COMMISSION
AGENDA MEMORANDUM
ACTION ITEM
Item No.
Date of Meeting
DATE:
September 10, 2024
TO:
Stephen P. Metruck, Executive Director
FROM:
John Flanagan, Senior State Relations Manager
Vy Nguyen, Strategic Advisor, Commission Office
10a
September 10, 2024
SUBJECT: Port of Seattle Commission Resolution Opposing Initiative 2177
ACTION REQUESTED
Request Commission introduction of Resolution No. 3827, a resolution in opposition of
Washington State Ballot Initiative Measure No. 2117, Concerning Carbon Tax Credit Trading, on
the November 5, 2024, ballot.
EXECUTIVE SUMMARY
During the general election in November, voters will act on four distinct ballot initiatives. The
most directly impactful to the Port of Seattle is I-2117, which repeals the State's existing carbon
credit trading system (the Climate Commitment Act/CCA) and prohibits the State from
establishing a new 'cap and invest' program in the future. If approved, I-2117 is expected to
reduce total state revenues by about $3.8 billion over the next five fiscal years (FY25-29).
Passage of the initiative would also require a $1.7 billion reduction in spending that was
approved by the State legislature during the 2024 legislative session. Those reductions have
direct impacts to stated priorities of the Port of Seattle both immediately and ongoing.
The enacted state budget provides funding from 'CCA revenue' for programs benefitting goals
1, 2, and 4 of the Port's Century Agenda. The most direct impacts are to ongoing environmental
programming, but due to other converging factors (culvert funding, diminishing gas tax
revenues, etc.), the impacts of I-2117 to the state transportation network are also expected to
pose major challenges for the State and the Port. Overall, passage would cause harm to the
Port's long-term goals, immediate and ongoing finances, and could cause wide-ranging issues
for years to come. Due to these anticipated outcomes; this resolution is brought forward by the
Port of Seattle Commission to assert the Port's opposition to Initiative 2117 on the November
2024 ballot.
ADDITIONAL BACKGROUND
Statewide
Template revised April 12, 2018.
COMMISSION AGENDA - Action Item No. 10a
Meeting Date: September 10, 2024
Page 2 of 12
As stated above, the overall impact of I-2117 equates to about -$3.8 billion for fiscal years 2025
through 2029. Because the State fiscal year runs from July 1 through June 30, the initiative also
affects $1.7 billion of spending that was approved by the Legislature during the 2024 legislative
session. The initiative applies prospectively to anticipated revenues generated by carbon
allowance auctions. If approved, the last carbon allowance auction would take place in the first
week of September 2024. The initiative does not impact any of the $2.15 billion generated by
the CCA prior to June 2024 or any of the projects or programs which received that funding. The
projected $3.8 billion reduction in revenue comes almost exclusively from cancelled auctions. If
the initiative passes, the enacted budgets stipulate that any unallocated CCA revenue will be
consolidated into two accounts (the Transportation Climate Emissions Reduction Account & the
Consolidated Climate Account). The State Legislature retains spending authority over those
accounts and resources until June 30, 2025.
In the most recent fiscal impacts statement on I-2117, the Office of Financial Management
estimated that spending authority of around $230 million would be available in the
Transportation Climate Emissions Reduction Account, and that about $650 million would be
available in the Consolidated Climate Account. OFM assumes that funding transferred to the
new accounts would continue to be spent through the end of FY25 or until revenues are
exhausted. Given the many variables and overlapping programs, it is difficult to predict whether
or how much of that funding may go unspent.
Table 1 (attached & below) details projected impacts to all State Treasury accounts that receive
CCA revenue. The second column provides several examples of programs and current uses
previously supported by the Port that are at risk of losing funding. Tables 2, 3, and 4 (also
attached & below) provide a more detailed snapshot of distributions within those accounts.
Again, the second column provides some information on notable FY25 expenditures that would
lose funding if I-2117 passes.
