Climate commitment act revenue will not be used for tax relief this year as Washington Dems floated

Legislators have pivoted from a Democrat-backed plan to use hundreds of millions in revenue from the state’s climate commitment act to plug a billion-dollar shortfall.

Budgetary proposals from Gov. Bob Ferguson and the House of Representatives earlier this session called for as much as $629 million in revenue from carbon emission auctions to be spent largely to maintain tax rebates for low- and middle-income families.

A House version would have similarly spend $330 million from climate commitment revenue for the same program and another $200 million for construction projects.

The Climate Commitment Act seeks to reduce greenhouse gas emissions in Washington by requiring the state’s top emitters to buy credits for the greenhouse gases they release in quarterly auctions. Signed in 2021 by former Gov. Jay Inslee, it’s largely seen as a cornerstone piece of legislation to come from his administration; it seeks to reduce overall emissions in Washington by 95% by the year 2050.

Over the years, auctions have raised over $3 billion for the state, and about half of that has been spent so far on approved projects intended to reduce emissions. About $65 million of that has been spent on 206 projects in Spokane County, including on energy-efficiency initiatives in public buildings, public transportation, electric vehicle charging stations and forest maintenance.

While lawmakers instituted the act largely under the justification of slowing human-caused climate change: to recycle money from the biggest polluters into environmental initiatives, the law also allows for revenue to be spent on the Working Families Tax Credit.

This would have been the first year that happened, but negotiating lawmakers from each chamber went with a Senate version of the plan that doesn’t tap climate monies for tax breaks.

“That was not the Senate position as we passed our budget,” said budget negotiator Sen. June Robinson, D-Everett.

Instead, the negotiated budget relies on the tax on income above $1 million to expand eligibility to the Working Families Tax Credit from those age 25 and up to those at least 18. That tax only goes into effect in 2029. Some 460,000 more households will qualify, Ferguson estimated earlier this month, and they’d be sent between $300 and $1,300 each year from the state.

“That’s money straight back into the pockets of working families,” Ferguson said.