Republicans wary of Inslee's carbon tax

OLYMPIA — Central Washington lawmakers have concerns after reading Governor Inslee’s proposed carbon tax plan.

The governor’s proposal would enact a $20-per-ton tax on carbon released by burning fossil fuels, increasing by 3.5 percent plus inflation every year, according to draft legislation. The tax would come into effect July 1, 2019.

A carbon tax initiative which appeared on the November 2016 ballot only received 42 percent of the vote. Only King County had a majority of voters support the tax.

Rep. Tom Dent, R-Moses Lake, said that he is not in favor of a carbon tax. Rep. Matt Manweller, R-Ellensburg, said he considers opposing the governor’s carbon tax a top priority, and is concerned about increased gas prices and state overreach.

The governor’s office projects that consumers would see gas prices around 1 cent for every dollar taxed by this proposal, around a 6-9 percent price increase by 2020. In the same year, the carbon tax would increase the average household’s electricity bill by 4-5 percent.

Republicans in both legislative houses told the Columbia Basin Herald that the projected price increases at the pump would hurt those who can least afford it.

“I’m concerned about the impact on the people, especially in rural Central Washington, who have to drive extra miles,” said Sen. Judy Warnick, R-Moses Lake.

The Association of Washington Businesses is similarly wary that a carbon tax could weigh on the finances and job prospects of Washingtonians.

“We should all be sensitive that the governor’s carbon tax would also hit middle-class families especially hard because manufacturing and trade sectors, which support good-paying, family wage jobs, could be impacted,” said Kris Johnson, president of the AWB.

Fifteen percent of funds raised by the carbon tax is earmarked for a transition assistance account that would, among other things, provide assistance to vulnerable communities and households affected by costs and job loss associated with the bill.

Vulnerable communities include those featuring low income, higher levels of unemployment, low levels of home ownership, and where energy costs or rent are a higher proportion of average income, according to draft legislation.

However, the Washington State Department of Commerce is only required to establish a plan of implementation for the transition assistance account by July, 2020, a full year after taxes would take effect. The bill lacks a clause to establish when vulnerable communities could see tangible relief, or whether they would be recompensed for the period between passage of the tax and the establishment of the transition assistance account.

Republican lawmakers are concerned at the list of industries that would be exempted from the tax. Though there is little disagreement about exempting diesel, biodiesel and aircraft fuel for use in agriculture, where smaller farms typically have low profit-margins, exemptions for ill defined energy-intensive and trade exposed facilities have made some Republican’s skeptical.

“The energy companies may not be the ones who actually pay this tax,” said Warnick.

The draft legislation does not clarify which businesses might qualify as an energy-intensive or trade-exposed facility. The WSDOC would only be required to define what facilities qualify as energy-intensive or trade-exposed by July 1, 2019, when the tax takes effect.

Rep. Mary Dye, R-Pomeroy, questioned both the benefit and intention of the carbon tax. Dye said that proper forest management would be more effective at mitigating carbon pollution than a carbon tax, and that the governor’s plan is more focused on raising tax revenue than on protecting the environment.

“I think it’s hypocritical to suggest we have to do this to save the planet and then utilize the revenue from the taxes to backfill education,” Dye said.

The Senate Energy, Environment and Technology Committee is tentatively scheduled to hear the bill at 10 a.m. Jan. 22.