Capital gains tax, LCFS within reach next session

Democrat lawmakers and Governor Jay Inslee for years have sought to enact a variety of tax and regulatory proposals that have failed due to bipartisan opposition from key legislators in both chambers. However, the Nov. 3 election concluded with four incumbents trailing their opponents, which could result in an overall stronger Democrat majority in both chambers, making a low carbon fuel standard (LCFS) and a capital gains tax more likely outcomes of the upcoming legislative session in January. …

A defeat of Mullet could also trigger internal changes within Senate Democrat committee leadership that to date has kept an LCFS proposal from passing since it was first introduced in 2017. After numerous failed attempts in the legislature, the Puget Sound Regional Air Agency (PSRAA) introduced its own proposal before shelving it for the 2020 legislative session, where another LCFS bill in the Senate met intense opposition. An LCFS program regulates the carbon intensity of fuels, requiring entities that sell fuel above the standard to buy credits from entities such as biofuel producers. California and Oregon are both in the process of implementing LCFS programs. One of the primary contentions that opponents have with an LCFS is cost – PSRAA’s own analysis estimated it could raise fuel prices in that region by $.57 per gallon.

Myers and others who oppose such a program also highlight the relative ineffectiveness of an LCFS compared to other greenhouse gas reduction projects.

“My concern is that data matters less and special interest pandering matters more,” Myers said. Given the amount of money and the nastiness of that (5th District) race and some others, I would be surprised if those legislators in their freshmen year turned their back on the special interests even for policies that are silly.”

The legislative session is scheduled to begin Jan. 11.

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