New study calls Hirst a $7 billion problem, demonstrates need for fix, Sheldon says

OLYMPIA — A new study pointing to a $7-billion-a-year problem for Washington state demonstrates the urgent need to overturn a state Supreme Court decision in an important water rights case, says state Sen. Tim Sheldon, D-Potlatch.

The study, released Tuesday by the Building Industry Association of Washington, estimates that the court’s Hirst decision will cost the state $6.9 billion every year in lost economic activity. The decision makes it difficult and costly for rural and suburban property owners to obtain permits for new wells, and presents a near-impossible hurdle for many.

“This study finally puts a price tag on the Supreme Court’s foolishness,” Sheldon said. “If it wasn’t already clear that the Legislature needs to pass a permanent solution, we now have seven billion reasons.”

The study, produced by the independent research and data analysis firm HR2, analyzes publicly available data to estimate the full statewide impact of the 2016 ruling. It shows significant losses to the state in lower employee wages, lost jobs, reduced tax revenue, and lower property values. Few will avoid harm. Value of undeveloped land requiring ground water is expected to fall a staggering $37 billion. And as the value of undeveloped property plummets, owners of developed parcels will see their property taxes increase, by $346 million a year.

The decision will have greatest impact in rural areas beyond the reach of city water systems, where no water means no development. The study estimates 9,300 jobs will be lost, mostly in rural areas.

“Two months ago we heard yelps from urban areas when the Senate insisted on a Hirst fix before the Legislature passes a capital budget,” Sheldon said. “This study shows we were right to do it. The capital budget pays for $4 billion in public works construction, and we have to hope the delay will only be temporary. But if we don’t fix Hirst, we face a permanent $7 billion problem, every year – and the cost will come straight out of the pockets of people like you and me.”

The Senate passed a bill this year that would have restored the law as it existed before the Hirst decision, but the state House, under Democratic control, took no action under pressure from environmental groups. Under pre-existing law, county planning departments were able to rely on general advice from the Department of Ecology as to whether sufficient ground water is available in a particular area, and property owners were able to drill household-size wells without obtaining water rights permits.

The decision now requires most county planning departments to evaluate each new application requiring a small well to determine if it will reduce the amount of water available in streams for fish. That means property owners must prove their wells will not impact fish runs, by paying for studies typically costing $10,000 or more. Yet the additional expense is no guarantee of approval. County governments maintain they lack expertise to evaluate water studies, and some already have stopped granting permits in areas where wells are required.

“It is hard to imagine a decision with more devastating impact on the state’s rural areas,” said Sheldon, who represents a rural district in the South Puget Sound and Hood Canal area. “The problem is purely hypothetical. These small rural wells draw less than 1 percent of the available water statewide, and the water returns to the ground through drainage and septic systems.

“What is real is that banks already are telling us they are unwilling to lend money for land where development is in doubt. We can’t fix this with a temporary solution. And if we don’t fix it permanently, we’re looking at a collapse of rural property values the likes of which the state has never seen.”