Repeal the “Climate Commitment Act” and its “cap-and-tax” program

Initiative 2117

Initiative 2117 would repeal “cap and trade” – known officially in the Legislature as the Climate Commitment Act (CCA). Senate Republicans have given it a more accurate moniker — cap-and-tax.

Senate Republicans also call it a “hidden gas tax” because so much of it rides on the backs of anyone who buys gasoline. That means pretty much all of us, including those with lower incomes barely making ends meet.

Now that this initiative has been certified, the Legislature should fulfill its constitutional duty and give this measure its highest priority, over and above everything except appropriations bills. We believe the full Legislature should be allowed to vote on it. We say the Legislature should pass it.

Background

The so-called “Climate Commitment Act,” passed in 2021, taxes Washington consumers and industries to pay for government programs that supposedly reduce greenhouse gases. It requires industries that emit carbon to purchase “credits” under an auction system managed by the state.

As of January 2024, this program amounted to a $1.8 BILLION hit to our economy and the people of our state.

Since it the Legislature passed the CCA and its cap-and-tax program, drivers around Washington have been forced to pay much more for gasoline than in nearly every other state except California and Hawaii.

According to AAA’s state-by-state gas price averages, Washington’s average gas price as of January 16, 2024, was $4.01 a gallon. At that time, only three states had gas above $4/gallon – Washington, Hawaii, and the most expensive — California.

Meanwhile, 47 states and the District of Columbia had average gas prices below $4. The national average was $3.07/gal. Washington’s gas was $0.94/gal more than the national average. The lowest price was $2.56/gal in Oklahoma.  Washington’s price was $1.45/gal, which was more than that in Oklahoma.

Besides being two of the only two states with the highest gas prices, Washington and California also are the only two states with “cap-and-trade” programs, and the other high-cost state – Hawaii – is in the middle of the Pacific Ocean – 2,000 miles from the U.S. mainland.

Governor Jay Inslee – who said “cap-and-trade” would raise gas prices by only “pennies…if any” — and legislative Democrats have done nothing to reduce the higher gas prices. While the governor made his claim that “cap-and-trade” would, at most, cost pennies, his chief policy advisor told members of the Senate Environment, Energy & Technology Committee that a “High Carbon Price” scenario with a CO2 price of $52 per metric ton would increase gas prices by 44 cents per gallon.

His office knew all along the impact would be in line with what Republicans, the Washington Policy Center, and an economist at the Department of Transportation projected.

Low-income people have been hit especially hard since they typically must devote a larger portion of their income toward gas and transportation because of where they live, especially in rural areas.

Higher gas prices were just the beginning. This program is driving up the cost of EVERYTHING that we buy in a store or have delivered to us. Cap-and-tax is one of the big reasons the cost of living in Washington is skyrocketing.

For what? This program won’t do anything to affect worldwide climate change. Washington produces two-tenths of one percent of world greenhouse gases. Anything we do here is wiped out by emissions increases in China, India and the Third World.

We have no problem with the idea of transitioning to cleaner energy sources, but this is something that should occur naturally, over time, driven by market forces and the advance of technology. The CCA goes about it the wrong way.

Washington Policy Center says…

Proposed House budget promises $200 checks,
but only if voters keep the CO2 tax

 

By Todd Myers, Director
Center for the Environment
Washington Policy Center

 

If House and Senate budget writers get their way, some Washington residents will receive $200 checks this year using revenue from the tax on CO2 emissions – but there are some interesting conditions.

  • The Senate proposal requires checks be sent in 2024.
  • The House version cancels some payments if voters support Initiative 2117 and repeal the tax on CO2 this fall.
  • Both budgets require utilities and organizations that send the payments to use government-approved language when they are delivered.

These restrictions clearly have an eye on this November as voters decide whether to pass Initiative 2117 which would repeal the state’s climate policy known as the Climate Commitment Act.

Section 130 (27) of the Senate Democrats’ supplemental budget and Sec. 130 (29)(a) of the House supplemental budget would provide one-time vouchers of $200 per household from the Climate Commitment Account, the budget funded with revenue from the CO2 tax. The amount is not related to actual expenses incurred by households due to the CO2 tax. Instead, the checks would go to all qualifying low- and moderate-income residential utility customers.

The Senate budget requires utilities to send the money to customers by December 31, 2024. This is noteworthy because it is the only expenditure in the entire supplemental budget using funds from the CO2 tax that must be spent by the end of the year.  By way of contrast, there are 35 expenditures from the Climate Commitment Account that may not be spent before January 1, 2025. Senate budget writers want the checks to go out in 2024.

The proposed House budget deals with the payments slightly differently. Their proposal requires half of the funding “shall be disbursed by the department [of Commerce] to each utility on October 15, 2024.” These first checks will prioritize customers “at or below 80 percent area median income.” In King County, for example, this would be those making less than about $93,000. In Spokane County households making less than $56,000 would qualify, and in Yakima County, those making less than $52,000.

