Washington State Considers Raising Insurance Tax to Help Fight Wildfires

With an increasing number of forest fires scorching portions of Washington each year, the Legislature is considering a proposal to create a fund dedicated to preventing and battling wildfires.

In March, Commissioner of Public Lands Hilary Franz and state Senate Democrats proposed to increase the tax on premiums for property and casualty insurance in order to raise $62.5 million annually to pay for wildfire suppression and prevention.

“Never before have we faced a wildfire crisis of this magnitude,” Franz told lawmakers recently. “And one way or another, we are going to pay for our wildfires and dying forests. The question is whether we are going to pay to react as we deal with smoke and flames, or pay to be proactive.”

The state’s insurance industry pushed back on the proposal, saying it amounted to a 20% tax increase that unfairly targeted insurers.

Franz countered that more than 2.2 million homes in Washington are exposed to wildfire, and the cost to fight such fires has averaged $153 million per year over the past five years. “It’s getting harder to keep our communities and our firefighters safe,” she said.

The proposal would help the state modernize its wildland firefighting forces, as well as help restore 1.25 million acres of forests to make them more fire resistant, she said.

The money would come from raising the tax on premiums for property and casualty insurance from 2% to 2.52%. Franz said the increase would cost the average household less than $2 per month.

Washington needs dedicated funds for wildfire suppression and to restore the health of diseased and dying forests, Franz told the Senate Ways and Means Committee, which held a hearing on the bill Monday.

Several lawmakers agreed with her.

“We’re seeing wildfires that are bigger and harder to contain, and we’re seeing them far more often,” said Sen. Kevin Van De Wege, D-Sequim. “What should have been beautiful skies over the Olympic Peninsula last summer were gray and overcast. The air around Puget Sound was so unhealthy, people had to stay indoors.”

“In eastern Washington, people lost homes and other valuable property,” he said. “If we don’t take action now, this is what we can expect every summer in the years to come.”

Sen. Christine Rolfes, D-Bainbridge Island, agreed. “Year after year, we rely on our state’s rainy day fund to reimburse catastrophic fire response. It’s time for the state to plan responsibly in order to protect communities and invest in healthy forests” Rolfes said.

Mel Sorensen of the American Property and Casualty Insurance Association opposes the proposal. “This is a societal priority, not just an insurers’ priority. A different funding source should be found,” he said.

The tax will apply to all manner of property and casualty insurance, including renters, vehicles, medical malpractice and other sorts of insurance, Sorensen said.

Clark Sitzes, representing the Professional Insurance Agents of Washington, said insurance buyers are very price sensitive and a few dollars may prompt some people not to buy policies.

The insurance representatives also questioned the estimated cost of $2 per month, saying that sounded low considering the variety of policies held by many residents.

The proposal is supported by the Washington Public Employees Association, which represents wildland firefighters, spokesman Seamus Petrie said. “This will enable the department to increase training,” Petrie said.

Franz told the committee that in the past decade the wildfire season in Washington has increased from three months to nine months, and the state was seeing bigger and more destructive fires.

“No one is safe from it,” she said.

Last year was the Department of Natural Resources’ busiest fire season ever. The agency responded to more than 1,850 wildfires, and 440,000 acres burned across Washington. Forty percent of those fires were west of the Cascades.

In March, the state saw 50 unseasonal wildfires, 49 of them in western Washington, lawmakers were told.