Gov. Jay Inslee touted the benefits of generating state revenues out of efforts to curb pollution during a public appearance Friday, but he stopped short of confirming a carbon tax or cap-and-trade program would be a centerpiece of the budget and policy plans he'll outline this week.
"You've got to wait until Friday to find out and make sure it will be," Inslee told reporters after his appearance.
Officials have planned a week-long rollout of the governor's key policy proposals culminating with the unveiling of his budget proposal on Thursday. He'll begin Monday with an announcement of his education agenda.
'You Will See Revenue Rolled Out'
Debate over education spending is likely to dominate the coming legislative session. Lawmakers face a budget shortfall of more than $2 billion as they grapple with the fallout from the McCleary school funding case, an expensive voter-approved class size reduction plan and cost-of-living raises for teachers and state employees.
David Schumacher, who heads the state's Office of Fiscal Management, says state cannot cut its way out of that budget hole and will need to find new revenue sources.
"There will be cuts and there will be efficiencies and there will be transfers of money," Schumacher said during a panel discussion Friday before the governor took the stage. "But the level of cuts to finance the amount of education spending — whether it's K-12, early learning or higher ed — we just can't do with cuts. That's the decision. You will see revenue rolled out [in the governor's proposal]."
Inslee's budget proposal could also conceivably involve closing tax exemptions or raising taxes on the wealthy, such as with a capital gains tax.
But the governor focused Friday on the benefits of climate-related revenue schemes. Cap-and-trade programs, for instance, set limits on carbon emissions and requires companies who exceed those limits to purchase credits, conceivably generating revenue for the state.
"Instead of just using taxes to build a bridge, why not use a charge on pollution to build not only a bridge, but clean air so that kids can breathe?" Inslee said before a conference of the left-leaning Washington Budget and Policy Center. "You get a twofer."
'Too Good To Be True?'
Sen. Michael Baumgartner, R-Spokane, said he'll give due consideration to the governor's proposal when he releases specifics. On face, though, he's skeptical about Inslee's claims.
"It sounds like he's marketing something that's a little too good to be true," Baumgartner said. "I have yet to encounter a significant number of my constituents who are prioritizing a cap-and-trade measure as the things they want taken care of."
Rep. Reuven Carlyle, D-Seattle, said he doesn't believe the governor will advance a carbon tax or cap-and-trade program as the sole solution budget shortfall.
"Some type of carbon pricing where polluters have to pay for their fair share of pollution is a thoughtful and reasonable approach. It can raise a substantial amount of money, but it takes time," Carlyle said.
Following Inslee's announcement of his education priorities Monday, the governor will outline a transportation plan, climate agenda and budget proposal in separate events later in the week.
