Proponents of I-732 sold the initiative as revenue neutral. In exchange for a $25 per ton tax with annual escalators, the state sales tax would have dropped from 6.5 to 5.5 percent. It would also enable lawmakers to eliminate the B&O tax on manufacturers — the hardest hit business sector.
Even with those concessions, the Office of Financial Management in Olympia estimated an $800 million drop in state revenue collections. Meanwhile, the average family would pay more than $448 per year in higher gas taxes and heating and electric bills.
If the carbon tax is enacted to club manufacturers and utilities into compliance, it is unnecessary.
Association of Washington Business President Kris Johnson wrote in October that while Washington’s population has increased 43 percent since 1990 and the economy has grown by 260 percent, carbon emissions have dropped by 18 percent, according to the EPA. So the trend is going in the right direction without a carbon tax.
A state “ONLY” tax on carbon emissions places our manufacturers at a significant competitive disadvantage. Particularly hard-hit are rural counties where unemployment remains stubbornly high. Many of those communities have pulp and paper mills, refineries and food processing plants which provide good paying jobs with benefits.
If there is to be a carbon tax, it should be uniform and enacted by Congress. A national tax would even the playing field and not give South Carolina, for example, a competitive advantage over Washington.
Our economy is finally trending upward. Our state’s Economic and Revenue Forecast Council recently projected we will collect $571 million more than originally expected through the middle of 2019.
There is another way to balance the budget with current taxes and add $3.75 billion to our public schools satisfying Washington’s Supreme Court mandate on adequate funding schools. It also involves restructuring the way public education is offered and deserves an opportunity to work.
The state Senate’s budget increases spending by $4.8 billion over the current biennium without Inslee’s higher taxes. The total budget would be $43.3 billion for 2017-19.
Our state is already an international environmental leader in reducing greenhouse gases caused by human activity. That is something for every Washingtonian to celebrate.
Washington is making solid progress and we have the foundation on which researchers and innovative entrepreneurs are encourage to make future improvements to our environment. So, why put our state’s economy, jobs and tax collections at risk?
Don Brunell, retired as president of the Association of Washington Business, is a business analyst, writer, and columnist. He lives in Vancouver and can be contacted at TheBrunells@msn.com.