A group of Utahns wants to persuade the state’s voters in 2020 to pass a carbon tax that they say could diminish reliance on fossil fuels and generate $75 million per year for local air quality initiatives.
Five Utah residents earlier this month filed paperwork laying the groundwork for a ballot initiative to tax carbon dioxide at $11 per metric ton starting in 2022 that would be paid by power companies, other major corporate users and motorists. Yoram Bauman, a Salt Lake City economist who’s helping to lead the push, says the proposal’s language is modeled after a bill that has failed in the state Legislature.
Lawmakers don’t seem willing to pass a carbon tax, and Bauman says the stakes are too high to let the issue stall.
“We think that the air pollution issues throughout this state are just something that the Legislature has not taken seriously enough,” he said in a Thursday phone interview.
The proposal is expected to cost consumers when they pump gas or pay their electricity bill, roughly 10 cents per gallon of gasoline and 0.8 cents per kilowatt hour of electricity, Bauman said. These additional consumer costs would be offset by eliminating the state sales tax on food, creating a 20% state match for the federal earned income tax credit and expanding the retirement tax credit.
"As an economist, I would say that it's a very smart way to go to tax bad things that you want less of instead of taxing good things" such as groceries, Bauman said.
About $75 million in revenues from the tax would go toward clean air projects such as replacing wood-burning stoves or gas-powered lawnmowers. Another $25 million would pay for rural economic development.
But the carbon tax proponents have some work to do to put their idea to a vote in 2020.
Over the next month, the governor’s budget analysts will study the fiscal implications of the proposed initiative. After that, the measure will go up for discussion at a series of public hearings across the state, according to Justin Lee, Utah’s elections director.
To get the initiative onto the ballot, Bauman and other carbon tax supporters must gather about 115,000 signatures that represent at least 10% of active voters in 26 of 29 state Senate districts, Lee said.
The carbon tax proposal is the only initiative effort that has been submitted to the state so far for the 2020 elections, he added.
Utah voters last year weighed in on seven ballot measures, including Proposition 2 to create a medical cannabis program and Proposition 3 to expand Medicaid. State legislators have since replaced those two successful initiatives with laws of their own making.
In 2016 in Washington, Bauman led the nation’s first state ballot measure to enact a carbon tax. However, the initiative failed with only 42% support from the state’s voters.
But Bauman said the proposal under consideration in Utah is crafted to be mindful of state residents and businesses.
Agriculture, mining and manufacturing companies would pay a lower tax so they could stay competitive with out-of-state businesses, he said. And the various proposed tax cuts and credits would help consumers.
Increases to the tax rate would also happen gradually, he said. While the carbon tax would start at $11 per metric ton of carbon dioxide, it would climb over time to about $15 per ton in 2031 and $20 per ton in 2040, up to a maximum of $100 per ton.