Many people are unhappy about the recent hike in the state fuel tax, especially since the average prices for gas and diesel were already much higher here than in every state except California and Hawaii.
But while that 6-cent jump is big compared to the other gas-tax increases our state has seen over the past century, the main drivers behind Washington’s inflated fuel prices continue to be the cap-and-tax law and the low-carbon fuel standard, both approved by majority Democrats in 2021.
Despite the cost they represent to families, especially those with lower incomes, no one has offered solid proof that either of these policies has made a real dent in greenhouse-gas emissions.
Meanwhile, the billions of dollars being raked in through cap-and-tax don’t seem to be going entirely where the law requires. And the financial harm from the low-carbon fuel standard is projected to get a lot worse, and sooner, because of a law passed this year.
Let’s take the fuel standard first. It isn’t known as well, probably because it hasn’t been challenged through a voter initiative like the cap-and-tax law was this past year – but make no mistake, it will cost you plenty at the pump.
This law forces the fuel industry to change the formulation of gas and diesel sold in Washington to reduce its “carbon intensity,” on the grounds that doing so might reduce greenhouse-gas emissions.
Generically speaking, it’s another regulation that dramatically increases the cost of doing business, and higher costs get passed along to consumers.
The original fuel-standard law was estimated to add 29 cents to the cost of a gallon within a decade, meaning 2031.
This year majority Democrats made radical changes that require a much lower carbon intensity but didn’t extend the deadline for compliance. The new law, created by House Bill 1409, is now projected to add 64 cents to the cost of a gallon of gas and 79 cents to a gallon of diesel, both as of 2031.
Also, it’s unclear whether fuel technology will advance quickly enough for the gasoline standard to even be met – which suggests the law could eventually serve as a backhanded ban on gas sales in our state. At the very least, it means we might see shortages of the more expensive fuel, as a result.
That would be music to the ears of legislators who think everyone should be driving an electric vehicle. And it’s no coincidence that the carbon-intensity deadline corresponds to the start of when only zero-emission vehicles can be sold new in our state.
More people are aware of the cap-and-tax law, officially called the Climate Commitment Act. The CCA basically turned greenhouse-gas emissions – carbon dioxide – into a valuable commodity by allowing the state to create and auction off carbon “allowances.”
We all know how former governor Inslee intentionally deceived the people when he claimed in 2022 that the financial effect of the cap-and-tax law would be “minimal” or “pennies.”
When the CCA took full effect at the start of 2023, fuel prices in our state began climbing. By that summer, Washington’s average gas price had become highest in the nation.
California, the only other state with a similar cap-and-tax policy, eventually regained the highest-gas-price title – but I doubt we’ve been out of the top three since then. And during the past two years, the cap-and-tax law is credited with adding a total of 46 cents to the cost of a gallon of gas and 56 cents for a gallon of diesel.
That includes the latest price jump tied to the CCA, calculated by the non-partisan Washington Policy Center to be 6 cents per gallon, which came between the year’s first carbon-allowance auction in March and the second in June.
To put it in perspective, legislators waited nine years to increase the state fuel tax by 6 cents. The Democrats’ cap-and-tax law had the same effect on the cost of gas in just the second quarter of this year. It’s a reminder of why the Let’s Go Washington folks had it right when they referred to the CCA as the “hidden gas tax” when promoting Initiative 2117 this past year.
Our calculations have the cap-and-tax law pushing gas prices up by another 24 cents per gallon by 2028. The low-carbon fuel standard is expected to add another 19 cents. And like a gas tax, those added costs are regressive, meaning they will take a proportionately bigger bite from a lower-income family’s budget.
It’s insincere for our Democrat colleagues to routinely complain about regressive taxes, only to turn around and vote for policies like these, which make Washington’s tax code even harder on those with less income.
Then there’s the hypocrisy regarding how CCA dollars are being spent. Washington’s constitution requires gas-tax dollars to go to roads and bridges only; the majority made sure cap-and-tax dollars could go to things that have nothing to do with transportation or reducing carbon emissions.
The cap-and-tax law established a “climate commitment account” in the state treasury, and details which projects, activities and programs are eligible for money from that account.
The very first item on the list is Washington’s working families tax credit – and if you go back and read the claims made by Inslee about what his cap-and-tax legislation would support, that tax credit is also listed prominently.
With that in mind, the “$ave Washington” budget developed and proposed by Senate Republicans this year would have funded the working families tax credit solely with cap-and-tax money, freeing up general-fund dollars for other priorities.
Oh, no, said the Senate Democrats, when we managed to force the first of two Senate floor votes on our budget – CCA dollars need to be used to “combat climate change and reduce carbon emissions.”
One of our senators refuted that in epic fashion. If cap-and-tax money is supposed to go only to carbon-reduction programs, he asked, why was it used to cut $200 rebate checks?
That’s right. The biggest appropriation of CCA money in 2024 was $150 million to fund a one-time, “clean energy transition” bill credit of $200 for an estimated 675,000 low-income residential electricity customers.
The timing was suspicious. I-2117, to repeal the CCA, had already been certified; the rebate checks were to be mailed by mid-September, not long before election ballots also went out in the mail; and those 675,000 customers would include a lot of voters.
Somehow, CCA money has also been distributed in the form of grants to big-city organizations that “specialize in bridging knowledge and cultural gaps through equitable community engagement and partnerships,” or “share their expertise and experience with racial justice, gender justice, climate justice, animal rights, economic justice, and environmental justice.” It’s difficult to see how those special-interest appropriations, like rebate checks, reduce carbon emissions.
No low-income energy-bill credit was funded in the new budget, which is revealing. But there’s something new this year: cap-and-tax money is being used to fund wage increases in 11 state agencies.
Criticizing the cap-and-tax law or the low-carbon fuel standard wouldn’t be so easy if either seemed to be reducing greenhouse-gas emissions in our state. But do a search for the state’s current greenhouse-gas inventory on the state Department of Ecology’s website, and you’ll find that it isn’t current at all.
Although it was published this past January, the data backing the greenhouse-gas estimates isn’t newer than 2021. That means it predates the CCA, the low-carbon fuel standard, zero-emission vehicle standards, “clean buildings” regulations and more.
We can and should keep a close eye on how the money generated by this latest gas-tax increase is being spent. Still, the people of Washington can at least see and drive on the roads and bridges that are built and maintained by the state gas tax.
The same can’t be said for cap-and-tax and the low-carbon fuel standard. We have no proof these expensive policies are making the lives of Washington residents better than those of our neighbors in Oregon and Idaho, where fuel is more affordable. Legislators must do better.
Sen. John Braun of Centralia serves the 20th Legislative District, which spans parts of four counties from Yelm to Vancouver. He became Senate Republican leader in 2020.
