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Eyman Suing Ferguson for no tax Advisory Vote on $3.9 Billion Legislation | Local

Anti-tax activist Tim Eyman is suing Washington State Attorney General Bob Ferguson for not including a tax advisory vote on cap and trade legislation set to go into effect next year.

Tax advisory votes are a way to give direct feedback to elected officials about tax increases, but the results are nonbinding. They serve to advise the Legislature whether or not to maintain or repeal a bill they passed, but do not in themselves result in the bills being maintained or repealed.

They first appeared on ballots in 2012 after Initiative 960 was passed in 2007.

I-960 requires that the Office of Financial Management determine the 10-year cost to taxpayers of any proposed legislation that creates or increases taxes or fees.

Eyman’s lawsuit in Thurston County Superior Court, filed on Thursday, notes the OFM determined the implementation of cap and trade legislation, Senate Bill 5126, would generate an additional revenue of more than $3.9 billion in the first 10 years.

Passed by the Legislature in 2021, the Climate Commitment Act directs the Washington State Department of Ecology to develop and implement a statewide cap-and-trade program to cut carbon pollution by requiring emitters to obtain “emissions allowances” equal to their covered greenhouse gas emissions .

Similar to stocks and bonds, these allowances can be obtained through quarterly auctions hosted by Ecology.

“But the Legislature specifically included a delay in the implementation of the cap and trade bill,” the lawsuit states. “Nonetheless, the Governor [Jay Inslee] partially vetoed some portions of the bill, including the delay. Many in the Legislature doubted the constitutionality of the Governor’s partial vetoes and threatened litigation. Plaintiff did, in fact, challenge in Thurston County Superior Court the Governor’s partial veto of the delay in E2SSB 5126 (Eyman v. Inslee, #21-2-10945-34). But before the court could rule, the Legislature passed E2SSB 5842 which statutorily removed the delay (thus making the lawsuit moot) which allowed the cap and trade system – and its corresponding $3.9 billion increase in state revenue – to proceed starting on January 1, 2023 .”

The lawsuit goes on to say, “This very clearly fits the statutory requirement for a tax advisory vote (which OFM has already determined).”

Ferguson thinks otherwise, according to the lawsuit, which alleges the attorney general “has elected to move forward without a public vote on it even though OFM has already determined it fits the statutory definition of ‘raises taxes as defined by RCW 43.135.034’ and even though the passage of E2SSB 5126 and E2SSB 5842 are clearly a ‘combination of actions by the state legislature’ and thus are subject to an advisory vote.”

The Center Square reached out to the Attorney General’s Office for comment.

“Tim Eyman has a history of lying about our office to raise money from his supporters, and this is no exception,” Brionna Aho, spokesperson for the attorney general, said in an email. “Our office’s advice on advisory votes is independent and non-partisan.”

Her response included a link to a December 2019 press release from the Attorney General’s Office headlined “Statement from Solicitor General on Tim Eyman’s false claims regarding I-976 case.”

The Center Square asked University of Washington law professor Hugh Spitzer about the merits of Eyman’s lawsuit.

“I took a look at the cap & trade law (E2SSB 5126) and at the definition of ‘tax’ in RCW 43.135.034,” he said via email. “Despite OFM staffers’ conclusion that the cap & trade legislation should be subject to an advisory vote, I tend to agree with the Attorney General’s conclusion. There doesn’t seem to be anything in the cap & trade auction system or the rest of that bill that constitutes a ‘tax,’ as commonly understood.”

Spitzer went on to explain his reasoning.

“He basically defined taxes as anything that brings in revenue to the State government,” Spitzer said of Eyman’s Initiative 695 in 1999 repealing the state’s car tax and replacing it with a flat $30 annual fee. “The state Supreme Court ruled that the definition is way too broad, and ‘taxes,’ as commonly understood by the public, don’t include many revenue-generating sources, like electricity rates or fees paid when people apply for licenses.”

I have applied that reasoning to the cap and trade legislation.

“In this instance, there might be revenue accruing to the State, or at least moving through the State, by virtue of the cap & trade mechanism,” Spitzer said. “But I didn’t see any ‘taxes’ there.”

That wasn’t quite all the professor had to say.

“I think that even after 15 years and lots of court decisions, Eyman might not understand that taxes are different from rates and fees (or cap & trade auction revenues),” Spitzer said. “Maybe he is stuck in his 1996 idea that there revenues to state government are ‘taxes.’”

Still, under the cap and trade legislation, drivers could end up seeing the state’s portion of the gas tax – almost 50 cents per gallon – nearly double.

As first reported by the Washington Research Council, an analysis from Vivid Economics and its parent McKinsey & Company for the state Department of Ecology projected the cost of a metric ton of carbon dioxide to be $58.21 next year.

That’s much higher than the $20.60 per metric ton figure used for the cap-and-trade legislation’s fiscal note provided to lawmakers.

“That would add a tax of about 52 cents per gallon or just over 46 cents per gallon for fuels required to include 10% ethanol in accordance with Washingtons state law,” Todd Myers, environmental director for the free market Washington Policy Center think tank, explained in a blog post.

He added, “For diesel, the tax on CO2 emissions would increase the cost of a gallon by about 59 cents per gallon, or 56 cents per gallon for fuels that include 5% biodiesel.”


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