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Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Tuesday, December 29th, 2015

Washington will lose money with CarbonWA’s I‑732, legislative staff analysis shows

Last week, against what should have been their bet­ter judg­ment, Yoram Bau­man and the key peo­ple involved in spear­head­ing Car­bon­WA’s deeply flawed Ini­tia­tive 732 announced they had decid­ed to move for­ward and turn in all of their remain­ing sig­na­tures to Sec­re­tary of State Kim Wyman’s office. This means I‑732 will like­ly qual­i­fy as an ini­tia­tive to the Leg­is­la­ture for the 2016 ses­sion, and like­ly then appear on the ensu­ing pres­i­den­tial elec­tion bal­lot sev­er­al months lat­er.

Since its incep­tion, I‑732 has been adver­tised to the peo­ple of Wash­ing­ton State as a “rev­enue neu­tral” tax swap. The ini­tia­tive calls for Wash­ing­ton to insti­tute a tax on emis­sions of gas­es like car­bon diox­ide, while also low­er­ing regres­sive tax­es like the sales tax and the busi­ness & occu­pa­tion tax. I‑732 pro­po­nents have been claim­ing all year that the new rev­enue stream the ini­tia­tive sets up will be almost per­fect­ly off­set by the planned reduc­tions in the exist­ing tax­es I just men­tioned.

But it turns out I‑732 isn’t “rev­enue neu­tral” after all.

An analy­sis con­duct­ed by non­par­ti­san leg­isla­tive staff at the request of State Rep­re­sen­ta­tive and soon-to-be State Sen­a­tor Reuven Car­lyle (the out­go­ing Chair of the House Finance Com­mit­tee) finds that I‑732 would cost the state mon­ey… a lot of mon­ey, in fact. In the first four years of imple­men­ta­tion, staff esti­mate the fis­cal impact of I‑732 to be a loss of $675 mil­lion. And no, that’s not a typo. $675 mil­lion in lost rev­enue! Here’s the break­down.

At best, these num­bers demon­strate that the under­ly­ing premise of I‑732 is ques­tion­able, and at worse, com­plete­ly false.

Bau­man and Car­bon­WA, not sur­pris­ing­ly, dis­pute the analy­sis, which has been qui­et­ly cir­cu­lat­ing amongst labor and envi­ron­men­tal lead­ers for weeks, and has now been made in pub­lic in the wake of Car­bon­WA’s deci­sion to turn in all of their sig­na­tures. The Car­bon­WA cam­p’s response thus far to the pub­li­ca­tion of the analy­sis (which they’ve also known about for some time) has been to dis­miss it.

“I con­tin­ue to be con­fi­dent our pol­i­cy is approx­i­mate­ly rev­enue-neu­tral,” Yoram Bau­man told the Times’ Jim Brun­ner.

Bau­man’s attach­ment of a qual­i­fi­er to his claim of rev­enue neu­tral­i­ty belies his pro­fessed con­fi­dence in the sound­ness of Ini­tia­tive 732.

We’ve stud­ied the text of I‑732 and looked at some of the pub­lic opin­ion research that’s been done to assess its via­bil­i­ty. Our con­clu­sion ear­ly on was that I‑732 is fatal­ly flawed, prin­ci­pal­ly because it has a ter­ri­ble bal­lot title and because it isn’t con­cerned with mak­ing any invest­ments in renew­able ener­gy infra­struc­ture, mass tran­sit, edu­ca­tion, or any oth­er need­ed pub­lic good.

But this analy­sis from non­par­ti­san leg­isla­tive staff — the peo­ple that lead­ers in both par­ties rely on to craft bud­gets that aren’t based on faulty arith­metic or erro­neous assump­tions — sug­gests that I‑732 isn’t just defec­tive. It’s a dis­as­ter.

I‑732’s back­ers were aware of this analy­sis last week when they con­tem­plat­ed hit­ting the brakes on their effort. They were also aware of all the pub­lic opin­ion research that shows vot­ers aren’t recep­tive to I‑732. Yet, they reck­less­ly decid­ed to move for­ward any­way. The wise course of action would have been to aban­don I‑732. Sad­ly, instead of cut­ting their loss­es, they dou­bled down.

I‑732 has been mar­ket­ed to the peo­ple of Wash­ing­ton as a pro­pos­al devel­oped along the lines of the bioethics pre­cept First, do no harm. The words “rev­enue neu­tral” appear all over Car­bon­WA’s mate­ri­als, includ­ing its web­site.

But if non­par­ti­san leg­isla­tive staff are cor­rect, adop­tion of I‑732 would lead to great harm, cost­ing us hun­dreds of mil­lions of dol­lars… at a time when we are strug­gling to ade­quate­ly fund our pub­lic schools and pre­vent rad­i­cal right wing ini­tia­tive prof­i­teer Tim Eyman from plant­i­ng tick­ing time bombs in the state bud­get.

