The cost of repealing state laws on climate, health and capital gains

As the nation faces one of the most important elections in its history, with parallels eerily similar to 1860 and 1932, similar issues, divisions and questions are playing out in Washington.

My colleagues Claire Withycombe and Jim Brunner have been reporting on the recent legislative session. The Legislature is controlled by Democrats, and that party holds all the state’s top elected offices. But Republicans pushed through three key initiatives that go to the voters in November.

One affects the future of the state’s climate cap-and-trade law, the second concerns a payroll tax funding long-term care insurance benefits, and the third is about whether Washington should have a capital-gains tax on the richest investors.

Gov. Jay Inslee said, “Those initiatives jointly would gut … would kneecap, would blow a hole in all of these benefits Washingtonians are now enjoying.”

House Republican Drew Stokesbary of Auburn said, “I think we did a pretty good job this session, stopping us from continuing to go in the wrong direction.”

The Legislature has never forwarded three initiatives to the voters in a single year since the state adopted the initiative and referendum process in 1912 (Washington was one of the first states to decide on this policy where citizens can make or repeal laws and to provide some control over the Legislature.)

The initiatives have economic ramifications for the state and the planet.

Earlier this week, the United Nation’s World Meteorological Organization issued a report stating that the planet faced a “high probability” of another year of record-setting heat in 2024.

“Earth’s issuing a distress call,” U.N. Secretary-General António Guterres said. “The latest State of the Global Climate report shows a planet on the brink. Fossil fuel pollution is sending climate chaos off the charts.”

This comes after a stream of studies and reports by scientists who study climate and conclude that climate change is real, human-caused and happening faster than they feared.

In Washington, it’s been an extraordinarily warm winter. The summers have seen forest fires sending smoke as far as Puget Sound.

Climate change is warming the ocean, putting at risk the fisheries that Seattle-area fishing fleets depend upon. Global warming is affecting agriculture, too. For example, state cherry growers received federal assistance after suffering a loss of $100 million this past summer.

According to an article in the magazine Nature this past year, climate change will cost the U.S. economy $143 billion a year.

This is what the Climate Commitment Act, passed in 2023, was intended to address. Among its provisions was the sale of greenhouse gas emission allowances to the state’s largest polluting businesses in quarterly auctions.

Yes, gasoline prices here shot up to the highest in the nation at certain points in time. This gives critics plenty of ammo. But if we don’t keep fossil fuels in the ground, we stand no chance of combating the existential threat of global warming.

I wouldn’t be the first to quip that some of the most vocal tree-huggers leave a climate-action rally and drive home. In the Evergreen State, Happy Motoring rules, even in the Seattle area with its abundant transit.

The usual complaints about addressing climate change at the state level include how meaningless it is with the world’s biggest emitters of greenhouse gases doing little or nothing to address the problem. Other states are facing roadblocks. For example, California’s aggressive efforts to reduce emissions by 40% of 1990 levels by 2040 are falling short, according to an analysis by the nonprofit group Next 10 and Beacon Economics, consulting firm.

As for the payroll tax to finance long-term health benefits — the Washington Cares Fund — we would be the first state to deduct money from workers’ paychecks in order to pay for residents who can’t live independently because of sickness, injury or age-related illnesses such as dementia.

The initiative wouldn’t kill the law. Instead, it would allow anyone to opt out of the fund.

To be sure, the law provides certain exemptions and allows some workers to opt-out of the tax. For example, workers are eligible for exemptions if they live outside of the state, are the spouse or registered domestic partner of an active-duty member of the armed forces, possess a nonimmigrant work visa, or are a veteran with a hight rating of service-connected disability.

Repealing the capital gains tax on the wealthiest investors is an understandable response for a state that lacks an income tax. That’s an easy sell for many average people who aspire to get rich and resent government spending.

The tax is especially unpopular among tech and startup sectors of the economy.

Yet the tax produced nearly $900 million this past year. Rolling it back would mean cuts in numerous state programs, many of them essential.

Providing the majority ($6 million) of funding for these initiatives is Brian Heywood, a hedge-fund executive who moved here from Arizona.

Once again, the question is what do Heywood and his supporters offer as constructive measures in return for victory? None that I can find.

Red states have been doing well lately, in comparison with their underperformance versus blue states in recent years. But much of the credit can go to warm weather and the continuing draw of the Sunbelt.

Washington has been an outlier, enjoying one of the strongest state economies in the nation. So has California which, for all the negative portrayal of the Golden State, is on target to overtake Germany as the world’s fourth-largest economy.

The repeals may well happen and we will live with the consequences. So, as with the folks who are hysterical about my favoring the First Avenue Streetcar in Seattle (which will never be built), don’t be sore winners. Offer something based on facts, not fantasy.