Jay Inslee’s cap-and-tax scheme relies on distortion of facts

A succession of rather questionable assertions concerning Jay Inslee’s cap-and-tax scheme have been appearing in the public sphere. Last week, Shift reported on how Seattle Times columnist Danny Westneat claimed Republican lawmakers were stonewalling the “popular” policy due to special interests concerns—an accusation Westneat was quick to throw, completely ignoring the obvious Democrat-extreme environmental organization relationship permeating Inslee’s entire “green” agenda (including the cap-and-tax scheme).

Westneat’s column was far from honest. The reality is that Republicans are not alone in their opposition to Inslee’s plan. The cap-and-tax scheme does not even have enough support to pass the Democrat-controlled state House. Moreover, Republican Sen. Doug Ericksen, chair of the Senate Energy, Environment and Telecommunications Committee, promised to give Inslee’s cap-and-tax bill a hearing if it ever made it to the Senate—which, of course, it won’t.

Westneat’s entire premise is wrong

These aren’t the only problems with Westneat’s column. In fact, the entire premise on which he bases his argument in favor of Inslee’s policy is flawed. Westneat points to a survey of Puget Sound region voters that reveals what appears to be widespread public support for a carbon taxation. Based on that conclusion, Westneat argues that Republican lawmakers should give the people what they want: Inslee’s cap-and-tax scheme.

However, as Shift pointed out, appearances—particularly in the case of this survey—are deceiving. Westneat asserts that 80% of survey respondents confirmed they support carbon taxation policies, like a cap-and-tax scheme. That is a very generous and loose interpretation of the survey results. In fact, it’s pretty safe to say that is not what the survey reveals at all.

The survey actually asks respondents if they support or oppose a “tax on the biggest polluters” to “fund investments in transportation,” 80% affirmed their support. Another question in the survey found 63% support “reducing greenhouse gases by taxing those who release the most pollutants into the air.” It is extremely important to note the language used in these questions.

Not once does the survey use the common descriptions for the policies it purports to be studying. It never uses the terms “cap-and-trade” or “cap-and-tax.” In light of this significant omission, the survey’s findings come as no surprise. In fact, they are expected. After all, most people would support a tax on imposed on other people—especially when those other people are labeled among the “biggest polluters.” Far fewer would support said tax if it threatened their pocketbooks, which is exactly what Inslee’s cap-and-tax scheme would do.

Westneat isn’t alone in dispensing misinformation

Unfortunately, the misinformation surrounding Inslee’s cap-and-tax scheme does not end with Westneat. According to the latest reports, the state Office of Financial Management (OFM) has revised a pair of its cap-and-tax impact estimates. The number of targeted “polluters” has dropped from 130 to the rather more ambiguous estimate of anywhere from 80-90. Presumably, the Department of Ecology thought it best to permanently remove institutions of higher learning, including the University of Washington and Washington State University, and military bases, including US Army Joint Base Lewis‐McChord and Naval Base Kitsap, from its list of targets.

Despite the rather significant drop in targeted “polluters,” OFM also revised its revenue prediction from $1 billion a year to $1.3 billion a year. How exactly OFM arrived at an increase in revenue projections while also decreasing the base source of said revenue is unclear. What is exceptionally clear is that OFM has little-to-no idea what it is doing when it comes to Jay Inslee’s extreme “green” agenda. Time and time again, OFM officials have failed to adequately answer pressing questions concerning how they arrived at their projections.

OFM has a record of questionable projections

As Shift reported, OFM presented similar inadequate projections when it came to another one of Inslee’s extreme “green” policy items. OFM’s Jim Cahill’s testimony before the state Senate Energy, Environment and Telecommunications Committee last month brought to light serious concerns regarding the assumptions being made on the impact of a Inslee’s fuel standard, which would increase the cost of fuel by a $1 plus per gallon (according to his consultants).

Cahill informed committee members that the state has an estimated capacity to produce 108 million gallons of biofuels annually, primarily via Imperium Renewables (a renewable energy company based in Seattle). However, it is important to note that the 108 million gallons is a theoretical capacity. The figure does not take into account the availability of fuel crops for biofuels—Cahill did not provide information on how they would ensure the availability or even if companies will actually step up and produce the biofuels.

Republican Sen. Doug Ericksen pointed out the clear problem in Cahill’s assumptions. He stated that, on one hand, OFM was projecting Imperium Renewables’ production capacity and, based on those figures, claiming that there “should be” enough biofuels to achieve standards under a fuel mandate. On the other hand, OFM was not projecting the total biofuel capacity or even how they will get enough biofuels.

OFM’s projections lacking compared with independent study

OFM’s projections have lacked—and continue to lack—on multiple fronts. Notably, OFM has yet to release a single estimate on the impact of Inslee’s extreme green agenda, including his cap-and-tax scheme, on employment—though such oversight could be expected from Inslee’s economists. Business-friendly organizations have not been so carefree.

As Shift reported, a study conducted by Energy Strategies—in collaboration with the University of Idaho and Washington State University and commissioned by the Washington Climate Collaborative (WCC), a business coalition—found that Jay Inslee’s cap-and-tax proposal would have a devastating impact on our state’s economy and cost jobs. Specifically, Inslee’s cap-and-tax scheme would reduce the average annual employment by approximately 56,000 jobs over the next 20 years. Nearly 6,000 of those jobs would be in the manufacturing sector.

The study also found that the total aggregate worker and proprietor’s income would be reduced by an annual average of $3.1 billion per year. That figure, divided by total Washington households, is equivalent to a reduction of $1,200 in annual income per household. The average household could also expect an increase in gasoline, natural gas and electric bills by nearly $60 a month—that does not include the indirect cost increases in consumer goods including food.

As for Washington State, the study found that Inslee’s cap-and-tax scheme result in a loss of an average $658 million in annual net tax revenue due to lower sales, property and excise taxes resulting from the reduced future economic growth. Additionally, the study found that the average annual net revenue from the cap-and-tax scheme would be just nearly 60% of Inslee’s predictions

It’s safe to assume that, if presented with the conclusions of the study above, public support for Inslee’s cap-and-tax scheme would not even begin to approach 80%. That’s, of course, why Inslee needs his supporters—including the OFM—to paint a much rosier picture than reality presents.

As of 3:30 pm today, the state House Appropriations Committee will hear Inslee’s cap-and-tax scheme. It will be interesting to see whether or not the Democrat-controlled committee will even vote on the bill.

UPDATE: The state House Appropriations Committee did not vote on the bill yesterday. Reports indicate they are expected to in the coming weeks.