Voters Reject Washington Carbon Tax Proposal

For over 50 years, Bloomberg BNA’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

By Paul Shukovsky

Nov. 9 — Washington voters definitively rejected what would have been the nation’s first direct carbon tax, according to early election returns in this vote-by-mail state.

Initiative 732 would have imposed a carbon emission tax on fossil fuels while simultaneously reducing both sales taxes and business and occupation taxes. Late-night returns Nov. 8 showed 58.5 percent of voters rejected the measure and 41.5 percent favored it. About 1.9 million votes had been counted; there are 4.3 million registered voters in the state.

The tax would have been levied on the carbon content of fossil fuels sold or used in the state and of electricity consumed in the state, including power imported from elsewhere.

Yoram Bauman, founder and co-chair of the initiative campaign, conceded defeat late Nov. 8 in an e-mail: “While we did not pass the nation’s first carbon tax, many states around the country are looking at I-732 as a model and we expect a nationwide movement to take root in the years ahead.”

‘Awakened a Sleeping Giant.’

Bauman told Bloomberg BNA in October that he had sought to avoid ideological arguments over whether the carbon tax would expand or contract government by crafting a law with the intent to be revenue neutral. It would have phased in a one percentage point reduction in the state sales tax and implemented a partial sales tax exemption for low-income families to address inherent regressivity—all paid for by a phased-in tax on carbon emissions.

But the approach fractured the state’s environmental movement, and many joined with organized labor and minority-rights organizations in preferring an approach that would spend revenue collected from putting a price on carbon on investment in the creation of a clean-energy economy.

At an election night union rally in Seattle, Washington State Labor Council Secretary-Treasurer Lynne Dodson told Bloomberg BNA that the defeat of I-732 provides an opportunity to find climate change solutions “that invest in a clean-energy economy. They identified the right problem, just not the right solution. We have to be investing in clean-energy solutions—in solar, in wind. We also have to make sure that whatever solution we have, that we are not leaving behind workers and communities of color that have already been most impacted by climate change.”

Audubon Washington, the state office of the National Audubon Society, was the only major conservation organization to support the initiative. In an election night e-mail, Gail Gatton, the group’s executive director, wrote: “While tonight’s outcome is disappointing, Audubon members and supporters all across Washington rose to the occasion and said yes to a cleaner, better future. We have awakened a sleeping giant, and we look forward to continuing the fight for commonsense climate solutions for birds and for people.”

Investing in Post-Carbon Economy

The Sierra Club, which didn’t support the measure, said in a Nov. 8 e-mail: “Voters of Washington State rejected a measure that would have put a price on carbon, known as Initiative I-732, because it lacked direct investments in climate mitigation, green jobs and communities hardest hit by climate change. We must learn from this experience and work together to deliver solutions that invest directly into climate mitigation, clean energy jobs and communities long exploited by the fossil fuel industry.”

Conservation groups working through a coalition called the Alliance for Jobs and Clean Energy are discussing such a solution for proposal to the state Legislature in the upcoming session that would not only put a price on carbon, but also invest in a post-carbon economy.

To contact the reporter on this story: Paul Shukovsky in Seattle at PShukovsky@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

For More Information

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.