Are taxes on WA ballots worth it? This is how much money they brought to Tri-Cities

In our Reality Check stories: Tri-City Herald journalists work to hold the powerful accountable and find answers to critical questions in our community. Read more. Story idea? [email protected].

Two controversial state taxes in Washington have returned more than $150 million to the Tri-Cities this budget cycle for energy research and to help children.

As political pressure mounts to convince voters whether Washington’s capital gains and Climate Commitment Act taxes are worth keeping, the numbers show that the Tri-Cities has been one of the areas seeing the most benefit has emerged from these funds.

While both taxes are controversial, only the Climate Commitment Act’s impact on gas prices hits Tri-Cities’ pockets.

Nearly half of all the money contributed to the capital gains tax pool — $536 million of $1.2 billion — each year comes from the state’s top 10 ultra-wealthy taxpayers.

State data shows only 38 households in Benton and Franklin counties have had to pay the capital gains tax.

In turn, the taxes created an estimated 340 jobs in the area.

Washington voters will decide Initiative 2109 and Initiative 2117 in the November 5 general election.

Initiative 2109 on capital gains

Capital gains tax funds support child care and education, while Climate Commitment Act money supports youth transit in the Tri-Cities as well as clean energy research projects.

For the 2023-25 ​​budget, the capital gains tax will provide about $11 million directly to the Tri-Cities area for child care between new child care and preschool spending, as well as subsidies to help centers pay workers competitive wages.

The tax is 7% and only applies to gains above $262,000 on the sale of stocks, bonds and business interests. This does not include profits on real estate.

In Benton and Franklin counties, it has helped keep child care centers running and created space for 675 affordable child care spaces.

That money — nearly $400 million for the biennial period — helped fill a funding gap that was described as a “child care cliff” due to the loss of federal pandemic-related money.

Experts say helping reduce the cost of child care is critical at a time when it costs many families as much as it costs to send a child to college, an average of about $11,000 a year in the Tri- Cities area.

Another $500 million went to school construction projects, with $86 million going to the Tri-Cities alone.

The Tri-Cities had the third and fifth largest allocations for projects on the school construction list, with $35 million for the renovation of the Tri-Tech Skills Center and $51 million for Pasco’s new high school.

Spokane and Yakima counties each received a total of about $19 million, much of it just from child care funds.

Only Pierce County and King County received more than the Tri-Cities, according to an analysis by the Washington State Budget and Policy Center.

Initiatives 2117 op Climate Commitment Act

The Climate Commitment Act has sent at least $35 million to the Tri-Cities, along with tens of millions more that could impact the area’s energy research and agriculture industry.

It has enabled Ben Franklin Transit to make bus rides completely free for young people. The transportation company collects more than $5 million annually from taxes.

It also sent $25 million to Energy Northwest to continue its new nuclear development efforts.

The tax pays for cutting-edge clean energy research across the state and agricultural support, but much of it is focused on the Tri-Cities and Central Columbia.

A prominent example is a nearly $1 million per year lease for the Institute for Northwest Energy Futures at WSU Tri-Cities in Richland, plus millions more in funding for the project itself. The state says that without these funds, WSU would have to pay more than $800,000 a year for that lease.

Another $30 million has been allocated to farmers to recoup fuel costs, which were affected by producers raising costs for fuels that should have been exempt.

It also helps farmers reduce food waste by encouraging partnerships with food banks.

Other tax-funded research and projects in the Tri-Cities area include:

• $7.5 million for PNNL Regional Energy Analytics Capability

• $2.75 million for the Connell Community Green Ammonia Project

• $5 million for the Pasco Water Reuse Facility project

• $7.7 million for NW Energy Futures

• $3 million for HAPO Center

• $527,000 for Columbia Basin College CBPS utility meters

• $435,000 for air quality monitoring stations in the Finley area

• $5 million for Island View to Vista Field Trail System

• $1 million for improvements to Aaron Drive and Highway 240

• About $500,000 in the Tri-Cities for several electric vehicle charging stations

• $10 million for the design and construction of a dairy digester to produce renewable energy and compost from manure sources, post-consumer food and compostable waste

• $3 million to reduce greenhouse gas emissions associated with manure handling systems on dairy and livestock farms

• More than $100 million in funding for salmon habitat restoration and protection, including removing barriers to fish passage

According to the Washington Office of Financial Management, several of these clean energy projects that are not fully funded would immediately lose money.

About 675,000 Washington households also qualified for a $200 rebate on their electric bills.

Who pays for it?

Capital gains taxes raised about $1.2 billion over these two years.

The state says 26 people in Benton County and 12 in Franklin County contributed to that pool.

The vast majority of funding comes from the Puget Sound. It is paid largely by the ultra-wealthy in the Seattle area, with about 2,200 of the estimated 3,900 payers coming from King County alone.

A third of the money, $142 million, came from this year’s top 10 payments, and half, $394 million, came from the previous year’s top 10.

The Climate Commitment Act raised a total of $2.1 billion.

But the tax, which resulted in an estimated 50 cents per gallon increase in gasoline costs, is difficult for many to stomach. The tax was not intended to affect gas prices in this way; the state’s biggest polluters would finance the tax.

However, according to a Seattle Times analysis, polluters simply passed the costs on to taxpayers at the pump before they had to pay.

The law lacked enforcement mechanisms to prevent gas companies from passing on the price to consumers and farmers.

Tri-Cities lawmaker April Connors, a Republican representative in the 8th Legislative District, introduced a bill to reallocate some of that money to the price of car tabs, but it was rejected.

The state later offered the electric bill discount as a way to offset the impact on ratepayers.