WashingtonVotes NEWS: Friday, January 13, 2017
Climbing a Mountain: Governor Inslee outlines his push for major tax increases. Lawmakers respond
Governor Inslee used an extended mountain metaphor in his inaugural address Wednesday, after taking the oath of office for his second term. He defended his proposal to increase education spending with a massive $4.6 billion tax increase that includes raising the business and occupation tax and imposing new capital gains and carbon taxes. “The journey to fully fund education in our state has been a lot like climbing a mountain,” he said. “And we’ve been climbing together for a long, long time.”
Republican lawmakers responded at a press conference following the Governor’s speech. House Minority Leader Dan Kristianson, R-Snohomish, said the goal of fully funding basic education could be achieved during this session, but he added that, “Using [the Governor’s] analogy about getting to the top of the mountain, there are several paths we can take.”
Rep. J.T. Wilcox, R-Yelm, criticized the governor’s opposition to levy reforms, such as a levy swap which would raise taxes in more affluent districts and lower them in poorer areas. “Today, the governor paid lip service to alternative paths, “ he said, “but I thought it was a mistake to then demonize any kind of levy reform because that’s the one approach we can take to actually address tax reform in a way that provides relief to the people that need it the most.”
The Senate Energy, Environment and Technology committee held a work session on Thursday to review the Governor’s request for a new tax on energy, the centerpiece of his education funding plan. The tax would amount to $25 per ton of oil and gas and increase state tax collections by about $2 billion per year. The new tax could add about 25 cents per gallon of gas at the pump. The tax would be increased by 2.5 percent annually to raise an extra $100 million, on top of the currently-projected $2 billion.
The Governor says he wants the bulk of the increased revenues, about $1.07 billion, to go to K-12 education, and some $500 million to be split between clean energy subsidies and natural resources programs. About $200 million would be spent on jobs and economic development, and $100 million would be directed toward energy assistance subsidies for lower income residents.
If approved by the legislature, the new energy tax would take effect in May of 2018.
Eastern Washington lawmakers expressed concerns Thursday during a work session of the Senate Energy, Environment, and Technology committee. They pointed to impacts of the proposed energy tax on rural residents and businesses. “In the rural areas of the state where I live and represent, it’s a much different situation. People are driving long distances to go to work. I think I have the longest commute in the state,” said Sen. Sheldon, D-Potlatch. “Forty-five percent of the people in my county leave the county every day to go to work,” he added. Sen. Sheldon said the impact of the tax on propane and gasoline costs would make the Governor’s energy tax a “tough sell.”
Governor Inslee’s proposed energy tax would fall harder on people living in eastern Washington, where winters are colder, than on those in the western part of the state.
Sen. Sharon Brown, R-Kennewick, told Chris Davis, the governor’s policy adviser on carbon markets who presented the plan, that companies in her district are deeply concerned and that around 200 jobs in her area could be lost as a result of the carbon tax. “It’s been hard enough trying to keep those companies in the state without the program that you’re talking about,” she said.