Hello carbon tax friends: This week we’ve got fiscal and legislative news… and pencil in and RSVP for a Lobby Day for Tuesday Feb 23!
Revenue-neutrality update
Last week we produced an extensive set of comments on the preliminary fiscal analysis done by House finance staff. This week the official Fiscal Note came out from the Office of Financial Management. (A direct download is here, or find it from the I-732 bill tracker page.) The short version is that OFM failed to act on or even respond to any of our comments, and in fact they’re now double-counting the Working Families Tax Exemption during the first year of the policy, so OFM’s conclusion is that our policy lowers existing taxes by about $300 million more than the carbon tax generates during the first biennium (2017-2019) and by about $600 million more during the second biennium (2019-2021). We’ve produced another extensive set of comments (see PDF here, with additional files in this Dropbox folder)…
…but the most important thing is to keep some perspective:
If you’re on the right side of the political spectrum and would welcome a tax cut, you should keep in mind that our analysis continues to be that I-732 is approximately revenue-neutral.
If you’re on the left side of the political spectrum and would welcome additional government revenues, you should keep in mind that all of the OFM shortfall is because of substantial funding—almost $1.3 billion over 4 years—for the Working Families Rebate. When the Working Families Rebate was passed in 2008 it had no funding source: it was just a tax cut, like the sales tax exemption for groceries that now weighs in at over $1 billion a year. The Working Families Rebate that passed in 2008 was never implemented because of the Great Recession, but if it had your support then—and it should have because it’s a great policy—then I-732 should have your support now. Republicans tend to oppose government spending unless it’s for the military, and Democrats tend to oppose tax cuts unless they’re for low-income households… and this fits squarely in the latter category (with the additional bonus of, you know, establishing the best carbon pricing policy in the world). Plus remember that our analysis continues to be that I-732 is approximately revenue-neutral.
Legislative update
We still don’t have hearing dates set for I-732, but please pencil in a Lobby Day for Tuesday February 23… and RSVP here! Under the surface there’s been a lot of chatter about I-732 in Olympia, but for now the only public developments are introductions of place-holder “732B” alternatives by both the House and the Senate. These are place-holder bills because neither of them has any actual text, but if the details get fleshed out—a really big “if”—and if the House and the Senate can come to agreement with each other—an even bigger “if”—then both our original bill and the legislature’s 732B will go on the ballot in November. (To see how this would work, see the two-question process by which Tacoma voters approved a $12 minimum wage in November, or see I-97 from 1988.) In other news from Olympia, Senator Hobbs (D – Lake Stevens) introduced an $8 carbon tax bill.
In the news
There’s a great profile of Joe Ryan (my CarbonWA co-chair) in Washington State Wire, there’s a fine article in the Tacoma Ledger (“I-732 Compromises Correctly”), the American Prospect writes about “Will Washington Pass Nation’s First State-Level Carbon Tax?”, and Fast Company has “Washington Is Getting Close To Enacting The First Carbon Tax In The U.S.” (This piece has some incorrect reporting about events in December, but so far they’ve ignored edit requests.) Reporting from Olympia, Robert McClure has “Greens on the defensive as legislative session gets underway”. On the national front, Bob Inglis of RepublicEn.org has another great op-ed: “Donald Trump And The Strength Of Ten Grinches”. Also there’s a Scientific American editorial from December that slipped through the cracks: “A Tax on Carbon Pollution Can Benefit Business”. And there’s a new carbon tax bill in Rhode Island!