The other $75 million must be disbursed by February 15, 2025, unless voters approve Initiative 2117, which repeals the CO2 tax. In that instance, the checks are cancelled. It is worth noting that although the House proposal would cancel the payments, it isn’t because the state budget wouldn’t have the money. The taxes have already been collected and the initiative does not refund the taxes that have already been collected. The money would simply go into the general fund.

The apparent purpose of canceling the payments in the House budget is to tell voters if they pass I-2117 in November, they won’t get the $200 checks. The legislature would simply spend that money on whatever they wanted to in the future.

Both budgets list this as a one-time expenditure. For low-income families, there is no promise that they will be compensated for future costs from the CO2 tax in either budget.

Both budgets stipulate that when sending checks to customers, utilities must “adhere to program communications guidelines provided by the department” of Commerce. Those guidelines have not yet been developed but are reminiscent of last year’s decision by the members of the Utilities Commission (and suggested by the Office of the Attorney General) to prohibit utilities from listing the cost of the of the CO2 tax on customer bills.

When checks go out, some legislators want to make sure the message accompanying those checks is approved by the Inslee Administration.

Although this is the second largest expenditure in the proposed supplemental budget, the summary of “Significant Spending Items” provided by the Senate Ways & Means Committee does not include it. When the House Democrats tweeted out their list of budget highlights, they did not mention the $150 million for the payments, even though it is as large or larger than some of the other expenditures they mentioned.
For such a large expenditure, it is notable that it is not highlighted.

The bottom line is there are several suspect provisions associated with sending the checks.
The payments are the only budget item using CO2 tax revenue that must be spent this year in the Senate proposal. The House version requires the first round of checks be sent three weeks before the 2024 election and cancels the checks for some low-income families if I-2117 passes. It is a one-time payment and does not address any future costs associated with the tax on CO2. And utilities must use government-approved language when sending the payments to customers.

The combination of these very specific restrictions will leave some voters with the opinion that sending these checks is more about election year politics than ameliorating the harmful financial impact of the tax on CO2.

Problems from the beginning

Where is the exemption for the agriculture, maritime, and aviation industries?

  • The state’s cap-and-trade program was supposed to provide an exemption for agriculture, commercial fishing, and aviation from paying the fuel surcharge created by the program. But those industries have not received that exemption.
  • Several Republican legislators have asked the state Department of Ecology to make sure this exemption becomes a reality for farmers and the others who should receive it. However, DOE has not honored this section of the new law. Instead, DOE officials have pointed fingers at oil companies, saying they were causing the problem – the same thing Governor Inslee has done when asked about high gas prices.
  • DOE convened a work group in the summer of 2023 comprising more than 30 farmers, fuel distributors, climate advocates and others to resolve the cap-and-trade exemption problem for farmers. But these so-called solutions offered by this work group are not perfect.
  • A news story reported that one of the biggest obstacles for the work group has been figuring out how to track and exempt fuel used exclusively for agricultural purposes purchased at retail gas stations. Farmers and truckers who fill up vehicles at roadside gas stations say they cannot get exempted.

State leaders tried to hide the cost of cap-and-tax

  • Gov. Jay Inslee and other state leaders have not been entirely honest about the impact the cap-and-tax program would have on the price of gas and home heating fuel.
  • Republicans predicted a 45-50 cent-per-gallon increase to gasoline, which turned out to be accurate. However, the governor claimed we were fear-mongering and went on to say that the program would cost people “pennies” and might even lower gas prices.
  • The governor also blamed gas station owners and oil companies for unnecessarily raising the price of gas. Hypocritically calling for “radical transparency,” the governor called for legislation to force the oil companies to open their books to state review. A Democrat bill sponsored this year to require them to do so died, which means it didn’t even have enough support among Democrats to pass. 
  • The Attorney General’s office advised the Utility and Transportation Commission to rule that a local power company could not include the impact of the cap-and-tax program to people’s power bills on their statements.
  • Eventually, it was discovered the governor’s office knew of the true impact of the policy all along, although the governor continued to blame others by saying his incorrect figures came from the Department of Ecology.
  • The Department of Transportation is now accused of pushing one of their economists out of his job because he predicted the same price impact we did and he was told to change his numbers. He would not do so and is now suing the DOT. 

Built on falsehoods

  • A falsehood being used to scare people about I-2117 is that major transportation projects would be cancelled if cap-and-tax is repealed. Advocates falsely claim there will be no more roads or ferries, and that our children will suffer from poor air quality.
  • Only 7% of the state’s $13.5 billion transportation budget comes from cap-and-tax revenues. Of the $969.894 million coming from the CCA, no funds are used for 18th Amendment road or street projects.
  • The biggest deception of all is the claim this will have a large impact on climate change.
  • The governor and other advocates keep trying to link cap-and-tax to improving snowpacks in the Cascades, stopping forest fires, and reducing ocean temperatures. They don’t quantify these empty claims because they can’t.
  • Cap-and-tax is the worst kind of “virtue signaling.” It imposes high costs on the state and burdens our most vulnerable citizens for very little benefit.
  • About 420,000 people have spoken by signing petitions to put this issue before the Legislature. We should listen to them, do our duty, give this a high priority, and pass this legislation.

