Soda taxes and pollution fees: What’s your stance on carbon?
Washington voters will be asked to take a stand on carbon via the the 2018 November ballot — from very different angles. Initiatives are being proposed for a new carbon pollution fee, and also for safeguarding carbonated beverages from added taxes.
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Former Washington State Attorney General Rob McKenna says that voters can expect a “war of rhetoric” as opposing sides fight to pass, or defeat, the initiatives.
I-1643: Keep groceries affordable aka “no soda taxes”
Initiative 1634 aims to prevent cities from mimicking Seattle’s recently imposed sugary drink tax, McKenna said. The initiative is promoted by the organization Yes! to Affordable Groceries. While the word “groceries” is prominent throughout the initiative, it’s primary target is likely soda and sugary drinks. Food is generally not taxed in Washington.
“This tax is designed to rein in the taxing authority of local governments, starting with the City of Seattle that imposed a soda tax,” McKenna said. “And the counter punch by the grocery industry is to take away the city’s authority to impose taxes on specific products. Although they do carve out alcoholic beverages, marijuana, and tobacco; local governments would still have discretion there. And regular food is not taxed anyway right now.”
“Interestingly, this proposal does not call out soda specifically in the language,” he said.
The I-1634 effort is backed by the soda industry with four of the world’s largest beverage companies pushing it forward. The Seattle City Council approved a sugary drink tax in 2017. It went into effect Jan. 1, 2018. It didn’t take long for Seattle customers to start noticing the rather steep rise in many beverage prices. It nearly doubled the cost of soda at Costco, for example.
The initiative could be viewed as a response from the industry that Seattle’s tax affects. McKenna says that the way the initiative is worded will likely help it pass.
“Here’s why this measure is probably going to pass: It’s title is ‘An Act Relating to the Taxation of Groceries.’ That’s as far as most people will go,” McKenna said. “The short title is ‘Keep Groceries Affordable Act of 2018.’ Again, most folks are not going to read much farther than that and it will probably pass as a result.”
I-1631: Not a tax, but a carbon fee
Initiative 1631 is Washington state’s latest effort to place an added cost on carbon polluters. It aims to get around lawmakers in Olympia — who have failed to pass a carbon tax in recent years — and impose a fee on carbon. Money raised would go toward clean energy in the state.
It sounds simple enough, but McKenna says a fight is brewing over the specifics of the issue. Voters may have the opposite reaction to the carbon fee than with the carbonated beverage initiative. They are wary of any initiative that can result in added costs to them.
“It’s conceivable they could promote clean energy by actually providing subsidies to alternative energy like solar and wind, for example,” McKenna said. “They also say they want to address climate impacts on the environment and communities, although it’s not entirely clear how that will work.”
“The main point, frankly, of this initiative is to make carbon-based energy sources more expensive,” he said. “I think opponents of this measure will immediately start characterizing this as a higher-gas tax, because fees imposed on refineries will get passed through to consumers as higher products costs.”
Clean energy in Washington state, ever since Initiative 937, excludes nuclear and hydro-electric power. So “clean energy” as defined by state law is limited to sources like wind and solar. The other form of energy, fossil fuels, will be subject to the carbon fee. That will be the main opposition to the initiative.
“Opponents are going to come out and say, ‘Hold on, what you are really doing is making energy more expensive, and that is going to be passed through to you as a consumer,’” McKenna said. “So they will just call it a gas tax and that will be the war of rhetoric that we’ll see through to the November election.”