Posted on Sat, Mar. 10, 2007


Gax tax increase eyed to offset leak cleanup


McClatchy Newspapers

Legislators are considering an increase in the state gasoline tax to bail out one of the nation's least effective groundwater-cleanup programs.

The effort would help rid South Carolina of more than 3,300 underground storage tanks that officials say are leaking poisonous chemicals.

Rep. Jeff Duncan, R-Laurens, has introduced a bill that would raise the gas tax by one-half cent to generate an extra $17 million. That would double revenues to clean up leaks and satisfy federal concerns about the program.

"It's a big deal and something we need to address," Duncan said.

The bill, approved Tuesday by a House subcommittee, would hit motorists' wallets at a time of rising gasoline prices.

Gov. Mark Sanford and some state legislators already were raising questions about the bill this week. Sanford spokesman Joel Sawyer said the governor prefers the cleanup be funded through existing sources of revenue, rather than raising taxes.

"The governor has been very clear about his stance on taxes," Sawyer said. "We would not accept a tax increase without a corresponding tax decrease some other place." Republicans David Umphlett of Berkeley and Joan Brady of Richland are on the House committee considering the bill. They said they don't want the public to pay to resolve a funding crisis that should have been addressed long ago.

A rise in the state's 16.75-cent gasoline tax would affect motorists every time they fill up at the pump, they said. Depending on the type of vehicle and an annual mileage of 15,000, the tax increase would cost between $20 and $50 a year.

"This thing should never have gotten down to this point," said Umphlett, who said state environmental officials didn't tell him about the problem until this year.

At issue is how to increase funding for a state pool that pays for underground storage tank cleanups. The fund, which covers gas stations and convenience stores, is inadequate to address the leaking storage tanks across South Carolina, according to the U.S. Environmental Protection Agency.

Gas taxes generate about $17 million annually for the pool. It needs about $40 million a year.

If South Carolina doesn't substantially increase revenues for underground storage tank cleanups, the EPA could take action that would cause service station and convenience store owners to buy private insurance, which would mean higher costs anyway. Michael Fields, director of the S.C. Petroleum Marketers Association, said a gas tax increase is the right way to finance the cleanup. Small service station owners would be put out of business by high insurance costs, he said.

"A person could have a very hard time even getting insurance if they have older tanks with a history of releases," Fields said. "But right now, we have a fund that, if adequately set up, gives us the ability to go in and get these [pollution] releases out of the environment." Grover Nicholson, chief of North Carolina's underground storage tank program, said Southeastern states would welcome more money for cleanups. But the best way to attack the groundwater pollution problem is through private insurance, he said.

Government cleanup funds don't provide much incentive for underground storage tank owners to try to avoid leaks, he said.

"The trust fund, right now, is really a subsidy," Nicholson said. "The costs are predominantly on us. They need to be predominantly on the tank owner." The fund pays for leaks on property where regulators know who the owner is as well as on abandoned sites.

South Carolina's tank cleanup fund requires businesses with underground storage tanks to pay a $100 annual fee per tank. They are covered for up to $1 million in cleanup costs after paying a $25,000 deductible per leak.

In addition to the gas-tax increase, the bill before the Legislature would raise tank fees to $135. By comparison, North Carolina charges a $300 tank fee.

South Carolina, like North Carolina and some other states, has known for years its tank fund was too small to pay for all the needed cleanups. In September, the Environmental Protection Agency warned the S.C. Department of Health and Environmental Control about pending federal action if funds were not increased.

The EPA could refuse to recognize the state tank remediation fund as a meaningful way to clean up leaking storage tanks. But tank owners still would be liable to clean up the expensive problems. "We've been concerned for a good while about the situation in South Carolina," said John Mason of the EPA. "We've worked with states down through the years on ways to increase revenue. For one reason or the other, (South Carolina) was never able to make this happen."

Mason, chief of the agency's underground storage tank section for the Southeast, said South Carolina is among 10 states with the least effective tank cleanup efforts in the country. Those 10 states account for 61 percent of underground storage tank releases nationally that have not been cleaned up, he said.

Leaking underground storage tanks are an ongoing concern because of the threat they present to groundwater. Richland County has 168 sites with failing tanks that need attention, according to DHEC. Leaking underground storage tanks are responsible for about 80 percent of groundwater contamination in the county, a 2006 state pollution inventory shows.

Brady said the S.C. environmental agency's "first responsibility is to the citizens of the state, to be sure the fund is solvent and they have enough to maintain a level of safety. Right now, the fund seems dangerously low, especially looking at Richland County's [needs]."

State environmental officials said during a meeting with lawmakers this week they've tried for several years to raise awareness on the issue, but Brady and other House members said it's the first time they've seen such a bill offered.

Either way, the issue needs resolution, said Kent Coleman, a state underground storage tank regulator. Coleman said about 1,200 of the more than 3,300 leaking storage tanks are a high priority for cleanup. Service station owner Butch Taylor said South Carolina eventually may get rid of the tank cleanup pool and allow private insurance to handle it. But for now, it needs to put more money into the pool to cleanse groundwater and protect small service stations that can't afford private insurance, he said.


At a glance

The bill would generate an extra $17 million to clean up leaks from underground storage tanks.





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