The dark side of carbon tax’s demise

The dark side of carbon tax’s demise
Supporters of SSSB 6203 imposing a carbon tax primarily on petroleum companies in Washington state say it lacks the votes needed to clear the Senate. However, a more stringent carbon tax proposal may be put to voters in the form of a ballot initiative, a fear that drove some lawmakers to support the bill. Created by Welcomia - Freepik.com

After the election of Sen. Manka Dhingra in the 45th legislative district gave Democrats control of both legislative chambers and the governorship, some wondered if 2018 was also the year for a carbon tax. Those hopes have proved premature; even though the bill managed to clear two critical committees, its backers recently announced they had insufficient votes in the Senate to carry it through.

In a Facebook post, Sen. Reuven Carlyle (D-36) wrote: “I’m extremely proud that your legislature tackled climate change head on with a historic carbon pricing plan. Our bill passed two major committees–a first in a legislature nationwide–and will impact future bills and initiatives for years to come. We fell short this year, but progress is unstoppable.”

Carlyle was the prime sponsor of SSSB 6203, which would have imposed a tax on carbon emissions in the state. The legislation was introduced at the request of Governor Jay Inslee, whose State of the State speech at the beginning of the session centered around enacting new climate change-related policies.

Yet opponents shouldn’t break out the champagne quite yet; environmentalists plan to turn once more to the ballot initiative process after I-732 was defeated in 2016. One of the reasons for its defeat was division among environmentalists over its revenue-neutral approach, which they are unlikely to replicate the next time around. The Seattle-based environmental group Front and Centered had already announced in a January blog post their plans for an initiative co-written with the Alliance for Jobs and Clean Energy.

Unlike a bill, the “all-or-nothing” nature of voter-approval means there won’t be any opportunities to amend or revise flaws. That reality is what drove lawmakers such as Sen. Tim Sheldon (D-35) to vote in favor of SSSB 6203 while it was in the Senate Energy, Environment & Technology Committee. He is the only Democrat who caucuses with Senate Republicans and is a former commissioner with the Mason County Public Utility District.

He told Lens that “I was hoping that there might be a little more common sense” with any possible initiative based on “the discussion that we’ve had on the bill.”

In its present form, SSSB 6203 would have caused the price of a gallon of gas to immediately go up by 12 cents. By 2029, it would have added an extra 30 cents to every gallon of gas pumped. Although touted as a tax on carbon, the bill included dozens of exemptions that effectively made it a gas tax hike; the transportation sector makes up around half of the state’s greenhouse gas emissions.

The exemptions were intended to offset potential economic blowback from the tax, as one Senate lawmaker said the proposal was akin to putting a “do not enter” sign on Washington state for manufacturers.

Though Washingtonians aren’t ready to pay for another de facto gas tax increase on non-transportation projects, Sheldon noted positive changes to the bill that included dedicating the tax revenue to forest health work and more focus on rural economic development. “So (it had) better ideas and change of title, which I think was helpful.”

Yet, the bill’s exemptions may not get included in a potential initiative, warns Todd Myers, the environmental director at the Washington Policy Center. In a blog post, he writes that “In an effort to win votes, the bill had become a Christmas tree upon which lobbyists and special interests could hang their requests for subsidies. It is not, however, the last word on carbon taxes this year. Washington voters will likely have their say this fall. Left-wing environmentalists have said they will put an initiative on the ballot. Groups like The Nature Conservancy, which is organizing the initiative drive, have already warned that the cost of their initiative will be much higher than the legislative proposal.”

He adds: “Additionally, while the legislative proposal carved out many energy-intensive industries in Washington – which is both good and bad – the initiative will likely protect fewer industries, increasing the risk that they leave Washington state for locations that are more regulatorily friendly.”

Sheldon’s fears are similar to Myers. “It (ballot initiative) won’t be finely-tuned. It will be a blunt instrument that the authors will try to pass with talking points and exaggerations.”

However, Olympia insiders suggest that carbon tax opponents are confident a ballot measure calling for a tax increase won’t find favor among Washingtonians, particularly those already paying a higher state property tax to pay for new basic education spending.

Sheldon said, “It may do worse than the last initiative (I-937) because while our Puget Sound area is doing well, the rest of the state is still struggling, and people are feeling overtaxed – even in the Puget Sound area.”

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