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.