Campaign News

The building and construction trades, which includes Architects, Engineers, General Contractors, Painters, Flooring Installers, Electricians, Plumbers, and other related vocations, will see an increase in new business and new jobs as a result of passing Initiative 732. This is because reductions in the state sales tax realized by this sector will far exceed new energy costs from a carbon tax. The tax swap proposed by I-732 reduces the state sales tax one full percentage point, effectively lowering the cost for new construction and renovation projects in Washington State, while boosting demand. 

Macro-economic analysis – Looking at the trade sector as a whole
  • Construction of Buildings, Specialty Trade Contractors and Heavy Civil Engineering Construction paid, in combination, $1.25 billion dollars in sales tax in 2015
  • Reducing the state sales tax one full percentage point creates $192 million in sales tax savings in this industry
  • The trade sector alone would need to burn 800 million gallons of diesel to create a break-even where the carbon tax applied would match the $192 million in sales tax savings
  • By contrast, a total of 656 million gallons of diesel were burned in Washington State in 2015
  • Construction trades and their customers will be big financial winners with I-732 because their sales tax savings will vastly exceed increased energy costs
Micro-economic analysis – Looking at actual data from a construction company
  • In 2015 a Seattle-based home builder constructed 22 new homes in 2015 at a cost of $14,800,000
  • Reducing the state sales tax one full percentage point would lower their 2015 construction costs by $148,000
  • This company and their sub-contractors consumed approximately 7,500 gallons of diesel to build these 22 new homes. The energy bill as a result of a $25/ton carbon tax on the energy is $1,800
  • I-732 would create a net savings of $146,200 for construction of these 22 homes
  • Passing I-732 creates a huge new savings to new cost ratio of 82X

Whether analyzing the impacts of I-732 on the building trades and construction industry in Washington State from a big picture aggregate tax perspective, or from an individual builder’s perspective, the results are clear. Passing I-732 is a huge win for the building and construction trade sector!

I-732 will reduce the cost to construct and remodel homes and buildings in Washington State, will attract more development to the State, and will increase jobs in this sector.

Given this is a clear financial win that will create new business and new jobs, it is extremely troubling that representatives of the Washington State Building and Construction Trades Council and Building Industry Association of Clark County have spoken out against I-732.

This is a tragic example of labor unions advocating against a policy that is clearly in the best interest of workers.

I-732 has been endorsed by economists, climate scientists, and political leaders on both sides of the aisle, and will serve as a model of effective climate legislation for the entire country. This is our best shot to tackle climate change for the next four years or possibly even longer. The climate can’t wait. We all have a moral responsibility to focus on carbon reduction now to protect our children and future generations by tackling climate change now, and leaving them a cleaner, healthier, safer world.