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Washington Shellfish Fee Assessment
- Greene Team
- 23 minutes ago
- 4 min read
Evaluating Washington’s commercial shellfish fee structure to resolve funding gaps, protect operational diversity, and safeguard public health
Washington’s commercial shellfish industry—including oysters, clams, mussels, and geoducks—supports family-wage jobs, coastal communities, and a thriving seafood sector, while the Washington Department of Health (DOH) Shellfish Program oversees sanitation, licensing, and testing to ensure shellfish are safe to eat. Historically, the program has relied on a combination of commercial fees and state General Fund (GFS) revenue. Due to outdated fee rates, reliance on GFS has grown, creating an unsustainable funding gap.
Under state law (RCW 43.70.250), DOH must recover the full cost of its regulatory programs through fees. However, commercial shellfish license rates have not changed since 2007, and biotoxin testing fees have remained unchanged since 2015. In 2022, the Legislature directed DOH to develop a “Proposed Full-Cost Recovery” (PFCR) schedule that would have increased total base fees by 340–620% and introduced nine new charges. The proposal drew strong opposition from the shellfish industry and Tribal governments, particularly over impacts on smaller operations.
In response, the Legislature commissioned an independent review of DOH’s fee structure. Greene Economics was retained in July 2024 to analyze program costs, assess industry ability to bear fee increases, and provide recommendations that balance funding needs, public health obligations, and the long-term sustainability of Washington’s shellfish program.
Our Approach
Greene Economics reviewed over 100 DOH documents, including cost spreadsheets, presentations, and public comment responses, analyzing regulatory costs, fee assumptions, and operational methods underlying the PFCR proposal.
The team interviewed shellfish producers and Tribal representatives in Washington and examined program structures in six other shellfish-producing states under the Interstate Shellfish Sanitation Conference (ISSC) Model Ordinance—Alaska, California, Hawaii, Maryland, Oregon, and Virginia—to identify alternative funding approaches.
We also facilitated a four-day LEAN workshop with DOH staff to determine if there were operational efficiencies that could reduce costs. This analysis informed a refined assessment of industry capacity to support full cost recovery and identified opportunities to optimize the fee structure while protecting public health.
Results
Economic Significance and Industry Vulnerability: Washington’s shellfish aquaculture industry is a national leader, generating $252 million in annual sales in 2023 and supporting nearly 2,400 jobs. Interviews with growers reveal an industry under severe economic pressure from rising labor, fuel, and seed costs, while market prices remain stagnant—squeezing profit margins, particularly for smaller, family-owned farms that define the industry’s character.
Program Costs and Testing Burden: A forensic cost review shows the DOH shellfish program costs about $2.2 million annually. Critically, biotoxin and paralytic shellfish poisoning (PSP) testing accounts for $546,000—roughly a quarter of total program expenses but nearly half of the proposed fee increase—creating a disproportionate financial burden.
National Context: A comparative review of six other shellfish-producing states found that none mandate full cost recovery comparable to Washington’s requirement. Most significantly, no other reviewed state charges the industry directly for biotoxin testing. Instead, these essential public health costs are typically covered by general funds or other state revenue sources.
Public Good Classification: Biotoxin testing and monitoring meet the economic criteria to be classified and funded as a public good. Protecting public health, preventing illness, and ensuring consumer confidence in seafood safety benefit the broader public, not just the industry. A single food safety event could harm both the industry and the regional economy, making state-funded monitoring an essential economic safeguard.
Disproportionate Impact: While larger operations could likely absorb the PFCR fee increases, the analysis shows that the proposed increases would disproportionately harm smaller producers. Biotoxin fees alone would represent an average of 42% of total proposed base fees, creating a barrier for many family operations.
Recommendations
Greene Economics evaluated two fee structure options and strongly recommends Option B, which removes biotoxin testing costs from the fee structure and treats them as a public good.
Option A – Proposed Full Cost Recovery: Implementing the PFCR as proposed would cover all program costs but place significant financial strain on the industry. It could force out smaller operators, concentrate market power, and reduce the diversity of shellfish operations that makes Washington’s sector resilient and innovative.
Option B – Remove Biotoxin Fees (Recommended): Adopt the PFCR license fee proposal for shellfish licenses but remove biotoxin testing costs, funding testing separately as a public good (~$674,000 annually from GFS). This approach aligns Washington with other states, preserves industry viability and diverse character, recognizes biotoxin testing as essential public health infrastructure, and better allocates costs across all sizes of operations.
Additional recommendations include funding the DOH Public Health Lab’s transition to lower-cost testing methods, tying fees to inflation, and conducting periodic reviews to maintain sustainability.
Option B reflects that Washington’s shellfish industry is more than an economic sector—it supports sustainable aquaculture, coastal communities, and essential protein sources. Public investment in biotoxin testing preserves the industry’s diverse character and sustainability, ensuring public health protection and long-term growth.
To see our full analysis, findings, and recommendations on Washington’s commercial shellfish fee structure, view the full Shellfish Fee Assessment report.
