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April 12, 2021

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Donnelly: Proposed bills chart wrong course for state

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Washington’s economy needs some TLC. Last year’s employment decline was deeper than during the Great Recession. Recovery is fragile. Yet our Democrat-controlled Legislature is advancing four bills that would add costs and taxes, impose more government controls, and invent arcane new regulations without a rigorous look at either costs or effectiveness.

As background, about half of businesses polled in a survey cited in the March 30 Columbian are pessimistic or already closed. For families, statewide demand for Basic Foods and Temporary Assistance programs are up by 20 percent since last year, according to the state Commerce Department. Lawmakers’ priorities should skew toward enticing new entries to our economy, fostering businesses expansions, and keeping family costs low.

Before reviewing the top four legislative bloopers in 2021, let’s acknowledge that neither party is immune from legislative missteps. In adjoining Idaho, Republican Congressman Mike Simpson believed 2021 was the perfect time to advance his expensive, unproven plan to remove the lower Snake River dams.

But back to events in Olympia. Three of our selected misguided measures would raise the cost of energy, the element essential to virtually all human activities. The Pacific Northwest is blessed with a reliable, affordable portfolio of hydropower, wind, natural gas, and solar, yet these legislative proposals tinker with what works, narrowing the choices. They require massive transformations, increasing costs and uncertainties.

HB 1084, No. 4 in our ranking, bans natural gas infrastructure for space and water heating in new residential and commercial construction. Construction projects on existing buildings would be required to remove natural gas systems. Given that natural gas heats 80 percent of the state’s commercial floor space and more than half of single-family homes, 1084 would impose a draconian transformation.

The Low-Carbon Fuel Standard for transportation fuels is No. 3 in our ranking. HB 1091 aims to reduce greenhouse gas emissions by 20 percent below 2017’s by 2035, and more in future years. It creates new bureaucracy to track a Clean Fuels Program. Makers of gasoline and diesel, and by extension their customers, would be subject to the costs of extensive tracking, reporting and compliance. The burden would fall heavily on families and businesses by raising the cost of gas over time.

Which brings us to cap and trade, No. 2 in our ranking. SB 5126 would establish a declining cap on CO2 emissions and an auction process for carbon credits. Manufacturers would be forced to revamp processes, buy credits, or move out of the state as the cap on carbon declines over time. When combined with LCFS (our No. 3), it is estimated to raise the price of gasoline by 41 to 50 cents per gallon in 2028, and by 56 cents for diesel. An additional gas tax increase is likely in the bill, according to the Washington Policy Center.

Finally, No. 1 in our ranking is the capital gains tax. Likely to be regarded as an income tax by the IRS, proponents hope the ensuing legal fight would somehow give them an open road to a progressive income tax they have long coveted, according to their own writings. State revenue is growing, and the tax is not needed.

The capital gains tax is the ultimate slippery slope to taxing the middle class. Billions of dollars would flow from the private sector to government. As explained by Orion Hindawi, CEO of Tanium, newly moved to Washington from California, “the Governor (Inslee) needs to understand that every time he says capital gains tax, he loses 10 companies.”

Indeed. These bills would take us in the wrong direction.

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