Initiative 732 is the only proposal in Washington to combat climate change. It balances the price on carbon by reducing sales tax by 1 percentage point and granting $1,500 to almost half a million low-income families. I-732 is not only a price on carbon but an approach to making Washington's tax structure less regressive. To reduce impact of the carbon tax on public transit and agriculture, the price on carbon would be exempt or phased in over longer time.
Estimated $797 million shortfall over six years by the state Office of Financial Management relies on assumptions about the growth of the state economy, which impacts state sales tax and Working Family Tax Exemption. To put this in context, OFM estimates revenue of about $8 billion over six years from this initiative. Further, the cost estimate does not take into consideration environmental and health costs of pollution.
The Legislature can provide nuanced detailed policies. But the McCleary decision was handed down in 2012 to make steady, real and measurable progress each year to fully fund K-12 public education. Yet, the Legislature has not made significant progress on this very important issue mandated by the Washington State Supreme Court. I have no confidence they will combat climate change by legislation.
British Columbia passed a similar carbon tax back in 2008, which has reduced their carbon emissions by 16 percent, and the economy of B.C. is doing better than the rest of Canada. The success of this carbon tax has prompted Alberta to institute a similar tax.