Call to conserve power proves need for better energy policies

By Sen. John Braun

Millions of power customers in Washington received a notice during a recent cold snap to lower their thermostats and limit their use of hot water to alleviate pressure on the power grid while Washington experienced winter weather.

These alerts should serve as a reminder that public policy matters when it comes to our state’s energy system. Unfortunately, for too long, legislative Democrats and the governor have been carrying out an energy agenda that threatens to push the Northwest’s power grid to a breaking point. Instead, we should be looking to create a more resilient grid with a diverse set of energy resources.

If the grid can’t handle current demand during a brief cold snap, it won’t be able to handle the increased demand that will come from millions of additional electric vehicles on the road. Combine that with proposals to ban natural gas and breach the Snake River dams and you have a catastrophe in the making. If the grid fails, millions of people would be put at risk – left without a dependable way to heat their homes. People living in houses with wells could lose access to water. Those with plug-in electric vehicles may be stranded.

The better approach is to responsibly build and strengthen our power infrastructure. Senate Republicans have proposed a plan called ‘Power Washington,’ which is made up of pragmatic and equitable solutions that would make a real difference. This is a complicated issue and simply banning fossil fuels and taxing an overworked grid is not the way to keep people safe and warm. It may sound good in theory to some, but it’s not a real-world solution.

 

Attorney General’s office tells PSE to hide “cap-and-tax” impact

By Sen. John Braun

The commissioners at the Washington Utilities and Transportation Commission (UTC) ruled that it is illegal for PSE to disclose that information to you as a stipulation for approving a 3.25% increase to your bill to cover $16.8 million in losses PSE expects as a result of that program.

Todd Myers of the Washington Policy Center sums up the ruling as one of the “most brazenly dishonest rulings” he’s ever seen.  In it, he says the UTC:

  • Admits the new CO2 tax increases energy prices
  • Contradicts another one of the false claims by Gov. Inslee and the Department of Ecology
  • Brazenly tries to hide those very facts from the public

Worse is that the office of Attorney General Bob Ferguson says including that detail would “unnecessarily complicate” your statement and that your bill should only share information that is “beneficial” to you.

 “…this is not only dishonest but violates the spirit of Washington’s laws and constitution. The position of the Public Counsel in the Attorney General’s office is that they know what the public should know and what they shouldn’t. The claim that transparency is bad for the public is remarkable and revealing.”

Todd Myers, Washington Policy Center

This is lying by omission. By not being transparent about why your power bill is going up, the government dodges any accountability for it.

Their excuse — that full disclosure makes the bill too complicated for you — treats you like you aren’t smart enough to understand it. In reality, they fear that you are too smart not to realize they are at fault for another increase to your cost of living.

The sad irony is that the Department of Ecology claimed that the cap-and-tax program would decrease the cost of energy.

And, in the regulatory proceeding with the UTC, left-wing environmental activist groups who previously released statements blaming oil companies for price increases told a different tale. They admitted the cap-and-tax program, which is part of the Climate Commitment Act, is the cause. Were they lying then? Or are they lying now?

Read the full article.

Watch

Sen. Drew MacEwen, ranking Republican on the Senate Environment, Energy & Technology Committee, discusses the Climate Commitment Act and the cap-and-tax program with the chair of the committee. 

In The News

Excerpt:

Former WSDOT economist files claim against state over forecasted gas prices

Wash. — A former economist for the Washington State Department of Transportation (WSDOT) claimed he was told to falsify numbers concerning the impacts of Washington’s Climate Commitment Act on gas prices.

Scott Smith, a former transportation planner, filed a complaint Thursday against WSDOT, the Office of Financial Management (OFM) and the governor’s office. In it, Smith claimed that he was the primary employee tasked with preparing a gas revenue and price forecast at the beginning of 2023 for WSDOT’s revenue forecast council.

Smith calculated that Washington’s cap-and-invest program — which went into effect on Jan. 1 — would lead to a 45- to 50-cent increase on every gallon of gas. But, Smith said his supervisors at WSDOT instructed him to keep that information quiet, per direction from the Office of Financial Management.

Read the full article.

Listen

Call To Action

Tell the Senate Democrat majority leader to give I-2117 and the other five initiatives a hearing

Tell the Senate Democrat majority leader to allow legislators to do their constitutional and moral duty.

Grant a hearing to I-2117 and the other five initiatives before the Legislature.