E very year when the rainy season hits, Seattle finds itself in deep shit. Sewage and storm water gush up and overflow from the drainage pipes that are designed to accommodate them but can't. It's not just shit—the storm water also has oil and other pollutants that wash from streets all over the city. The pipes that can't accommodate them are built to overflow into Lake Washington, Lake Union, Puget Sound, or the Duwamish River. (The city has a special permit to allow them to do this—lovely, huh?)

The Environmental Protection Agency "says we can't overflow more than one pipe per year, but like most cities, we do anyway," explains Esther Handy, aide to Seattle City Council member Mike O'Brien, who chairs the Seattle Public Utilities & Neighborhoods committee. The city council is hoping to fix this problem by raising utility rates to pay for $500 million worth of sewer-pipe replacements in the city over the next 15 years.

This might help the city's problem, but the rest of the state is still in deep shit. Millions of gallons of toxins wash from roads, driveways, and parking lots into Washington waterways like Puget Sound and the Columbia River each year. "Storm-water runoff is the state's biggest water-pollution problem," says Brendon Cechovic, program director for Washington Conservation Voters, "and the vast majority of it is from oil."

The federal Clean Water Act charges local governments with cleaning up their waterways, and the best way to improve the quality of storm-water runoff is to invest in infrastructure—like new sewage pipes, stormwater drains, and retention ponds, which trap pollutants before they enter our waterways. The problem is, infrastructure is expensive. And right now, there's no money to pay for it. Which is why, for the past two years, 25 environmental groups collectively calling themselves the Environmental Priorities Coalition (EPC) have introduced measures to hold refineries accountable for cleanup costs.

Last year, EPC's bill would've raised an existing tax on hazardous materials in the state from .7 percent to 2 percent. The tax applies to companies that produce over 8,000 hazardous substances in the state—including petroleum—and the revenue the tax generates is dedicated to hazardous-waste cleanup. The tax increase, had it passed, would've generated an additional $100 million annually for cleanup, according to Cechovic. It failed to make it through the house and the senate.

Speaker of the house Frank Chopp (D-43), who supported last year's bill, says he's ready to work with environmental groups again this year. "I want to see this succeed," says Chopp. "Voters are more sensitive to clean water issues, unfortunately thanks to the Gulf spill. I think we have a lot of good momentum to get a tax measure like this through the legislature."

Unless, of course, Tim Eyman's tax initiative passes first. I-1053 makes it impossible to increase any taxes without a two-thirds majority in the legislature. If that legislation sounds familiar, it's because it was originally passed in 2007 and then suspended by the legislature two years later to deal with the state's $2.6 billion budget deficit. Eyman's I-1053 would trump the legislature and reinstate the two-thirds tax majority.

"Voters don't like taxes—it's as simple as that," explains Eyman.

Regardless, voters aren't the driving force behind the initiative. In fact, I-1053's top contributors are all oil refineries—Equilon donated $50,000, ConacoPhilips donated $50,000, Tesoro Corporation donated $50,000, and, most recently, BP donated $50,000. Eyman explains that "local businesses don't like taxes, either, because they're forced to pass those increases straight on to their customers." BP, Equilon, ConacoPhilips, and Tesoro Corporation all have refineries in Washington.

So why is BP throwing its weight behind Eyman's anti-tax initiative instead of focusing on containing the 175 million gallons of crude oil it's dumped into the Gulf? "There's no question in my mind that they're trying to block our next move," says Cechovic, who's directing the EPC's campaign to tax oil companies and use the revenue for environmental cleanup of our state's water supplies. "There's millions of dollars' worth of work all over the state," Cechovic says, while the state faces a $2.9 billion budget deficit, and "oil refineries don't pay a penny towards cleanup. This is why local governments are at the point where they have no choice but to raise utility rates up and up and up."

Currently, the only way cities can raise funds for storm-water projects is by raising property taxes and utility rates—which is what Seattle now faces. The only way the state could help out would be through passing a bill like the hazardous-materials tax and channeling that money into improvements.

None of the oil companies backing Eyman's initiative returned calls for comment. However, Eyman argues that he's never seen a tax imposed on a business where "the business doesn't turn around and just stick it to their customers," meaning that if such a tax were to pass, oil refineries would respond by raising the cost of fuel.

But Cechovic disputes this. "Last year, oil industry lobbyists said our tax would raise gas prices by three cents. I don't buy it. Gas prices rise and fall 10 cents every week—we're not going to see three cents at the pump. The oil industry should shoulder the costs of cleaning up our waterways, bottom line."

And as much as everyone would love to embrace lizard-brain reasoning like No one likes taxes, therefore taxes should cease to exist, the sad fact is we need tax revenue more than ever—both Seattle and the state are bracing for huge budget shortfalls over the next year at least. Asked about the initiative in general, Representative Ross Hunter (D-48), chairman of the House Finance Committee, says, "It's a stupid initiative. Even if you don't believe the legislature should go off and raise the taxes, there's maintenance with the tax code that it prevents us from doing."

Environmentalists are now gearing up for a third try at getting legislation passed to put oil companies on the hook for toxic cleanup, but they're unsure how to proceed. "We're testing the waters, so to speak, to find out where the will is to come back and fight this in the legislature," Cechovic explains. If Eyman's initiative is passed by voters, EPC's bill is dead in the water. Passing a tax hike in the legislature is hard enough; passing one by a two-thirds majority vote is nearly impossible. One alternative is drafting the measure as a fee on oil—instead of a tax—but that, too, is problematic. "We introduced a $1.50 per barrel fee after Eyman's original initiative passed in 2007. Legislators basically told us that renaming a 'tax' as a 'fee' wouldn't work."

The EPC has another option: introducing an initiative of its own next year and putting a hazardous-materials tax before the voters. Initiatives, as Eyman could tell you, have their pros and cons—environmentalists would be able to draft their ideal bill instead of compromising with legislators, but it would be extraordinarily expensive to get on the ballot and would take a tremendous campaign to get approved. A lot of momentum has been built around clean water issues, thanks in part to BP's environmental disaster, but how long will environmentalists have to capitalize on the public's attention?

The only thing for certain is that the future looks oily and smells like shit.

"Instead of fighting us in the legislature, oil companies are blocking us before we can get our measure off the ground," says Cechovic. "These guys know what they're doing... and we're definitely concerned."

This article has been updated since its original publication.