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Washington State Carbon Tax Proposal Nears November Ballot

A proposed statewide measure to create a carbon tax (I-732) is likely headed for the November ballot as the Washington state legislature has failed to act on the signature-certified proposal and is scheduled to adjourn March 10.

The proposal, spearheaded by the activist group Carbon Washington, would have a phased-in 1% reduction of state sales and business/occupation taxes, along with a phased-in $25/metric ton tax on fossil fuel emissions (see Daily GPI, Jan. 7). I-732 is designed to be "approximately revenue neutral," according to its backers, but some state lawmakers and other organizations have questioned that claim.

If the legislature does not act, the measure will be on the statewide ballot in November, a staff member for the Senate Energy, Environment and Telecommunications Committee told NGI Monday. The measure would be phased in over two years and would be the first carbon tax in the nation.

State lawmakers also could adopt the measure as written into law, or approve an alternative, which would result in both the citizens' initiative and the legislature's measure on the November ballot. There is no indication state lawmakers will act. Sen. Doug Erickson, chair of the energy/environmental committee, has indicated that he thinks the measure, combined with other new rules, would hurt businesses and taxpayers in the state.

Erickson's committee held a hearing on I-732 earlier this month, but no action has followed, and none was scheduled as of Monday, the committee staff member said.

I-732's wording indicates the measures intend is "to encourage sustainable economic growth" with a phased-in 1% reduction of existing taxes on individuals and businesses and the establishment of the tax on fossil fuels "sold or used in the state." That includes all of the electricity used in the state that has been generated by fossil fuels.

Erickson is supporting alternative legislative proposals, including SB 6248, which was passed by the state Senate earlier this month. The bill is aimed at creating "an orderly framework" for utilities to decommission coal plants if federal mandates make that necessary.

Contrary to some opponents' perceptions, SB 6248 does not force the shutdown of coal-fired generation used by the state's utilities, nor does it impose deadlines for those plant closings, Erickson said.

Similarly, Erickson has proposed legislation (SB 6545) to create a legislative task force to consider "tax, regulatory and environmental policies" to advance the state's clean energy, lower carbon footprint. "As manufacturers look to ways to go green, they need to know they can come here and have a huge head-start," he said.

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