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Inslee hints he may impose cap-and-trade by executive order

January 9, 2014
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Washington lawmakers of both parties say it will be hard enough to sell taxpayers on a transportation plan that requires an increase in the gas tax of up to 11.5 cents a gallon, and Gov. Jay Inslee's veiled threat to impose cap-and-trade legislation that could add $1 or more to the price of a gallon of fuel aren't helping at all.

Washington lawmakers of both parties say it will be hard enough to sell taxpayers on a transportation plan that requires an increase in the gas tax of up to 11.5 cents a gallon, and Gov. Jay Inslee’s veiled threat to impose cap-and-trade legislation that could add $1 or more to the price of a gallon of fuel isn’t helping at all.

Gov. Jay Inslee on Thursday ignored pleas from leaders of both parties and both houses of the Washington State Legislature to deny rumors he intends to impose by executive fiat a cap-and-trade plan that could raise gasoline prices by an estimated $1 to $1.20 a gallon.

“I find that very surprising,” he said when told of the lawmakers’ concerns. “We’ve had dozens of meetings over many months about these things, and not once has anyone come to me and said we have to make a choice between people getting to work every day and failing to deal with the problem of climate change.”

Inslee said he would have more to say on the subject in Tuesday’s State of the State Address but, in the meantime, he steadfastly refused to promise he would not impose costly carbon penalties on oil companies as a way to discourage driving and jumpstart the development of alternative fuels.

Inslee and legislative leaders made their comments at an event in Olympia sponsored by the Associated Press previewing the upcoming legislative session. Transportation, most agreed, is virtually certain to be the most contentious issue on the agenda this non-budget year, with lawmakers being asked to find common ground between two differing visions.

Democrats are pushing plan passed by the House last year calling for $10 billion in construction projects funded by a 10.5-cent-a-gallon increase in the gas tax. Republicans are offering an even bigger package — $12 billion and an 11.5-cent increase in the gas tax, but only if Democrats agree to a package of transportation reforms.

Jay Inslee

Jay Inslee

Those reforms include revisiting how the state calculates prevailing wages when bidding construction projects and a pledge from Inslee to forget about cap and trade – a compromise the governor seems all but certain to reject.

“We’ll be doing a very thorough examination of all the issues,” he said, “but we have not made a decision yet as to whether to consider (an executive order).”

Under cap-and-trade, the state would determine a limit on the amount of emissions a company could discharge and sell permits. Firms are required to hold a number of permits – known as carbon credits — equivalent to their emissions.

The total number of permits cannot exceed the cap, limiting total emissions to that level. Firms that need to increase their volume of emissions must buy permits from those who require fewer permits.

Inslee, who last fall signed an agreement with the states of California and Oregon, along with the Province of Vancouver, B.C., to impose cap-and-trade in Washington, on Thursday denied the practice is a tax.

“The people say it’s a tax are dead wrong,” he said. “It’s a legislative means to encourage companies to conserve energy and develop alternate fuels.”

However it’s defined, though, the regulations would force oil producers to pay billions, with the expense passed on to consumers at the pump. And with state lawmakers on both sides of the aisle already facing a tough selling job for a 10.5- or 11.5-cent-a-gallon increase, the prospect of an extra $1 or more being imposed by executive decree – without a vote of the Legislature, let alone the taxpayers – would be a public relations nightmare.

“Look at the polls,” said Sen. Curtis King (R-Yakima), who co-chairs the Senate Transportation Committee. “See what people already think about paying 10 cents a gallon more. Then ask yourself how they’d feel about another dollar on top of that.”

“This would make a difficult job impossible,” said Sen. Mark Schoesler (R-Ritzville). “I would hope the governor would agree to promise not to pursue something like this.”

Sen. Tracey Eide (D-Federal Way) and Rep. Judy Clibborn (D-Mercer Island) agreed the timing was terrible for a potential power play by the governor.

For his part, Inslee said he wasn’t hopeful Republicans would approve a transportation package this session anyway, “given my knowledge of where the party of Teddy Roosevelt is today.” But even as he refused to close the door on his own pet issue, Inslee called on lawmakers from both sides to give a little.

“Compromise is the watchword this session,” he said. “We’ll all have to check our egos at the door.”

 

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