The office of Governor Inslee announced details of its much awaited carbon tax proposal this morning before the State of the State address. Inslee had previously teased the idea of a “carbon pricing plan” during his supplemental budget announcement in December, but had yet to offer any specifics before today. Sponsored by Sen. Carlyle and Rep. Fitzgibbon, the tax bill would impose a $20 tax per ton of carbon dioxide on fossil fuels, including those that generate electricity.
Starting on July 1, 2019, the proposed tax would start at the $20 per ton rate and would then increase by 3.5 percent plus inflation annually. Inslee’s office estimates it will raise $1.5 billion in its first two years, and approximately $3.3 billion over the course of four years.
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The bill lays out specific revenue allocations for money raised by the tax. Fifty percent of the revenue would go toward investing and incentivizing Washington’s transition to a clean energy economy. Thirty five percent would go toward a “water and natural resources resiliency account,” which would include updates to flood and storm water management infrastructure and improving forest health practices. The last fifteen percent would go toward supporting vulnerable, low-income communities that may be immediately impacted by the taxation of carbon.
On several occasions, Inslee has mentioned using the carbon tax as a means to restore state reserves that could be used to move the McCleary timeline up to 2018. However, that funding mechanism is not specified in the bill, and would only be determined while negotiating Inslee’s supplemental budget.
In his State of the State address, Inslee spoke of bipartisan support for the carbon tax, as well as support from various businesses and stakeholders across Washington.
“Support for enacting a price on carbon is growing. Members of the business, tribal, environmental, and labor communities from across our state are coming to the table to talk about carbon pricing.”
“Labor leaders see the job potential in growing our clean energy economy. Our environmental leaders and tribes see the urgency acting now to curb carbon pollution. They all agree that putting a price on carbon this year is the right thing to do, and have committed to working with me to get that accomplished.”
Inslee’s proposal also received support from environmental groups. Kyle Murphy, Executive Director of Carbon Washington, said,
“We support effective, equitable, economically sound, evidence-based, and politically feasible carbon-reduction policies. We are encouraged by what we heard outlined in the Governor’s carbon tax proposal today, and we will continue to review and provide analysis on it in the coming days.”
“We believe effective climate policy requires bipartisan support, and the Governor’s proposal offers a great opportunity to begin overdue conversations on both sides of the aisle — as well as from Washington’s environmental, business and progressive groups — about how to move forward.”
However, in a press conference following the State of the State address, members of the House and Senate Republicans were very critical of the proposal.
“While I appreciate the effort, this is extremely tax heavy and policy short,” said Rep. Kristiansen. “If we’re going to deal with the carbon issue, let’s talk about the policies related to dealing with carbon more than we’re talking about the taxes. We’re also talking about increasing taxes to the level where our middle class are going to be the ones get hit absolutely the hardest on this. So yes, I think all of us here should have a tremendous amount of concern about this regardless of your party affiliation or where you live.”
Rep. Kristiansen also mentioned an upcoming hearing on an alternative bipartisan bill that he says is not tax heavy, but still deals with reducing carbon.
“It’s a pretty big piece of legislation. But it was put together by Democrats and Republicans from the House of Representatives. It’s got bipartisan support and it’s policy heavy, not tax heavy… it really deals with the issue of the carbon, not so much creating a new tax source that would be a depleting source of revenue.”