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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.


5 Comments

  1. Ted Wolf
    Posted December 29th, 2015 at 2:01 PM | Permalink

    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.

  2. Roger Tawning
    Posted December 29th, 2015 at 2:17 PM | Permalink

    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.

  3. Posted December 29th, 2015 at 5:31 PM | Permalink

    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.

  4. James Raymond
    Posted December 29th, 2015 at 11:12 PM | Permalink

    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?

  5. Andrew
    Posted December 29th, 2015 at 11:39 PM | Permalink

    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.

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  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 […]