Green vs. green: Will Washington sacrifice climate funds to fix budget?

With Washington facing a staggering $15 billion budget deficit, a fierce debate is brewing over whether money from the state’s Climate Commitment Act (CCA) should be redirected to help fill the budget gap. The funds, currently earmarked for climate-related projects, are being considered for use on public services like special education and the Working Families Tax Credit.

Democratic leaders, who control both chambers of the Legislature, are strongly resisting the move, arguing it would undermine voter-approved environmental investments.

Passed in 2021, the CCA established a cap-and-invest program requiring large polluters to purchase carbon allowances, generating billions of dollars for environmental projects. The funds have gone toward electric vehicle charging stations, free public transit for youth, wildfire prevention and clean energy investments.

While the law was challenged in a 2024 ballot initiative, voters decisively upheld it. During a media Q&A session on Thursday, Democratic leaders in both the House and Senate said that defeat showed strong public support for keeping the revenue dedicated to climate-related spending.

House Majority Leader Joe Fitzgibbon (D-Seattle) argued that shifting CCA money away from climate investments would break faith with voters.

“The Republican proposal sweeps all that dedicated investment into the general fund,” Fitzgibbon said. “That’s not keeping our promise to voters.”

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The deficit dilemma

But with a record-setting budget deficit looming, some lawmakers are questioning whether the state can afford to limit these funds to environmental projects when critical services are also under financial strain.

Fitzgibbon acknowledged it is legally possible to use CCA funds for the Working Families Tax Credit, but he warned that doing so would strip funding from clean air, clean water and forest health programs.

“That’s not what voters wanted,” he added.

Constitutionally, funding public schools is the Legislature’s primary responsibility. A $2 billion plan to upgrade and fund special education is on the table, relying on the general fund and potentially money from the recent capital gains tax on large stock sales. However, with the general fund expected to be stretched thin to cover the deficit, some lawmakers are eyeing CCA funds as an alternative.

Senate Majority Leader Jamie Pedersen (D-Seattle) was asked whether he would prefer to spend $150 million on electric vehicle charging stations or special education. Pedersen rejected the premise of the question.

“I don’t think we need to pick between the two,” he said. “Voters supported the idea that carbon fees should go toward reducing emissions and increasing climate resilience.”

He emphasized that the CCA funds were approved with the explicit understanding that they would be dedicated to fighting climate change, not plugging budget holes.

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A high-stakes budget battle ahead

Despite opposition from Democratic leaders, the pressure to tap into CCA funds may not go away. Republican lawmakers argue that, given the state’s severe financial strain, the money should be used to prevent cuts to essential services. They contend that while climate investments are important, funding education and working-class tax relief should take priority when the state faces such a massive deficit.

With budget negotiations heating up in Olympia, the fight over how to use CCA funds is shaping up to be one of the most contentious debates of the legislative session. While Democrats appear committed to protecting the money for climate-related uses, the question remains: Can they hold the line, or will the sheer size of the deficit force a compromise?

Matt Markovich is the KIRO Newsradio political analyst. Follow him on X.

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