Port of Olympia joins other WA airports to potentially litigate state for diverting fuel taxes


The Port of Olympia Commission voted to join an interlocal agreement with other Washington airports on Monday, February 26, to potentially litigate the state for not using fuel taxes for airport-related purposes, violating Federal Aviation Administration (FAA) regulations.

Through the agreement, the port and other Washington airports will support the Chelan Douglas Regional Port Authority (CDRPA) in contracting legal services for pre-litigation work.

The contractor will develop a legal framework memorandum to evaluate various legal theories upon which any potential legal action may be based. If the parties choose to litigate, the contractor will prepare the pleadings, engage with the WA Department of Revenue (DOR) and the Attorney General’s Office in preliminary settlement negotiations, and file suit if necessary.

Director of Operations Warren Hendrickson said that the agreement does not commit the Port to litigate the state. 

“It is not a commitment to litigation. It is a commitment to begin to work to address a formal legal complaint,” Hendrickson said.

The minimum contribution for the Port to the interlocal agreement is $1,000, but other general aviation airport sponsors like the Port of Moses Lake and Port of Skagit have contributed $5,000. Port staff initially requested that the commission authorize a contribution of $3,000 before the commissioner agreed on $2,000.

Other potential parties to the agreement are Seattle–Tacoma International Airport, Spokane International Airport, nine commercial service non-hub airports, and 25 other general aviation airports.

WA airports losing $58 million annually

Hendrickson said that Washington airports are losing $58 million annually due to non-compliant revenue based on figures acquired from the Department of Revenue.

A document prepared by CDRPA and attached to the commission’s meeting packet shows that out of the state's six taxes on aviation fuel in the state, the state has been non-compliant with how it uses four fuel taxes.

The non-compliant revenue mainly originates from hazardous substance taxes, which generate around $56 million annually.

Other taxes on fuel include the petroleum products tax and oil spill tax, which bring in $1.2 million and $950,000 every year, respectively.

There are also sales and use taxes to fuel in various jurisdictions, but the money generated from these taxes has yet to be calculated.

Hendrickson said that these funds could be used to finance pavement repairs at the Olympia Regional Airport. He explained that the condition of the second runway at Olympia Regional Airport rates at “49” based on an index rating. This rating is lower than the state average of 67 to 68 which is already considered as “marginal and beginning to fail.”

Hendrickson emphasized the importance of making state funding more available for airports, as pavement repairs are not eligible for federal funding. He noted that in 2020, a WA Department of Transportation (WSDOT) study found that of the requested $12.5 million in state matching funds, only $1.4 million was available.

“State has been ‘slow-walking’ in addressing issue” --- Hendrickson

Hendrickson said that the state has been non-compliant since 2014, when the FAA issued a policy regarding the use of airport revenues. The policy confirmed long-standing regulations the FAA had about the use of fuel taxes since the 1990s.

In last week’s meeting, Hendrickson said that no corrective action has been taken to remediate the issue and that the state has been slow to address the issue.

“[DOR] have been informed in 2016 that the state was not compliant. It took them five years to write a letter to the state legislatures [saying that] we need some work to do and we'll have to calculate these numbers. And it took them almost another two and a half years to just even begin to calculate the numbers,” Hendrickson said.

“They have been slow-walking this, and that's an editorial opinion on my part,” he added.

Vasavada rejects agreement

The commission was not unanimous, as Commissioner Jasmine Vasavada voted against signing the agreement.

Vasavada expressed in a meeting last week that being in Olympia, they are able to talk with decision-makers to address the issue rather than pursuing litigation.

“I am not sure that entering litigation is the path that seems wisest to me at this moment where we have a transition of governors [and] we have the current WSDOT aviation staff who seem cooperative and helpful,” Vasavada said last week.

Vasavada suggested that the Port could address the issue through a budgeting solution, as WA DOR and WSDOT can propose to include the non-compliant revenue in the governor’s budget.

In this week’s meeting, Vasavada reiterated her position, believing the agreement would eventually lead to litigation.

“My discomfort is in the actual litigation strategy memo that wanted to start with legal standing, which is sort of a theory you just have to overcome in order to go and file a lawsuit. It really doesn't have much to do with the substantive conversation between airports and the state,” Vasavada said.

