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Thursday, May 26, 2022

Inslee’s Big Veto Gamble in Two Major Climate Bills

When Gov. Jay Inslee vetoed chunks of the two marquee climate bills the Legislature passed this year, he picked at least two fights and took a significant political gamble. Inslee mostly signed but partially vetoed Senate Bill 5126, the cap-and-trade bill, and House Bill 1091, which establishes a low-carbon fuel standard.

As part of a so-called “grand bargain,” both bills contained language that wouldn’t let them fully take effect without a 5-cent increase in the state’s gas tax, which is already among the highest in the country. That effectively made the energy bills into hostages for passage of a big transportation spending package, which would require such a gas tax increase to widen congested highways and replace rickety bridges. With his vetoes of those links to the gas tax increase, Inslee essentially shot the hostages so asphalt-obsessed lawmakers couldn’t drag them away and use them to extort highway projects. The question is, will it work?

The two vetoes were subtly different. In vetoing the tax provision out of the cap-and-trade bill, the governor cut a whole section of the bill, which is clearly allowed under the state Constitution. But on the low-carbon fuel standard, Inslee vetoed only the subsection containing the link to the gas tax increase, which is generally not OK. That distinction is there to keep the governor from radically changing a bill by surgically deleting key language.

Leading Democratic lawmakers, including House Speaker Laurie Jinkins and Senate Majority Leader Andy Billig, immediately cried foul, accusing a governor of their own party of overstepping his authority and usurping the Legislature’s powers. Inslee, meanwhile, argued that the Legislature was the branch of the government behaving badly in this scenario by deliberately burying the gas tax provision in a larger section to avoid a veto.

That’s a straight-up separation of powers fight, more about the principle than the policy in the bill.

The fight over the substance is between Inslee and a small group of moderate Democratic state Senators led by Sen. Mark Mullet, the architect of the gas tax provision. Mullet, D-Issaquah, yoked the gas tax to the low-carbon fuel standard in the Senate and then sent a highly unusual letter threatening to torch the bill if the connection were broken. Mullet later relented on some other demands, but the link to the gas tax remained.

To be clear, the linkage had many fans. A transportation package means jobs for organized labor, lucrative contracts for big construction firms, and much-needed projects for communities around the state. After Monday’s veto, Mullet accused Inslee of blowing up a carefully negotiated deal in bad faith. “This sets a chilling precedent and poisons the well for all future negotiations on virtually any tough issue,” Mullet wrote in a statement.

However, it’s not clear anyone ever tried to actually seal this deal. The prospect of Inslee’s vetoing the gas tax provision was among the hottest topics of conversation among Legislature-watchers this year, so it’s not like the idea was somehow novel. Apparently, neither Mullet nor any of the other players ever got around to asking Inslee not to shoot the hostage. “At no point did legislators ask the governor or the governor’s staff for assurances the provision would not be vetoed,” Mike Faulk, Inslee’s press secretary, told me in an email. “Any time the question of the transportation link came up, the governor and staff were clear the governor was not supportive.”

Just because a hostage tacitly agrees to be a hostage to avoid getting shot in the head doesn’t mean he or she wants to be a hostage. Many progressive lawmakers would be reluctant to support the kind of highway-rich transportation package that Mullet and company want, which is why they wanted the hostages in the first place. Some were happy to see the veto ax fall.

“The transportation contingency was bad lawmaking and I’m not sad to see it go,” said House Environment and Energy Chair Joe Fitzgibbon, D-Burien, the sponsor of the low-carbon fuel standard. “We still need a transportation package, but it should pull its own weight, not try to hitch a ride on other policy bills.” (Fitzgibbon said he did not seek a veto, and Faulk said no other lawmaker approached the governor’s office for one.)

Now, it’s absolutely clear that the Legislature did intentionally bury that provision to veto-proof it. The question is whether that’s legal, or whether Inslee was within his rights to veto it. So we’ll venture once more onto the fragile spring ice of journalists practicing law:

In his veto message, Inslee cited a Washington Supreme Court case from the 1990s, in which the justices upheld Gov. Mike Lowry’s line-item veto of a bill in which the Legislature had grouped 103 different actions in a single section to avoid the veto. While the Supremes found that just a little too rich, they generally reserved the what’s-a-section/what’s-a-subsection issue for the Legislature and declined to lay out clear rules, figuring they might lead to still more gamesmanship.

“Our constitution condones neither artful legislative drafting nor crafty gubernatorial vetoes,” the justices wrote. “We expressly decline to offer bright-line definitions of legislative or gubernatorial manipulation.” Short version: Try to play nice in the sandbox; come see us when things come to blows. So handicapping the court’s future decision is tough.

There are plenty of pragmatic reasons for Inslee to want to get rid of the gas tax linkage, which poses considerable risk to the short-term success of the program.

The low-carbon fuel standard is set to kick in come January 2023, and it’s in no way clear that the Legislature would have gotten its act together to pass a transportation package with a gas tax increase before then. While there’s a long list of projects that lawmakers want to tackle, the draft packages released by the House and Senate transportation committees were wildly divergent and any package would involve significant other tax increases.

Also, a traditional transportation package would involve the Legislature authorizing bonds, something that requires a 60 percent supermajority in both the House and the Senate. That would require Republican votes, something the minority may be in no mood to provide to save a bill they unanimously opposed. House Minority Leader J.T. Wilcox said as much at the end of the session.

Meanwhile, one of the major premises of the low-carbon fuel standard is that it’s supposed to drive major new investments in biofuel production and electric car infrastructure in Washington. Investors might sit on their money if the effective date of the law is unclear.

Finally, if the issue had been pushed into 2023, Inslee would be dealing with a new and potentially less friendly Legislature. So if the veto gamble pays off, Inslee surely finds an unencumbered low-carbon fuel standard well worth a few butthurt lawmakers.

But if the Supremes side with the Legislature, Inslee’s bet might look ill-advised. The dynamics on the transportation package likely won’t change before the court rules, so Inslee could wind up with both the hostage situation and the bad blood in next year’s short session. And if that situation persists into 2023, there’s an entirely plausible scenario in which Democrats have lost two or more seats in the Senate, leaving Mullet and his faction with even more power.

A version of this story appeared in the author’s state politics newsletter, the Washington Observer.

Paul Queary
Paul Queary
Paul Queary, a veteran AP reporter and editor, is founder of The Washington Observer, an independent newsletter on politics, government and the influence thereof in Washington State.

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