Shell game with carbon tax revenue

Shell game with carbon tax revenue
The lack of certainty over the use of money collected from a carbon tax via Initiative 1631 has drawn criticism from several private sector labor unions who view it as a de facto gas tax without the same constitutional protections. Photo: Created by Freepik

Although Initiative 1631 has been pushed by advocates as a $15 per-ton fee on carbon emitters in the state that would reduce emissions and help finance clean energy projects, critics say it ultimately amounts to a new gas tax without guarantees on where the money would be spent.

Along with truckers, the state’s chamber of commerce and public utility districts, private sector labor unions have also added their opposition to I-1631, and division within the labor community prevented the Washington State Labor Council from obtaining the necessary votes to endorse I-1631.

Unions against the carbon tax include both iron workers as well as the Washington State Building and Construction Trades Council (WSBCTC), which is represented on the steering committee for the Alliance for Jobs and Clean Energy, the group sponsoring I-1631.

WSBCTC Executive Director Mark Riker told Lens that “as it is written right now, it is detrimental to our jobs. Our primary focus and secondary focus is jobs. Every person who drives a vehicle in the state will feel it, and it’s not a clearly defined benefit.”

Billy Wallace, Jr. is the political director for the Washington and Northern Idaho District Council of Laborers. He told Lens that ‘it’s a regressive tax; this will be pushed down to the people who have to drive to work every day. Let’s call it what it is – a tax on fuel.”

If passed, I-1631 is expected to increase the price of fuel by 40 cents per gallon over a 10-year period. Like the Iron Workers District Council of the Pacific Northwest, Riker says that hike would hit his members who often commute long distances to work sites.

“They don’t build in our backyards very often,” he said.

Wallace says it’s the same with his members, whose work can take them as close as Snohomish County and as far away as the Canadian border. While the carbon tax money might fund additional public transit options, he added that his members must rely on personal vehicles.

Riker stressed that he is not opposed to tax increases when the revenue is tied to specific projects. That includes public transit as well as the 2015 Connecting Washington package approved by the state legislature that added 12 cents to gas prices to pay for 16 years’ worth of transportation projects. All gas tax revenue is required to be spent on transportation as stipulated by the 18th Amendment to the state constitution.

A carbon tax is estimated to generate billions of dollars over a five-year period. In its draft Transportation 2040 and Beyond plan, the Washington Transportation Commission views a “new statewide carbon tax” as a potential source of transportation funding to help augment declining gas tax revenue due to increased vehicle fuel efficiency.

I-1631’s text authorizes the use of revenue on certain types of transportation projects, including public transit, tolling and nonmotorized transportation. However, how the money will actually be spent would be determined by an oversight board primarily composed of appointees by the governor; the only elected official on the board would be the commissioner of public lands, head of the state Department of Natural Resources.

While the initiative text creates stipulations on how much revenue must be spent on certain types of projects, Section 3 of the initiative includes a provision that says: “the board may authorize deviation from the allocations….if there are an insufficient number of interested or eligible programs, activities, or projects seeking funding or if the board otherwise determines that variance from the prescribed allocation is critically important to achieve the purposes of this chapter.”

Because of this, Riker says it’s unclear “what our members are getting out of it and what the public is getting out of it.

“The possibility is great, but another possibility is it could go elsewhere,” he added. “That is a huge problem for us in the building construction trade. We always know to the best of our ability what that gas tax is going for when speaking in support. In this one there is just too much unknown to get out there and say ‘it will fund this project and that project.’”

He concludes that the added cost to gas prices will make it harder to pass another transportation package if needed. “There isn’t a large appetite for doing multiple tax increases, and this one takes money that should be going to transportation and moves it elsewhere.”

Wallace agrees; he points to a recent U.S. Supreme Court ruling forcing Washington state to remove thousands of fish barriers in its jurisdiction. The costs for those projects are expected to fall under the state Department of Transportation’s capital budget funded through the gas tax.

“There will never be another freaking transportation package as long as this in place,” Wallace said.

 

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