said.

Still, Blake warned that amending the wolf-recovery plan could invite lawsuits.

“If we legislatively start pulling it apart, that, in my opinion, leaves us open to bigger problems,” he said. “I think you’re going to see potential for active management once the state population is delisted.”

The Washington Department of Fish and Wildlife estimates that won’t happen until at least 2021.

Washington has ambitious plans to increase water supplies, control floods and prevent stormwater runoff from fouling bodies of water. But the state lacks money. In Olympia, water projects aren’t as pressing as schools and roads.

The Legislature likely will appropriate money this session to advance efforts to increase water supplies in the Yakima Basin and Odessa Subarea, and to control flooding and restore fish runs in the Chehalis River. But the appropriations will be just a fraction of what the projects will require over the next several years. For example, the Yakima Basin plan to increase the water supply for farms, fish and cities is projected to be a 30-year, $4 billion effort.

Some lawmakers are working on a water bond to present to voters next year. Though no specific proposal has been released, the measure would propose a statewide tax — perhaps a per-parcel tax — to raise about $3 billion.

Honeyford said the measure would have to benefit all parts of the state to get substantial money for water projects. “We’re in competition with education funding and transportation funding.”

In the meantime, legislators will consider water-related bills aimed at allocating and reallocating every available drop of water.

Inslee’s 2015-17 budget proposes extending tax breaks for fruit, vegetable, dairy and seafood processors, saving companies $15 million over two years.

The tax breaks, most of them in place for nearly a decade, are set to expire June 30.

Northwest Food Processors Association lobbyist Ian Tolleson said extending the tax breaks would encourage industries to invest in Washington. “It certainly provides the environment where we can thrive,” he said.

House budget writers may take a more skeptical view of the value of tax breaks, and not just for food processors. The Farm Bureau’s Davis said that while he’s concerned about the House, he’s confident the Senate will join Inslee in supporting tax breaks for food processors. “Two out of three is pretty good leverage,” he said.

Bigger fights will involve capital gains and carbon taxes.

Inslee has proposed a 7 percent tax on capital gains of more than $25,000 for individuals and $50,000 for couples. The tax would not apply to retirement accounts or the sale of farms, homes and timberland.

He also proposes to cap carbon emissions for large industries, including some food processors and fertilizer manufacturers. According to a draft of Inslee’s proposal, companies would have to buy “allowances” at an auction. Each allowance would let the business to emit one metric ton of greenhouse gases. Auctions would be held up to four times a year. As time went on, companies would face stricter carbon limits. The program would also include offset projects, such as anaerobic digesters, which could sell credits.

Inslee says the cap-and-trade system would motivate companies to reduce carbon emissions.

The governor says he also plans to propose by executive order to cut carbon emissions from on-road vehicles.

The Farm Bureau and several other agriculture groups have helped form a new group, Washington Climate Collaborative, to oppose Inslee’s policies and advocate cutting carbon emissions through private-sector innovations.

The group argues Inslee’s proposals will increase business costs and punish consumers.

The Washington Department of Agriculture will request legislation to regulate manure spreading on crops in Whatcom, Skagit and Yakima counties.

The proposal stems from contaminated Lummi Nation shellfish beds in Whatcom County. The tribe closed 335 acres in Portage Bay because of worsening water quality caused by fecal coliform bacteria.

Polluted groundwater around dairies in Yakima County and contaminated shellfish beds in Samish Bay in Skagit County are also problems.

Farm groups say WSDA’s bill would unfairly single out agriculture for the problems, which are being addressed through local efforts. The law would be another burden for farmers and expose them to fines and lawsuits without any environmental benefit, the groups say.

“I’m inclined to give that bill a hearing, but I think it may face a difficult future,” said Blake, the House agriculture committee chairman.

Inslee has asked for an additional $2.5 million to beef up the Department of Natural Resources’ firefighting capabilities, especially early attacks on wildfires.

The proposed DNR budget also includes $7.7 million in grants to reseed and replace fences burned in the 256,000-acre Carlton Complex Fire — the state’s largest wildfire — in the Methow Valley.

Inslee’s two-year $39 billion budget proposal is about $5 billion higher than the one lawmakers passed in 2013. Still, there are some cuts, including $3.4 million from WSDA’s budget that would have gone to fairs. State funding makes up a large percentage of the budget for some county, community and youth fairs.

Sens. Brian Hatfield, D-Raymond, and Honeyford have introduced a bill to legalize growing hemp. “That will be one of the first bills we hear,” Warnick said.

Some lawmakers say it’s logical to legalize hemp farming now that the state has legalized recreational marijuana. National drug laws, however, make no distinction between hemp and marijuana, raising the prospect that hemp farmers could face difficulties with federal authorities and financial institutions.

Online

Text of The Carbon Pollution

Accountability Act of 2015: http://www.governor.wa.gov/issues/climate/documents/CarbonPolutionAccountabilityAct2015_Z-0307.2.pdf