Washington container fee failure may herald California billÆs fate
The failure of a Washington state container fee bill to make it to the legislature floor may provide an insight into what awaits a new attempt to pass a similar bill in California.
After several weeks of interstate acrimony over a proposed Washington state container fee, lawmakers in Olympia, Wash., suddenly announced they were downgrading the plan to a study looking at the potential economic impact of a container fee.
The original bill, sponsored by Washington State Sen. Mary Margaret Haugen, D-Camano Island, proposed a $50 fee per TEU. Money collected from the fee would have gone toward a freight congestion relief fund to pay for improvements to the state's transportation system.
State opponents to the bill worried that a fee would drive cargo away from Washington state to Canada, Oregon or California. The Alaska Legislature also took notice, issuing a joint resolution Wednesday unanimously opposing the container fee. Legislators in Alaska have spent weeks blasting the bill and Washington government officials, often time hand-in-hand with West Coast, Alaska, and Washington business leaders.
The Alaskan resolution's sponsor, Rep. Bill Thomas, R-Haines, told the Petersburg Pilot that the added cost of shipping would be economically devastating to Alaska. 'Ninety-seven percent of goods shipped to Alaska arrive via shipping containers — almost all of them from Washington state,' he said. 'The fees would add an estimated $40 million to $50 million a year to the cost of freight and be borne by consumers.'
The California bill, sponsored by State Sen. Alan Lowenthal, D-Long Beach, proposes a smaller $30 fee per container moving through the ports of Los Angeles, Long Beach or Oakland. In each case, 50 percent of the monies collected would be used in the port region and 50 percent would be transferred to Sacramento.
As in Washington state, local, state and national business leaders have already taken an aggressive position against the Lowenthal bill. This is the third time Lowenthal has tried to pass a container fee bill. His office claims that this version would generate more than $525 million annually to help pay for road and rail improvements and clean-air programs tied to port trade throughout California.
Last year, California Gov. Arnold Schwarzenegger refused to sign the previous version of Lowenthal's container fee bill, stating that the bill was 'flawed in its construction, application, lack of accountability and failure to coordinate with other public and private financing sources.'
As in the case of the Washington bill and past versions of the California bill, the container fee is strongly opposed by retailers and ocean carriers, who say it would divert cargo and drive up prices on consumer goods.
The National Retail Federation, a coalition that includes Home Depot and Target, said the fee amounts to an unfair tax on consumers.
They also contend the fee would hurt California ports’ competitiveness and workforce as retailers and shippers look for alternative ports outside the state, NRF President Tracy Mullin said in a statement after the introduction of the new Lowenthal bill.
Opponents of the California bill, like opponents of the Washington bill, also question the bill’s legality on grounds that it violates international and federal trade laws, saying if it was approved, legal challenges could tie it up in court for years.