Carbon Fee Hurts Business and Families

Give Gov. Jay Inslee and backers of Initiative 1631 credit. They are persistent in their quest to invoke a fee on carbon emissions. Voters will decide its fate on Nov.6.

Since Inslee was first elected, he pushed to reduce CO2 discharges---a laudable goal. Two years ago, carbon initiative backers drafted a “revenue neutral” ballot measure which voters rejected by a 59-41 percent margin. Today’s Initiative 1631 simply adds a new fee without cutting any state fee or tax, particularly on gasoline or diesel.

For soccer moms commuting to work and driving kids to after school practices; and, for small produce company owners dispatching trucks to deliver fresh fruits and vegetables to local supermarkets, the increased costs put a strain on their bank accounts.

I-1631 sets up an appointed commission with a nebulous mission to spend the money under some general guidelines. The politicians are off the hook with their constituents for votes to approve new bureaucracies, taxes and fees.

Furthermore, assessments on carbon emissions automatically increase each year. Under the initiative which takes effect in 2020, a $15 a metric ton assessment on CO2 goes into effect. That charge ratchets up $2 per ton annually plus inflation until it hits $43 a ton by 2030.

Washington’s Office of Financial Management estimates the carbon tax would raise over $610 million in its first year and jump to $761 million by 2023. OFM pegs the costs to consumers and businesses at $2.3 billion over five years mostly in higher electric and natural gas bills.

The Washington Policy Center reports the average household would see an annual cost increase of between $234 and $305 in 2020. Over the next decade its increase range is between $672 and $877.

Soccer moms and delivery companies would feel the blunt of the immediate 14-cent a gallon gas tax. Considering Washington motorists already pay nearly 68-cents a gallon in federal and state gas taxes, the added cost from the initiative over 15 year is projected to be 57-cents a gallon.

According to AAA-Washington, the average cost of gallon of gas in Washington State is now $3.44 compared to the national of $2.91.

Last May, Mark Zandi, chief economist for Moody’s Analytics, told Politico: “Gas prices means less today than they did 20 years ago, but they still mean a lot, especially to those folks living on the margins in lower and lower-middle income groups.” The same applies to small business owners.

“Washington businesses are already among the greenest in the world and they continue to look for new ways to reduce their carbon footprint,” Association of Washington Business President Kris Johnson added. “This initiative will do little to reduce global carbon emissions while placing Washington employers, particularly small businesses, at a competitive disadvantage with other states and regions that won’t have to pay the higher energy costs.”

Collectively, we benefit from lowering the volumes of carbon and other greenhouses in our atmosphere. Similarly, we need to insure that Washington business, farmers and families are not punished with exorbitant energy bills and steep increases in consumer costs.

Establishing a new state agency governed by non-elected 15 member board to dole out billions with no specific responsibility to achieve emission goals is a bad idea. Elected officials directly accountable to the voters should be in charge.

Finally, backers of a carbon fee need to look at revenue-neutral proposals. A good place to state is lowering gas taxes simultaneously with implementing carbon taxes. Then we should streamline the administration of carbon programs through existing state and local agencies. In essence, put the notion of a new agency on ice permanently.

(DON C. BRUNELL is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at [email protected]).