State agency: Repealing Climate Commitment Act means billions in lost revenue

The Washington State Office of Financial Management has released its fiscal impact statement on Initiative 2117, the measure to prohibit state agencies from implementing a cap-and-trade program and repeal the 2021 Climate Commitment Act.

OFM’s fiscal impact statement notes that the passage of I-2117 “will reduce state revenue from carbon allowance auctions by $3.8 billion and reduce state expenditures by $1.7 billion between the effective date of the initiative and June 30, 2029.”

Todd Myers, vice president for research at the Washington Policy Center think tank, notes a repeal of the CCA would impact future spending, so there is no hole in the actual budget.

“Not surprisingly, the tax has generated more than initially expected, bringing in more than $2 billion,” Myers said. “So, it isn’t surprising that they would say, 'Look at all the spending we’re going to lose.’”

Passage of I-2117 would cut funding for more than 300 state employees, according to OFM.

“These are new taxpayer-funded positions created by CCA: people who run the CO2 tax program, distribute grant money, and those involved in various government planning, which is funded by the tax money,” Myers explained. “There’s a lot of government planning in there, so that’s where a lot of these jobs are coming from.”

OFM says the passage of 2117 would lead to some transportation projects being cut or scaled back. But those are not infrastructure-related projects like roads and bridges; rather, they are environmental projects like $42 million for electrifying ferry docks and funding new electric ferries.

Myers questions other CCA-funded projects that OFM says could be cut with the passage of the initiative.

“There’s a million dollars for transportation planning for the 2026 World Cup,” he noted. “What that has to do with fighting climate change, I’m not sure.”

The OFM report does not consider the CCA’s impacts on taxpayers, including higher gas prices and utility costs.

In a recent blog post, Myers lists a number of CCA projects that could be in jeopardy.

Some of those projects would fund forest health and salmon recovery, which Myers concedes should be priorities for the Legislature, regardless of funding.

“The total amount in 2025 that goes to wildfire prevention is $7.5 million,” he said. “That’s a tiny amount of money, and there’s $7 million – almost the same amount – dedicated to algae and blue carbon projects.”

According to the state Department of Natural Resources, carbon sequestration projects “offer a significant opportunity to mitigate greenhouse gas emissions.”

“I think if you ask voters, what is more important – stopping catastrophic wildfires or putting government money into blue carbon projects – I think the answer is pretty clear,” Myers said.

The Center Square contacted Gov. Jay Inslee's office for a response to Myers’ claims about CCA spending and received an email response from Deputy Communications Director and Press Secretary Mike Faulk.

“Transportation, as you know, is our largest source of carbon pollution,” Faulk said.

He went on to say, “The CCA cap slashes pollution, and the critical revenue funds our clean transition and resilience to climate change impacts,” said Faulk.

Myers said the state will bring in less revenue if voters pass I-2117 in November, but he pointed out the state has plenty of money to go around.

“Between the 2019-21 biennium and 2023-25, the state’s operating budget increased from $51.86 billion to $71.95 billion,” Myers said.

Those figures aren’t adjusted for inflation.

“There’s no doubt there would be less money for government to spend," Myers reiterated. "But what this shows is their choices for how to spend the money are questionable.”

A recent Survey USA poll on Initiative 2117 found that 48% of likely voters intend to vote yes on the measure, 34% plan to vote no, and 18% are unsure how they will vote.