The Senate Energy, Environment & Technology has voted to advance a modified version of Governor Jay Inslee’s carbon tax proposal, giving SB 6203 a “do pass” recommendation after a lengthy discussion February 2 on potential amendments to the bill that included concerns over the plan’s impact on the state’s business climate and protecting the revenue from misuse.
For proponents, the move represents the first big step of many toward final passage of a path to fighting climate change by reducing the state’s carbon pollution – which is already among the lowest in the nation. A recent National Review article found that if Washington were to reduce its greenhouse gas emissions to zero by 2100, it would have a .0002 degree impact on the global temperature.
Aside from that, panel members critical of the now $10-per-ton carbon tax said its backers may get less pollution, but for the wrong reasons.
“This bill could reduce carbon production in Washington state…when manufacturers leave our state,” former chair Sen. Doug Ericksen (R-42) said. “This is a “Do Not Enter” sign placed on Washington state. If you are a person in Washington state who works for a company that manufactures a product, if this bill passes, there is a very good chance you will no longer have a job.
“If anybody votes for this based upon the misguided notion that this will somehow impact climate, you’re wrong,” he added. “You can talk science; that is science. Nothing in this bill will impact climate.”
Prime sponsor and Chair Reuven Carlyle (D-36) described SB 6203 as “a work in progress,” adding that the committee should “move it forward…to explore ways that we can be responsible about the next generation of energy strategy.
“The global trend around the world is for a modest, thoughtful carbon pricing effort that invests in energy,” he added. “How we invest matters. The fundamental value of considering legislation in the legislature…is to attempt to customize in a thoughtful and a responsible way, very complex and important policies.”
Exchanges between committee members during the meeting suggests the fight on the Senate and House floor could come down to several aspects of the bill, such as where $1.8 billion in estimated revenue over the next four years will go, and whether a constitutional amendment to protect that money will be voted on before the carbon tax itself.
If passed, SB 6203 would impose the $10-per-ton tax, with a $2 increase annually until it reaches $30-per-ton. As currently written, there are roughly 56 exemptions that include commercial bakeries, poultry processing, seafood production and processing and ice cream. The state Department of Commerce would be required to submit an annual report on these exemptions as well as the economic impacts of the tax on the state.
The bill would also set up a carbon pollution reduction account for the revenue. While certain accounts would receive a percentage of that money, the multimodal transportation account would receive $100 million. The provision drew opposition and ultimately a “no” vote from panel member and Transportation Chair Steve Hobbs (D-44).
“I feel like this is a pretty sizeable gas tax increase, larger than what I did in the 2015 transportation package,” he said. “I have to be a steward of that (money), especially since we might need another investment. I think the transportation budget is already taking a hit. Maybe, hopefully there’s a chance that (we) can have further negotiations. Right now, there is no way that I can do this….”
Among those in favor of the bill was Sen. Tim Sheldon (D-35), the sole Democrat in the now-defunct Majority Coalition who still caucuses with the Senate Republicans. He told colleagues that the legislature needs to act to prevent the passage of ballot initiatives such as I-937, also known as the Energy Independence Act. Approved in 2006 by 52 percent of voters, Sheldon called it “a disaster for our state.”
“I think we’re really at a crossroads here,” he added. “Carbon is a huge issue and…I think this is just one step in a long, long process.”
However, Inslee’s line-item veto last year of a business and occupation (B&O) tax rate for manufacturers contained in the 2017-19 operating budget could come back to haunt Democrats during negotiations. That unease was expressed in an unsuccessful amendment offered by Ericksen to deter “cherry-picking” of bill provisions by Inslee.
Republican Deputy Floor Leader Brad Hawkins (R-12) offered the lone minority report “without recommendation.” One of his reservations pertained to a constitutional amendment tied to the bill. “There could be a scenario at the legislative level where the carbon bill passes with a simple majority; the constitutional joint resolution receives overwhelming support but doesn’t reach the two-thirds support in both houses. That is a scenario that’s possible.”
Carlyle said that issue could be resolved by introducing the latter before the former.
SB 6203 has now been referred to the Ways and Means Committee. No public hearing has yet been scheduled.