Rep. April Connors: The carbon tax on gas is burdening WA families. How we can lighten the load

“Pennies” – that’s what Governor Inslee predicted would be the impact of the state’s new carbon tax on gas prices. One year after he made that prediction, and for the first time in state history, Washington had the highest gas prices in the nation this summer.   

Inslee blames price gouging fueled by corporate greed. Why corporations are greedier in Washington than in Oregon and Idaho remains a mystery, and one he intends to investigate.   

The truth is Washington’s carbon tax adds about 50 cents to the cost of gasoline per gallon, costing the average driver $250 annually or $500 for a two-driver household. That’s what cap-and-trade programs are designed to do: reduce carbon emissions by putting a price on them. This year, the state has raked in $1.46 billion – nearly three times the $574 million in revenue the state predicted when the measure was signed into law. By year’s end, the amount of new revenue will eclipse what we collected in total gas taxes in 2022 – effectively doubling the gas tax.  

Honest policymakers have a choice: we can act today or continue to tax families at this needlessly high rate, doubling down on a regressive tax system.

After the final 2023 quarterly carbon allowance auction takes place, the state could have billions in new revenue available to spend. As the sponsor of the Carbon Auction Rebate – CAR for short – I say it’s time to return a portion of the over collected taxes back to the people.

Today, there are four proposals on the table.

Most legislators in the majority have remained silent, and presumably want to use these funds to pay for new or existing programs. Senator Mark Mullet would like to use these funds to reduce car-tab fees for two years, but this would shortchange the transportation budget resulting in a shell-game in which Carbon Commitment Act (CCA) dollars are used to backfill transportation funds; his proposal also calls for lowering compliance obligations in the short-term, which means increasing carbon emissions. Finally, Senate Republican Leader John Braun wants to use these funds for property-tax exemptions and credits to renters.

Representative Mary Dye and I have a simpler plan. We would send all extra funds back to Washington drivers as CAR check. Unlike Sen. Mullet’s proposal, our bill would not change car-tab fee amounts or emission reductions. Drivers get a rebate, and we adhere to our emission reduction goals.

Here’s how it would work: registered vehicle owners would receive a $100 check – or up to $200 per family with two or more registered vehicles – next July. There would be no strings attached. After the July payment, Washingtonians would receive an annual check when they renew their tabs. The check amount would vary depending on how much the state collects above what was forecasted to be collected in 2021 when the CCA was enacted. Individuals would be limited to one check, and everyone would receive the same amount.

Critics claim the CAR bill violates the state’s constitutional prohibition on government gifts to private parties, but providing financial relief to drivers fulfills a fundamental public purpose: it makes the state’s climate law more durable by making it more affordable. As currently structured, Washington’s cap-and-trade program is simply unaffordable.   

The beauty of this approach is we can maintain the same investments in clean energy, transportation, and health in the CCA, while offsetting the regressive nature of the carbon tax by providing financial relief directly to families.

With $5 gas, constituents of mine have had to cut back on groceries, cancel family trips, and make other painful sacrifices. And, as we saw during the pandemic, no-strings-attached, direct cash payments can be an effective way to provide a hand-up. As our state moves into a clean energy future, we should adopt the CAR bill and similar proposals to ensure that the costs of that transition are not disproportionately borne by those who can least afford it.

This opinion article appeared in The Tri-City Herald on October 22, 2023: The carbon tax on gas is burdening WA families. How we can lighten the load | Opinion

State Representative April Connors, 8th Legislative District
434 John L. O'Brien Building | P.O. Box 40600 | Olympia, WA 98504-0600
(360) 786-7882 | Toll-free: (800) 562-6000