Initiative 732 would add a tax on carbon emissions while at the same time cut sales and business taxes.
While we agree that reducing pollution is a worthy goal, this particular initiative is surrounded by too many uncertainties and easily could create more hardships for businesses and families than proponents intended.
We oppose I-732, also known as the Washington Carbon Emission Tax and Sales Reduction measure.
The plan would impose a tax at $15 per metric ton of carbon emissions in July 2017, $25 in July 2018 and then gradually increase the tax each year until it reaches $100 per metric ton.
Certain businesses like those in forestry, food processing and fuel distribution likely would bear the burden more than others. Taxes would be phased in more slowly for nonprofit transportation providers and farmers, but that is little comfort to those working in those industries.
I-732 supporters say the added tax would be offset by lowering the state sales tax from 6.5 percent to 5.5 percent and reducing the business and occupation tax rate. The idea was to create a “revenue-neutral” formula that did not increase nor decrease state revenues, and would make the initiative acceptable to both anti-tax conservatives and environmentalists.
But that didn’t happen.
The state Office of Financial Management has estimated that state revenue would decline by $797 million during the first six years if I-732 were approved. Proponents of the measure don’t agree with that estimate, but the concern is enough that Gov. Jay Inslee — who is a strong supporter of reducing carbon emissions in our state — is opposed to I-732.
That kind of lost revenue would be disastrous as the state tries to meet the demands of funding education and social services.
In addition, the timing of this initiative is all wrong.
Just recently, the state Department of Ecology finalized its Clean Air Rule, which requires large industrial polluters to gradually reduce carbon emissions over time. The change affects power plants, oil refineries, pulp and paper mills and many other industries currently using fossil fuels. Estimates are that it could cost millions of dollars to implement.
The idea of businesses being forced to comply with the new Clean Air Rule and a possible added tax through I-732 is too much.
The Department of Ecology has jumped ahead with its plan to reduce carbon emissions, and we need to see how this affects industry and the state economy before we compound the situation with I-732.
Scientists, environmentalists and state officials are right to be concerned about climate change and how we can reduce carbon emissions to protect our health and the health of our planet.
But the approach must be balanced. I-732 tips too far and likely would cause financial harm in the short-term.
In light of concerns over its uncertain economic ramifications, as well as the new state carbon emissions rule, we think I-732 is the wrong approach.
The Tri-City Herald opposes I-732, the carbon tax proposal.
Look for our recommendation Thursday in the races for state lands commissioner and state insurance commissioner.