Washington Legislature

Washington to Vote on Carbon Tax

Washington could become the first state in the nation with a carbon tax if voters pass Initiative 732 in November. But state budget analysts warn it could amount to a loss of more than $900 million in tax revenue over a four-year period. 

Washington could become the first state in the nation with a carbon tax if voters pass Initiative 732 in November. But state budget analysts warn it could amount to a loss of more than $900 million in tax revenue over a four-year period. 

Washington state could find itself at the cutting edge of taxing carbon emissions with Initiative 732 heading for the ballot this fall. But opponents and budget analysts fear the bold plan goes a step too far.  

The measure would create a new tax of $25 per metric ton of carbon burned in fossil fuels, including gasoline, natural gas and coal. It also would also shrink Washington’s sales tax rate by one percentage point and virtually eliminate the business and occupation tax for manufacturers.

If the initiative passes, Washington will become the first in the nation to tax carbon emissions as other states look on.

“I-732 encourages cleaner energy solutions by shifting the tax burden onto carbon pollution and away from regressive and burdensome taxes that hurt families and businesses,” says Carbon Washington, the group behind the initiative.

Sounds great. So, what’s the problem? Well, as always in the process of creating new taxes and changing the rates of old ones, you have to look at the broader picture. And the big question surrounding I-732 comes down to its fiscal impact, which thus far has been defined by polar opposite projections from either side of the initiative battle.

Carbon Washington argues the tax would ultimately be revenue-neutral, bringing in an estimated $1.7 billion a year while returning roughly that much to taxpayers by lowering the sales tax. State budget analysts with the Office of Financial Management, on the other hand, estimate the tax change would amount to about $915 million in lost revenue for Washington over a four-year period, a painful gut punch for a state where annual budget shortfalls have become the norm.

Yoram Bauman, the founder of Carbon Washington, fired back at the OFM in February, saying the agency miscalculated the fiscal impact of I-732. Bauman added that OFM analysts are not carbon tax experts.

However, the Department of Revenue and legislative budget analysts also project I-732 would create a net revenue loss for the state.  

Several major state organizations have come out against the initiative, including the state Democratic Party, the Washington State Labor Council and the International Association of Machinists and Aerospace Workers. Ultimately, they argue that it’s the worst time to experiment with a change that could jeopardize so much tax revenue.

“At a time our state is struggling to fund basic services – including public schools, mental health facilities and many other essential services – I-732 would send Washington in the wrong direction and create more damaging austerity choices,” Labor Council President Jeff Johnson said.

Numerous environmental activist groups support I-732, but it's also drawing criticism from some environmentalists. Several factions of Democrats in the legislature and county-level Democratic organizations across the state also are lining up behind the initiative, which supporters tout as an economic stimulus that will do something concrete to address climate change without hurting the middle class.

Lowering the B&O tax for manufacturers would help keep living wage jobs in Washington, proponents argue. The group anticipates reducing the sales tax would save hundreds of dollars a year for the average household in Washington. The initiative would provide up to $1,500 a year in tax rebates for about 400,000 low-income households across the state, Carbon Washington says.

The legislature had a chance this winter to alter the carbon tax proposal and address revenue concerns. But in a short session ruled by more immediate budget woes and questions about adequate education funding, that simply didn’t happen. It also didn’t happen during the special session that ended March 29.

Now, it’s up to the voters to decide what to do. Given Washington voters’ recently muddled history on tax reform measures, it’s anyone’s bet as to how this one will turn out on Election Day. 

Justin Runquist is CFM’s communications counsel. He is a former reporter for The Oregonian, The Columbian and The Spokesman-Review. Away from the office, he’s a baseball fanatic with foolhardy hopes that the Mariners will go to the World Series someday. You can reach Justin at  justinr@cfmpdx.com and you can follow him on Twitter at @_JustinRunquist.

The Legislative Trail from Salem to Olympia

Passing bills in the Oregon and Washington legislatures is similar, but markedly different in key ways, such as a power Rules Committee and permitting floor amendments in Washington. But Oregon knows how to adjourn on time; Washington not so much.

Passing bills in the Oregon and Washington legislatures is similar, but markedly different in key ways, such as a power Rules Committee and permitting floor amendments in Washington. But Oregon knows how to adjourn on time; Washington not so much.

Early adjournment of Oregon's short 2016 legislative session provided an opportunity to hop on a train and see the waning days of the Washington Legislature in Olympia. I was looking for similarities and differences, and I found plenty of both. 

Generally, Oregon's and Washington’s legislatures are similar. They are both “citizen” legislatures. They meet annually, with longer sessions in odd-numbered years and shorter ones in even-numbered years. They also tend to wait until the last minute to pass major bills, after extended periods of political jockeying and horse-trading.

Now, here are are some key differences I noticed. 

Washington's Rules Committee wields real power: All Washington policy bills must go to through the Rules Committee before reaching the floor. This gives the Rules Committee significant authority, ultimately deciding, on almost all of the bills, whether they die or go to the floor for a vote. Oregon also has a politically driven Rules Committee, but leadership only sends select bills there for review – or to wait until a political compromise is worked out behind closed doors. 

Washington’s Senate operates more like Congress: Washington has a lieutenant governor, who presides over the Senate but only can vote in case of a tie, much like the vice president. Washington’s lieutenant governor is elected separately from the governor and serves with no term limit. Oregon doesn’t have a lieutenant governor. The independently elected secretary of state is next in line, as we saw last year when Gov. John Kitzhaber resigned and Secretary of State Kate Brown replaced him. Oregon’s Senate selects its own presiding officer from its membership, who votes on all bills just like his or her colleagues.

Floor amendments are permitted in Washington, but not in Oregon: Washington lawmakers can and often do offer floor amendments. On the day I visited, a public school bill that had been jerked to the House floor without going through the Rules Committee faced a floor debate over 27 separate amendments. After a lengthy debate, eight amendments passed, including one that replaced the entire original bill. Oregon lawmakers can petition to have a bill pulled out of committee, but it rarely happens. Once a bill reaches the Oregon House or Senate floor, it is not subject to amendment. Lawmakers can defeat a bill, vote to send it back to committee or vote for or against a minority report, if one is approved in committee. Most of the time floor votes on “amendments” are stalling tactics in Oregon. Overall, the committees have more sway in the Oregon legislative system. 

Oregon gets out on time, Washington does not: In six of the last seven years, Washington has developed a habit of missing constitutionally established deadlines on the budget, forcing one or more special sessions each time. Again this session, the Washington Legislature fell short of reaching a budget agreement by Thursday at midnight and went into a special session almost immediately. Governor Jay Inslee vetoed 27 bills as punishment for not reaching a budget deal in time. The intention behind his actions is to stop the cycle of consistently late budgets.

In Oregon, experienced legislative leaders have been able to adjourn early, including in the shorter even-year sessions during which Oregon has 35 days compared to Washington’s 60 days to hammer out bills and adjust the budget. Washington, unlike Oregon, has tried to skate around a state Supreme Court ruling that the Legislature inadequately funds public schools, which puts knots in the budget process.

Seeing the differences between legislating in Salem and Olympia firsthand was insightful. It was a reminder that the intricacies of how a bill becomes a law can vary from state to state and from bill to bill, but it’s never quite as simple as the Schoolhouse Rock interpretation of how a bill becomes a law.