Lawmakers Urge Fix for Hirst Decision in Wake of New Study Showing $7 Billion Loss in Economic Activity Annually


Several state lawmakers are voicing their desire to overturn a state Supreme Court water-rights decision after a study released by the Building Industry Association of Washington estimated that the Hirst decision would cost the state $6.9 billion annually in lost economic activity.

The decision makes it difficult and costly for rural and suburban property owners to get permits for new wells, lawmakers have said. The ruling essentially placed the burden of water availability studies on local jurisdictions and property owners. Previously, Department of Ecology data could be used to determine water availability. 

The study produced by the independent research and data analysis firm HR2 analyzed data to estimate the full impact of the 2016 ruling. It shows lower employee wages, lost jobs, reduced tax revenue and lower property values in the state, as well as a $37 billion decrease to the value of undeveloped land requiring groundwater. The study states that as the value of undeveloped property drops, owners of developed parcels will see property tax increases of $346 million a year. 

Rural areas are impacted more than others because they are situated outside of city water systems, “where no water means no development,” according to a press release from Sen. Tim Sheldon’s office. The study puts job loss estimates annually at 9,300, mostly in rural areas.

The Hirst decision is a reason the state does not have a capital budget after Senate Republicans in July said they would not approve the budget without legislation to overturn the decision. A current House proposal would delay the court decision by 18 months. 

“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, D-Potlatch, 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.”

According to the report, there would be a $452.3 million loss in employee wages annually, $392.7 million in lost taxes to state and governments annually, $4.59 billion in losses to the construction industry annually, and $37 billion in lost property values in areas impacted by Hirst.

The 6-3 decision in Whatcom County vs. Hirst reversed an exemption created in 1945 for rural wells. It stated counties need to ensure that new wells do not impair senior water rights users, stream flow or fish. 

Prior the Hirst decision, counties could rely on the water calculations provided by the state Department of Ecology. 

“The Democrats can no longer ignore the Hirst decision. They like to pretend a Hirst fix doesn’t matter as much as the capital budget, but this study shows clearly that the annual negative economic impact far exceeds the cost of a temporary delay in state building projects,” Sen. Mark Schoesler, majority leader, R-Ritzville said. “The $6.9 billion in economic activity that would be lost every year that Hirst remains in effect is absolutely unacceptable. Every district would suffer.”

The Hirst decision requires most county planning departments to evaluate each new application with a small well using less than 5,000 gallons a day to see if it will reduce the amount of water available for fish in streams. Property owners need to prove their wells will not impact fish runs, according to a press release. Studies can cost $10,000 or more. 

Senate Majority Coalition Caucus Chair Randi Becker, R-Eatonville, said the details in the study are staggering.

“The people of Washington feel the pain of not having a capital budget right now, but it pales in comparison to the pain of postponing the Hirst solution we already negotiated with the House. They had six demands and we agreed to five. That’s compromise. Time for some compromise on their part,” she said. 

The Majority Coalition Caucus has argued since January that a solution to Hirst is crucial to the economic growth of rural Washington. 

Sen. Judy Warnick, R-Moses Lake, issued a letter to Gov. Jay Inslee calling for action toward a permanent solution. She chairs the Senate’s water-related committee and sponsored Senate Bill 5239, the only legislation to fix Hirst, according to a press release.

The bill was approved four times in legislative sessions, but the House did not bring the measure to a vote. 

“We need leadership from the governor and for legislators to take this issue seriously,” Warnick said. “This is not just a rural issue. Not fixing Hirst will hurt the entire state and this new study demonstrates the impacts will be significant. We spent all session hearing how our state needed more money. It is unwise to make those claims while saying our state can afford to lose billions on the backs of rural families.”

Rep. David Taylor, R-Moxee, the ranking Republican on the House Environment Committee and one of the lead negotiators of the Legislature on the Hirst issue, said the exhaustive research shows the importance of undoing the Supreme Court’s “flawed decision in an attempt to overturn decades of state water law — water law that was working for both urban and rural Washington.”

He said it was time for action and that a permanent solution is needed now. 

Since the decision, many county governments have stopped granting permits in areas where wells would be located, citing their lack the expertise to evaluate water studies, according to a press release.