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Published on Friday, February 12, 2016

Huge decline in MTCA revenues means stormwater assistance and toxic cleanup projects in danger

The fiscal crisis facing the Model Toxics Control Account (MTCA) came into sharper relief this week with the release of a new revenue forecast on February 17. A projected $68 million revenue shortfall grew to nearly $100 million.

To address this issue the Department of Ecology has already slowed down MTCA investments that were appropriated in the 2015-17 capital budget, which directed the agency to first slow down and delay toxic cleanup projects. That has left $44.3m in cleanup projects from last year’s budget stalled. The Governor’s budget included $25.5m in bond backfill as well as small fund shifts and cuts to mitigate this reduction.

There has been heavy advocacy from the proponents of those cleanup projects to reverse those delays this session, with a focus on pitting cleanup projects against stormwater projects. AWC’s approach to date has been to be supportive of balanced reductions that do not completely eliminate any spending categories but “share the pain” across the various programs, while working with other interested parties to pursue options to mitigate the need for major cuts (general fund backfill, bond backfill, other possible reductions or options). It is not likely that this session will conclude without significant cuts in these area without some major new developments.

At the request of legislative budget writers, Ecology and OFM recently released the following options (table below) for further cuts to meet the $67-$117 million shortfall. You will want to closely review these lists. There are many city projects that could be on the chopping block. These include projects that were appropriated in previous years’ budgets.

Basically any MTCA-funded project that is not completely under contract and underway is at risk, and possibly even some of those. The “priority” number means that is the first option that administration would support to address the issue, so #13 would be the last option from their perspective. Click on the links in the right column to see lists of projects at risk of being cut for each proposal.

If you have questions contact Dave Catterson or Carl Schroeder.



Total revenue

Project or award list


Delay many 2015-2017 new cleanup appropriations, provide partial bond backfill to move forward with highest priority projects

$44.3M in project delays

$25.5M in bond backfill

#1, #6


Fund shift to other dedicated accounts




Suspend Public Participation Grant Program for 2015-17 biennium




Vacancy savings plus MTCA hiring restrictions




Reduce Stormwater Preconstruction Reappropriations that are not under contract




Reduce cleanup new appropriations that are not finalized




Eliminate MTCA new stormwater appropriations scheduled to be signed July 2016-January 2017




Reduce Shoreline Master Program Competitive grants – unobligated resources previously planned to go out competitively




Eliminate FY 17 Stormwater Capacity Grants




Reduce Stormwater Reappropriations not yet finalized or started




Reduce Eastern WA Clean Sites Reappropriations not yet fully under contract or otherwise required to maintain existing cleanup remedies




Reduce Cleanup Puget Sound Reappropriations not yet fully under contract or otherwise required to maintain existing cleanup remedies




Reduce de-obligated Centennial Clean Water Program Reappropriations set to be used for a hardship community grant round



New proposal emerges to try to mitigate shortfalls

On February 12 a bill was introduced aimed at stabilizing MTCA revenues. SB 6660 would trigger an increase in the Hazardous Substance Tax (which funds the MTCA accounts) when revenues in any calendar year fall below $175 million, minimizing the potential major downward swings in the account. Normally a bill like this introduced by the minority party late in the session wouldn’t get much attention, but in this case Senator Keiser has secured Sen. Ericksen and Sen. Honeyford as important and well-positioned Republican co-sponsors. We are very interested to see if this proposal gains traction, as the cuts that will be necessitated this year because of revenue shortfalls are going to be very dramatic.