Bud­get­ing on behalf of a state home to sev­en mil­lion peo­ple isn’t sim­ple or easy to do, as leg­is­la­tors like Reuven Car­lyle and Ross Hunter can attest. In the leg­isla­tive process, when a prob­lem is found with a bill, it can be fixed in com­mit­tee, on the floor, or in the oppo­site cham­ber of Wash­ing­ton’s bicam­er­al Leg­is­la­ture.

But there is no way to fix a fatal flaw with an ini­tia­tive once its text has been final­ized. Ini­tia­tives have to be rock sol­id from the get-go so that they can stand up to intense scruti­ny and crit­i­cism. I‑732 is not. It deserves to fail.

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5 Comments

  1. The Cas­ca­dia Advo­cate, Sept. 8, 2015: “While the Alliance debates the exact details of the pro­pos­al they plan to put on the bal­lot, Car­bon­WA has been busy build­ing a grass­roots move­ment to sup­port I‑732. The Alliance hasn’t done that kind of work yet, part­ly because they don’t have a spe­cif­ic pro­pos­al to orga­nize around.”

    And, as far as the pub­lic knows, still true today.

    # by Ted Wolf :: December 29th, 2015 at 2:01 PM
  2. Sorry…this is not cor­rect. The staff made some errors in their cal­cu­la­tions and if you go to the Car­bon­WA site you will find detailed num­bers that show that the ini­tia­tive does make things very, very close to neu­tral. It is impos­si­ble to be exact­ly neu­tral because the bud­get is a mov­ing tar­get. No problem…legislators can adjust the rest of the bud­get to ensure exact bal­ance. So there is no fatal flaw. The ques­tion is one of philosophy.…revenue neu­tral or pos­i­tive. I have no con­fi­dence in the wis­dom of the leg­is­la­ture to use extra cash wisely–their track record is ter­ri­ble (bio­fu­els any­one?). Only rev­enue neu­tral can be bipar­ti­san and that is absolute­ly crit­i­cal if real change is going to be made.

    # by Roger Tawning :: December 29th, 2015 at 2:17 PM
  3. Well, I guess we have the answer to the ques­tion of whether this fac­tion will sup­port or oppose 732. If what Roger says is true, this post is mis­lead­ing. If it’s left up or not oth­er­wise cor­rect­ed, it’s inten­tion­al­ly mis­lead­ing.

    # by Steve Verhey :: December 29th, 2015 at 5:31 PM
  4. Andrew — I was amazed by your admis­sion that the State’s analy­sis “has been qui­et­ly cir­cu­lat­ing amongst labor and envi­ron­men­tal lead­ers for weeks, and has now been made in pub­lic in the wake of CarbonWA’s deci­sion to turn in all of their sig­na­tures”. If you have known about the results of State’s pre­lim­i­nary analy­sis for weeks, does­n’t that make your sud­den burst of out­rage expressed above a bit disin­gen­u­ous? Did you con­sid­er that you, Rep. Car­lyle, and the SEIU might have had an eth­i­cal duty to release the infor­ma­tion to the pub­lic on the spot if you found it so shock­ing? Could it be that this kind of shrewd, care­ful­ly timed, and selec­tive dol­ing out of insid­er infor­ma­tion for tac­ti­cal advan­tage that you’ve just admit­ted to (along with the hyper­bol­ic rhetoric) may be a rea­son why peo­ple are leav­ing orga­ni­za­tions such as yours and join­ing new, grass­roots envi­ron­men­tal groups such as Car­bon­WA?

    # by James Raymond :: December 29th, 2015 at 11:12 PM
    • We did­n’t see the num­bers until they were pub­lished yes­ter­day, James. We’d only heard that an analy­sis had been request­ed. We can’t release infor­ma­tion that we don’t actu­al­ly have. We don’t pub­lish any­thing we can’t sub­stan­ti­ate on the Cas­ca­dia Advo­cate. Keep in mind that Car­bon­WA’s lead­er­ship was recent­ly in dis­cus­sions to stand down and not sub­mit its resid­ual I‑732 sig­na­tures in favor of an alter­na­tive com­pro­mise ini­tia­tive. Had Car­bon­WA decid­ed not to move for­ward with I‑732, then the fis­cal impact of I‑732 would have been moot. But they have decid­ed to pro­ceed. That cer­tain­ly makes the analy­sis request­ed by Reuven Car­lyle rel­e­vant. That’s why it has now been released to the pub­lic and the press.

      # by Andrew :: December 29th, 2015 at 11:39 PM

One Ping

  1. […] I‑732 has qual­i­fied, it faces uncer­tain prospects. Non­par­ti­san leg­isla­tive staff have cal­cu­lat­ed that the ini­tia­tive isn’t real­ly rev­enue neu­tral, a con­clu­sion CarbonWA’s pro­po­nents heat­ed­ly […]