Carbon tax proposal raises local concerns

By Andy Porter, December 19, 2014, Walla Walla Union Bulletin

Although hailed by some, critics are trashing a plan by Gov. Jay Inslee to tax state industries for their greenhouse gas emissions.

 

Inslee’s proposed cap-and-trade program would require the state’s largest industrial polluters to pay for every ton of carbon they release.

 

The proposal was part of a broader package the Democrat said would help the state meet a 2008 mandate to drastically reduce greenhouse gas emissions blamed for global warming. It sets an overall limit on heat-trapping gases similar to a program that California launched nearly three years ago.

 

Inslee said legislators in both parties will have to face stark realities as they confront a projected budget gap of more than $2 billion during the next two-year period.

 

“They may conclude it’s better to tax pollution than voters, that it’s better to tax polluters than drivers,” he said.

 

Under a cap-and-trade market-based program, the state would set an overall limit on carbon emissions and require the state’s biggest polluters to pay for each metric ton of pollution emitted. The price would be set at an auction. Polluters can sell excess permits they don’t need to others.

 

Money raised by selling allowances to pollute would pay for transportation projects, education-funding requirements imposed by the state Supreme Court, and assist low-income families and industries that are most affected by higher energy costs.

 

While supporters lauded the plan, Republican legislators, including state Sen. Mike Hewitt, R-Walla Walla, said the measure will raise gas and energy prices and harm families and businesses.

 

“Obviously the governor does not care about major employers or a transportation bill in this state,” Hewitt said Thursday. “I just think the governor is out on left field on this.”

 

Republican state Sen. Doug Ericksen called it “a general fund tax increase” and said he’ll work to come up with clean energy solutions that aren’t so costly. The plan could raise fuel prices by 7 to 15 percent above what they would be by 2035, according to state estimates.

 

Both Hewitt and Port of Walla Walla Executive Director Jim Kuntz said the proposal could hurt two of the county’s largest employers, Tyson Fresh Meats Inc. and Boise Paper Solutions, both in Wallula.

 

Hewitt noted the Boise plant “has been on the cusp of closing” in the past and Inslee’s tax plan could push it over the edge by making it unprofitable. The plant is the county’s seventh-largest employer with 600 full-time jobs and pays about $2.2 million a year to the county in property taxes.

 

Kuntz said “the Port is very concerned” with the proposal. “This tax falls on the largest taxpayers and largest job generators in Walla Walla County. It’s just not good economic policy.”

 

The Walla Walla County facilities are already in full compliance with all applicable regulations, Kuntz said, and asking them to pay additional taxes would be “putting a surcharge on our largest employers.”

 

Tyson Fresh Meats is the county’s second-largest employer with 1,380 workers, and pays about $375,000 per year in property taxes, Kuntz said.

 

A third facility affected by Inslee’s proposal would the Gas Transmission Northwest Pipeline compression station, also in Wallula. But the station is part of the pipeline company’s transmission system and is not a direct employer similar to Tyson and Boise.

 

Attempts to reach state Rep. Terry Nealey, R-Dayton, and state Rep. Maureen Walsh, R-College Place, for comment were unsuccessful Thursday and this morning. The legislators along with Hewitt represent the 16th Legislative District, which covers all of Walla Walla and Columbia counties and portions of Benton and Franklin counties.

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