Initiative 732 is a well-intentioned measure that doesn’t quite add up. The Columbian’s Editorial Board recommends a “no” vote on the initiative, which is a proposal to create a tax on emissions for the state’s for most polluting companies while reducing the sales tax.
As always, this is merely a recommendation designed to foster discussion. We trust the ability and desire of voters to examine the initiative before casting an informed ballot.
Given the intensely important need to address climate change, Initiative 732 is deserving of such an examination. There is no doubt the earth has been warming over the past several decades, leaving whether or not human activity contributes to that as the only question; most scientists believe that it does. From that standpoint, the issue becomes one of what we should do about it, and which approaches will be most effective for dealing with the crisis while spurring economic growth rather than hampering it.
Initiative 732 would impose a tax of $25 per ton upon the carbon content of fossil fuels emitted by companies, with the tax increasing over time. This would particularly hit businesses in the pulp and paper, forestry products, and food production industries. Meanwhile, the measure would reduce the state sales tax from 6.5 percent to 5.5 percent over two years.
The initiative was designed to be revenue neutral for the state, with a reduction in sales-tax revenue being offset by an increase to taxes upon industry. Good idea, but analyses suggest that it falls short of its goal. The Office of Financial Management has estimated that state revenue would decline by $797 million during the first six years under I-732. This would pit efforts to combat climate change against public education, social services, and other necessary state expenditures. Supporters of Initiative 732 dispute these numbers, but the analyses lead to reasonable questions about how long it would take before the Legislature started inching the sales tax back toward its current level.
Meanwhile, the measure also includes an $800 million tax break for the sale of airplanes by Boeing and others, a clause that advocates say was inadvertently included.
Finally, I-732 fails to direct proceeds from the carbon tax toward bolstering a clean-energy economy. It simply transfers a portion of the tax burden from individuals to carbon-burning industries while advocating for no change in how revenue is spent. It also, realistically, would offset some of the savings for average families by generating increased energy costs.
Per-capita, Washington ranks among the nation’s most effective states when it comes to limiting carbon emissions. The state’s environmentally conscious ethos and the good fortune of abundant hydroelectricity can be credited for that status, but we must not lose sight of the fact that there always is more that can be done. Even if one does not believe that human activity contributes to climate change — again, a vast majority of scientists believe that it does — there always are benefits to be found in reducing emissions and working to ensure clean water and clean air for ourselves and for future generations.
But measures to further reduce emissions must undergo a strenuous cost-benefit analysis rather than become beholden to the notion that any strategy is a good strategy. For a variety of reasons, Initiative 732 does not stand up to that scrutiny, and The Columbian recommends that voters reject it at the ballot box.