Sierra Club Tries to End $33 Million in Corporate Tax Breaks for Oil and Coal

By Josh Feit February 24, 2009

New New Deal liberals (like my colleague Sandeep), who are pushing for tax increases to fund stimulus spending, are ignoring a giant place holder in the budget equation: Tim Eyman's I-960, which requires a two-thirds vote of the legislature to raise taxes. 

More than a few lefty legislators have flagged "Governor Eyman's" rule as the real impediment to taking an FDR approach to the $8 billion shortfall.

Eyman's rule has also prevented legislators from killing the Harry Potter-sized book of corporate tax breaks; doing so could bring in hundreds of millions in revenue. Unfortunately, Democratic leadership recently explained something about that liberal mantra that never occurred to me: Cutting tax loopholes is like raising taxes; so, that too would require a two-thirds vote.

But wait! The Sierra Club  is promoting a bill being sponsored by Sen. Craig Pridemore (D-49, Vancouver)—it's got  a public hearing this afternoon—that aims to get around Eyman's restrictions, and cut about $33 million in oil and coal industry tax breaks.


The trick: Replace those tax breaks with tax breaks for renewable energy—like for wind turbines. That way, the State wouldn't be "raising taxes." It's simply a tax shift.

"In the same bill that we end  tax breaks," says Craig Engelking, the Sierra Club's Zen lobbyist, "we extend and create others. We're shifting the tax breaks away from oil and coal and towards renewables and clean energy. By the time we're done with this bill it wont acutally raise any revenue for the state, it's simply a shift."

Even though coal and oil companies argue that they'll see a "tax hike," I-960 is about the the state's ledger not TransAlta's (the main benefactor of the break).If there's no new state revenue, there's no tax hike.  

Obviously, the Sierra Club strategy doesn't address the budget deficit, but it does, "align our tax incentives with our state policy objective to reduce global warming pollution," Engelking says. "If we don't do this," Engelking concludes, "It will be state policy to extend $33 million in tax breaks to oil and coal."

Lobbyists from TransAlta—House leader Rep. Richard DeBolt's (R-21, Chehalis, Centralia, Tumwater) employer, by the way—testified against the bill today, arguing that the tax break helps the company provide jobs, "clean coal" energy (here's why that's in quotes), and keeps the power running when alternative sources cannot.

Show Comments