(The Center Square) – Senator Marko Liias, chairman of the Senate Transportation Committee, made sure to point out that there is no gas tax increase for drivers in the state of Washington in the 16-year, $16 billion transportation package dubbed “Go Ahead Washington” by its editors.
Todd Myers, director of the Center for the Environment at the Washington Policy Center, argues that Liias is playing puns in making this claim about the transportation spending plan that involves Senate Bills 5974 and 5975 and Internal invoices 2118 and 2119.
“We’ve heard loud and clear that working families are still dealing with this weight of the economic burden caused by the pandemic,” Liias said at Tuesday’s virtual press conference where Democratic transportation leaders unveiled funding and proposed transportation projects. “That’s why there is no gas tax in this package.”
But Myers points out that the cap and trade legislation was passed in 2021 by the Legislature and signed into law by Governor Jay Inslee – Senate Bill 5126or the Climate Commitment Act (CCA) – will have the effect of increasing the tax on petrol from next year.
On Thursday, Myers tweeted, “Really their plan is based on a gas tax that starts at 18 cents per gallon in 2023 and increases to 30 cents per gallon in 2030.”
Indeed, the carbon pricing program that became law last year requires the state’s largest emitters, like refineries, to buy credits for permitted emissions if they exceed a cap set by regulators.
Myers relied on the tax note for SB 5126 in the making of its case. A spreadsheet on page 121 of the tax memo provides the numbers Myers used to arrive at his conclusion.
The tax note contains projections for the minimum floor price.
“To the right there’s a column for ‘Low/Floor Price,'” he explained in an email to The Center Square. “These are the numbers I use to estimate the gas tax. There is a footnote for this column.
Myers went on to say, “The text (found on page 120) reads: ‘Quotas are assumed to be purchased at the floor price to provide a conservative estimate of revenue. The actual pricing of allowances will depend on the supply and demand for allowances. Floor prices are based on projected floor prices for the State of California, which are expected to increase by 7% each year. This notes that actual prices will be higher than this and that these numbers are the floor.
Myers showed his work, so to speak.
“Each gallon of gas emits [carbon dioxide] equivalent to 0.89% of a metric ton,” he said.
The 0.89% figure comes from 19.4 pounds of carbon dioxide from one gallon of gasoline, divided by one metric ton, or 2,204.6 pounds.
This means that if a metric ton of carbon dioxide at the 2023 low/floor price of $20.60, then a gallon of gasoline is 0.89% of that, or just over 18 cents. Applying this same formula to the low/floor price of $33.73 in 2030 results in an increase to 30 cents.
Myers supported his case by referring to a state law which notes that the Ministry of Ecology “cannot sell allowances at offers lower than the floor price of the auction”.
While Liias did not respond to an email from The Center Square seeking comment on Myers’ take, the Lynnwood Democrat defended his position in a heated back-and-forth. Twitter conversation with Myers.
“Finally we come to a truth! #MoveAheadWA is simply allocating revenue from the bill we passed last year,” Liias tweeted. “So like I said from the start, my bill has no gas tax. Another bill passed last year, SB 5974 invests those resources in needed projects around the state. We agree!”
Liias had previously tweeted as part of a conversation: “I understand why others are confused, but you are deliberately lying. The CCA imposes no tax, it forces polluters to buy allowances through an auction. The economic impacts are therefore projections based on assumptions. Until the auction takes place, we don’t know. Stop lying!”
Although there is no direct gas tax in the transportation package, it does include a 6 cents per gallon tax on fuel exports.