Democrats likely to propose new taxes

OLYMPIA — Washington is about a billion dollars short of adequately funding public schools as required by the 2012 McCleary decision. Lawmakers are struggling to agree on where to find that money, even within their own parties.

While Democrats have suggested new taxes to help fund schools and other state-funded programs, it is unclear what the party has the political will to vote on while in the shadow of the 2018 elections.

Gov. Jay Inslee at an AP Legislative Preview Thursday said he wanted to see a carbon tax proposal finalized during the current session.

A carbon tax, which would tax per ton of carbon released by burning fossil fuels, failed a citizen initiative in 2016 when it garnered only 42 percent of the vote. The proposed tax was revenue-neutral in the hopes of assuaging the concerns of deficit-hawks, dividing some climate change activists who felt the initiative didn’t do enough to invest in renewable energy.

Now the governor is trying to pass a carbon tax through the legislature.

Inslee suggested that Washingtonians will be more open to a carbon tax due to growth in clean energy businesses, including Moses Lake’s production of carbon fiber, which is used in lightweight, fuel-efficient vehicles.

Senate Majority Leader Sharon Nelson, D-Maury Island, said that some members in her chamber were “actively looking at a carbon.”

“Climate change and addressing carbon is the biggest issue for Millennials,” said Nelson. “They know that our planet is warming; they know that we need to make changes.”

Yet while Nelson said that she is hopeful that Democrats can make progress on a carbon tax, she emphasized the difficulties in doing so during a short session.

Senate Minority Leader Mark Schoesler, R-Ritzville, said that the carbon tax will disproportionately hit different parts of the state. Schoesler was also concerned that unless the tax was put into the state constitution, lawmakers could bait-and-switch any proposal with higher rates in coming years.

“I doubt anyone will be willing to put it in the constitution where rates will be set,” Schoesler said. “Unless it’s in our constitution, I doubt the safegaurds are there to defend our constituents from onerous taxation.”

House Minority Leader Dan Kristiansen, R-Snohomish, questioned whether the carbon tax proposal was really intended to benefit the climate.

“Is the tax about the carbon or about the money?” Kristiansen said, “If all this is trying to do is raise more money, our priorities aren’t in line. This is tax-heavy and policy-short.”

In 2017, Republicans compromised on policies they strongly rejected at the beginning of the legislative session, Inslee said, including on Washington’s largest transportation package in history.

“There are many things that Republicans want funded,” Inslee said. “They might come to see there’s value in funding those things by using some carbon tax money.”

Democrats voiced greater uncertainty regarding a capital gains tax, for which Inslee has pushed since the writing of 2015-2017 capital budget.

“Some members in my caucus have serious concerns about the volatility of a capital gains tax,” Nelson said.

Both the Senate and House minority leaders said they saw no interest in a capital gains tax in the Republican caucuses.

The future of a carbon tax is not necessarily more certain. Nelson expressed some doubt that Democrats would be able to push either tax through the legislature this session.

“We’ll be taking a look at (a carbon tax) and certainly talking about capital gains, but in a 60-day session, I’m not sure we’ll be able to move forward on either,” said Nelson.

Both Inslee and Speaker of the House Rep. Frank Chopp, D-Seattle, said that citizen groups are poised to push a carbon tax initiative if the legislature fails to pass something during the session.