Agency Seeks Fee Hikes for Polluting Firms

Seeking to avert a fiscal crisis, Ventura County’s clean-air agency unveiled a proposal Monday to dramatically increase fees it charges polluting companies to pay for smog-control programs.

Under the plan, some 1,400 companies would be required to pay 25% more during the next two years to renew annual permits to stay in business. Two other fees also would be raised as the Ventura County Air Pollution Control District searches for more revenue to cover its growing budget shortfall.

The district has not increased fees since 1990, but the action is necessary now because money flowing to the agency is shrinking while new laws demand more aggressive action against smog, said Executive Officer Dick Baldwin.

“We’ve reached a point where we’ve run out of good ideas on how to meet these mandates without increasing fees. We held out as long as we could, but this is a reality,” Baldwin said. “It will be a crisis if we don’t do anything.”

Business leaders reacted with a mix of empathy, skepticism and outrage. It came as little surprise--industry opposition nixed a similar proposal last year--and businesses urged the agency to consider more modest increases. A public workshop on the matter was held at the County Government Center on Monday.

“Charging companies more as they reduce emissions doesn’t make a lot of political sense,” said Thomas A. Umenhofer, vice chairman of the Ventura County Economic Development Assn.

Many local air districts in California are struggling to make ends meet as funds for anti-smog programs decline. The Ventura County district receives about one-third of its revenue by charging businesses for pollution they spew into the air.

But as polluters clean up and the air gets cleaner, fewer dollars are sent to the agencies as they gear up to fight smog far into the next century. Meanwhile, revenue from other sources, including vehicle registration fees, penalties for violations and the state and federal government, has not made up the difference.

In Ventura County, emissions from factories, power plants and other businesses have declined about 55% in the 1990s, although the county remains the fifth-smoggiest place in the nation.

Baldwin says he has trimmed costs and staff since 1992, but the agency’s budget is projected to be about $1 million in the red this year. The deficit so far is being covered by draining the agency’s reserve fund, but that account will become perilously low in two years. The air district has a $7-million annual budget and employs 70 people.

To cover the imbalance, Baldwin outlined increases in the three main fees charged to businesses. Companies would pay an additional 15% this year and 10% more next year to renew annual operating permits. Thereafter, increases would be linked to changes in the consumer price index.

For small businesses, including most dry cleaners, auto body shops and gasoline stations, the annual $250 fee would increase by $37.50 this year and another $28.50 next year. For big polluters, including power plants, oil industry operations and factories, the change could cost them thousands of dollars more per year.

In addition, the fees charged for new or modified sources of pollution would increase 12.5% to $450. Processing fees, which a business must pay for each piece of polluting equipment it operates, are proposed to rise by various amounts depending on the type of industry and equipment.

The proposal must be approved by the air district governing board. If the board endorses the plan, the changes would go into effect July 1. The board is scheduled to consider the matter at its May 11 meeting.

Many industry officials Monday acknowledged some form of fee increase is due, but they questioned whether such big increases are needed at once.

Suzanne Noble of the Western States Petroleum Assn. suggested a more gradual approach, raising fees over the next three to five years. She said a 15% increase in one instance was too extreme.

“They are already charging too much,” Jack Choi, owner of Sycamore Square Dry Cleaners in Simi Valley, said after the meeting. “I’m a very small business. There are too many fees. Something is wrong.”

Yolanda Benson, deputy executive officer for the California Independent Petroleum Assn., said the proposal comes at an inopportune time for the state’s oil industry, which has been battered by low crude prices.

“Any kind of economic impact could be disastrous for our companies. At this time of economic crisis in the industry, small companies will not be able to bear that,” Benson said.

Baldwin, however, said the proposed fee increases are but a “two-year stop gap measure.” Steep as the increases are, they will not be enough to make up for lost revenue or to ensure the agency can tackle additional assignments, including gearing up to enforce new federal standards for ozone and microscopic particles from fuel combustion--two of the most abundant pollutants in the state. He said more fee hikes may be necessary in a few years.

In the meantime, the agency is seeking additional revenue from the state and federal governments, which provide approximately just under a third of the agency’s operating budget, Baldwin said.