The second special session down in Olympia called by Gov Inslee last week to get our legislature to finalize the budget and, perhaps, at long last, to fund education adequately. The legislators are unlikely to get down to business until after the State’s revenue forecasts are released on June 20. Expect a frenzy of negotiation then because they only have ten days before they risk a partial state government shutdown on June 30.

Raising revenue is the nub. Democrats are putting forward both a capital gains tax and a carbon tax… Republicans like neither, but may hold their noses and pick one. It is unclear what the carbon tax might look like. At least four carbon tax bills have been introduced (Fitzgibbon’s 1646, Palumbo’s 5930, Hobbs’ 5385, and Inslee’s), and these bills seem to be in a state of constant revision. But, here are key questions to consider with whatever tax might be in play during this ten day frenzy.

  • Does the tax provide funding for education? This will drive much negotiation. Fitzgibbon’s bill does not fund education, so it’s less likely to get votes than Palumbo’s or Inslee’s which fund education to some degree. Note: some climate activists believe that carbon tax revenue should only be used for clean energy investment, just transition for workers, and climate change preparedness. By funding on-going expenses, like education, we set up an incentive to perpetuate this stream of revenue and the industry that provides it. On the other hand, schools desperately needing funding.
  • How high is the tax and how does it escalate? Most of them start at $15 per ton. Inslee’s starts at $25. Palumbo’s tax escalates annually til it maxes out at $30. Fitzgibbon’s escalates to a higher point and aims at identified carbon reduction targets.  The question of escalation and targets has vexed the climate activist community. Many feel that none of these taxes are anywhere high enough, and the tax should start at about $100 per ton, and they do not want to support a tax that they see as a false solution. Others feel that we need a victory on a carbon tax and therefore we must do something politically feasible which these bills represent.
  • How many loopholes are there? All of them have loopholes. A common loophole is for EITE’s (Energy intensive trade exposed industry) so these companies don’t move their facilities out of state. Other bills have loopholes for exported energy, bio-fuels, or aviation and shipping fuel. Not surprisingly, many climate activists do not support loopholes.
  • Does the bill eliminate the Department of Ecology’s power to regulate greenhouse gases? Palumbo’s bill eliminates the Clean Air Rule, Ecology’s effort to regulate GHG emissions from select industries. The other bills don’t.
  • How is the revenue dedicated? Although some of these bills fund education, many also fund climate programs, including: clean energy investment, just transition for displaced workers, climate preparedness for disadvantaged frontline communities, fighting wildfires, and water resource allocation. Some require new State bureaucracy, others use existing programs. Some climate activists believe that good investments of carbon tax revenue is more consequential than the tax escalation and targets issue.

So, if you have opinions on these questions, stay tuned, and be ready to send comments to your legislative caucus during this budget negotiation frenzy.

If a carbon tax is not passed, then the activist community will very likely move ahead with an initiative. The questions posed above will still be with us, and let us work hard on developing consensus, so we can move ahead unified.

Sincerely,

Andrew