All the other commissioners, except Maggie Sanders, who was absent, voted to support the agreement.


5 comments on this item Please log in to comment by clicking here

  • jimlazar

    The proper use for aviation fuel taxes is to pay the health insurance costs of people living near the airport who suffer from the emissions when those fuels are burned, often in old polluting aircraft.

    Much of the aviation gasoline is still leaded, unlike the unleaded gas we buy for our cars (yes, antique cars still need alcohol-free gas, but they don't need leaded gas. The aviation industry is dragging their feet on this issue.

    Until the aviation industry fully compensates the public for the damage they do, none of that money should be used for airports. Airports should be paid for by landing fees on the aircraft.

    And the Port of Olympia should pay property tax on the airport property. It is not used for a public purpose, it is used to support private purposes (yes, the state owns several of the aircraft, but it's still not really a "public" use if only a few get the benefit.

    Wednesday, February 28 Report this

  • FordPrefect

    The threat of lead contamination from aviation has become an emotional argument rather than one based on objective or quantitative facts. Alleged lead poisoning attributed to piston aircraft flying overhead is at the end of a very long list of things that threaten our health in 2024. No, the airport is not going to pay for your health insurance. Yes, the industry is developing unleaded fuels. And no, it’s not as simple as running it through a Chevy small-block V8 from 1965.

    Questioning the importance of aviation infrastructure is shortsighted. Olympia Regional is home to three flight schools, multiple aviation repair facilities, one of which is a major helicopter repair operation, seasonal firefighting aircraft, State Patrol aircraft, EMS helicopters, the list goes on… these things have to exist somewhere and NIMBY logic doesn’t solve any problems.

    We have an airport, let’s figure out how to make it do the most good for our community. If you live right next to it and you really hate airplanes… bummer. Do you remember what Olympia was like without an airport? Me neither.

    The article is about the state misappropriation of aviation fuel tax revenue as a violation of federal law. Perhaps the proper use of those funds could speed up the replacement of tanks to make G100UL (unleaded avgas) fuel available sooner.

    Wednesday, February 28 Report this

  • FordPrefect

    In the realm of actual threats to our health, a coal-fired power plant has been churning east of Centralia since 1972 essentially because nuclear power is scary. That’s 120,000 TONS of sub-bituminous coal (much nastier stuff than avgas) EVERY WEEK for the last 50+ years.

    Put another way, that single power plant emits more and worse exhaust in one week than the nationwide consumption of avgas for a period of about six months.

    Humans are generally very poor estimators of risk.

    Wednesday, February 28 Report this

  • SecondOtter

    Isn't this the very same Port of Olympia that decided to expand the Olympia airport, called in a lot of experts, and FAA staff to plan the expansion and gosh, didn't bother to ask those of us living next to it if we had an opinion? They didn't because they knew what we'd say. Absolutely NOT.

    Of course it's NIMBY. Those who sneer at us who protest constant air traffic overhead aren't living next to it, or on the flight paths.

    There may, once have been room for all these airports...but it's gone now. Accept that the average person does NOT want the noise, the pollution, of a ''regional airport'', no matter what its size.

    If the Oly airport is losing money, it's because the wealthy few who use it as their own, taxpayer funded airport don't spend their money on it. They have US pay for it.

    The airport should be shut down, used only by firefighting, air evac and State Patrol.

    Wednesday, February 28 Report this

  • Boatyarddog

    Second Otter is correct. A new airport will be a headache for All involved, a headache NOT Needed by Thurston County.

    Those that feel the airport is outdated here have Many in County residents that Agree.

    This Airport renewal idea came from the Old Commissioners Agendas.

    We Have a Bright New Commission that in my opinion, should revisit the Idea of Building New.

    Saying that The Idea of Leaded gas and Noise near by is An Emotional Arguement, care little for Peoples Health, because it does'nt affect them... how Absurd.

    Im happy to see J.Vasavada put the brakes on OLD Commissioners undone work.

    Every desicision made by the Last Commissioners should be examined Closely.

    Wednesday, February 28 Report this