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Proposed tax on Washington fuel exports draws retaliation from Alaskan lawmaker

Lawmakers in multiple states are pushing back on the legislature's proposed tax on fuel refined in Washington and shipped out of state.

OLYMPIA, Wash. — A trade war is brewing with Washington's neighbors to the north - and it isn't Canada.

Alaska is threatening sanctions if a key piece of transportation funding is passed by the state Legislature.

The Democrat-backed transportation package includes a 6-cent per gallon tax on fuel refined in Washington and shipped out of state.

It would raise $2 billion of the $16 billion proposed to build everything from buses and bridges to a new fleet of ferries. But lawmakers in Alaska are pushing back.

"Frankly, I'm tired of being thought of as a Washington colony," said Republican State Representative Kevin McCabe of Alaska.

In response to the Washington tax, McCabe is now proposing a six-cent per pound tax on fish caught in Alaska waters, as well as a daily six-cent per foot tax on Washington boats that moor at Alaska's harbors. 

He is also pushing for a $15 per barrel tax on crude oil shipped from Alaska to Washington.

When asked if the current climate constitutes a trade war between the two states, McCabe replied cheekily, "Wouldn't that be a shame?"

Alaska is not alone in its displeasure with Washington's Democrat-led legislature.

The governor of Idaho told Gov. Jay Inslee that "now is not the time for our states to turn on each other."

Oregon's governor wrote a letter to the Seattle Times warning of a likely lawsuit if Inslee doesn't veto the bill.

McCabe says there is a question as to whether the tax is legal under the federal Interstate Commerce Act.

"Basically it says that we shouldn't be raising tariffs between two states. There shouldn't be competition such as tariffs."

A spokesman for Gov. Inslee said he will approve the fuel tax if it comes to his desk adding, "Washingtonians bear the climate impacts of that fuel production. It's not unreasonable to share the social cost of carbon with those who benefit from our fuel production."

In the meantime, it appears the trade war is on, and "The Last Frontier" may be the new Boston Harbor.

"No taxation without representation," said McCabe. "Maybe the Washington state legislature wants to consider this the Alaska tea party."

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