Port of Seattle
The 2024 supplemental transportation spending plan assumes the use of $1 billion in CCA
funding for future transportation projects. Absent new transportation revenue to backfill gaps
created by passage of the initiative, many of those projects will face delays or out-right
cancellations. Table 5 (attached & below) provides a snapshot of programs and projects that
are at-risk of either losing access to funding provided in the supplemental budget or that are
unlikely to receive funding as the Legislature is forced to make difficult decisions with scarce
resources. For example, the State needs to annually invest hundreds of millions of dollars in fish
passage barrier removal projects to meet the requirements of a federal injunction issued in
2013 and affirmed again in 2018 by the U.S. Supreme Court. Providing funding for shore power
or transportation planning for the World Cup is never going to rise to the same level.
The operating and capital budgets pose fewer shortfalls and budgetary challenges than
transportation, but the same over-arching issue applies. If voters approve I-2117, it is unlikely
that many of the Port's priorities that received funding from the CCA in the supplemental
Template revised September 22, 2016.
COMMISSION AGENDA - Action Item No. 10a
Meeting Date: September 10, 2024
Page 3 of 12
budget would be taken up with a new source of funding in the 2025 session. Again, Tables 6
and 7 (attached & below) provide detailed information on some programs and projects that
are important to the Port.
What's expected to happen in November?
Polling: Public polling began in January 2024 just after the Secretary of State's Office certified I2117 to appear on the ballot. From the outset, the initiative has consistently polled under 50%.
However, an unexpectedly large percentage of voters are reportedly 'undecided'. In mid-May,
Cascade PBS and Elway reported 41% in favor, 31% opposed, and 28% undecided. According to
the Seattle Times / UW poll that concluded on July 23rd, "48% of respondents said they expect
to vote yes on Initiative 2117, while 34% said they expect to vote no." At the time, that left 18%
of voters 'undecided' with about 15 weeks left in the campaign.
Fundraising: We should expect to see updated numbers in early September that will reflect an
up-tick in spending by the "No on 2117" campaign. According to the PDC, the 'no campaign has
raised just under $11M and spent about $1.5M, suggesting that a large earned media campaign
is coming. The 'yes' campaign, which is run and largely self-financed by hedge fund mogul Brian
Heywood, has raised about $12.6M and spent around $10.6M. Heywood has already stated
publicly that he will continue to subsidize the campaign from his personal assets if necessary.
Overall: It's a coin toss.
Table 1
Overview - All CCA Accounts
Notable
Account
Programs & SFY 2025
SFY 2026
SFY 2027
SFY 2028
SFY 2029
Uses
VMT
reduction
Alternative
Fuel
Infrastructur
e&
Carbon
Incentives
Emissions
Emission
($435,594,1 ($1,387,000 ($1,387,000 ($1,387,000 ($1,387,000
Reduction
reduction
25)
)
)
)
)
Account
programs
for freight
Ferries
Various port
and
maritime
activities
Template revised September 22, 2016.
COMMISSION AGENDA - Action Item No. 10a
Meeting Date: September 10, 2024
Transport
ation
Carbon
Emissions
Reductio
n
Account
Transit
agency
Climate
operating
Active
and capital
Transport
expenses
ation &
Bike/Pedestr
Climate
ian Safety
Transit
Grants to
Programs
expand
Accounts
transit
services
Implementa
Climate
tion of the
Investme CCA
nt
Tribal
Account
capacity
grants
Developmen
t of
renewable
and clean
energy
Grid
modernizati
on
Climate
Decarboniza
Commitm
tion of the
ent
built
Account
environmen
t
Industrial
efficiency
incentives
Climate
change
mitigation
Page 4 of 12
$230,354,1
25
$0
$0
($9,533,500 ($9,533,500 ($9,533,500 ($9,533,500
)
)
)
)
$0
($179,850,0 ($179,850,0 ($179,850,0 ($179,850,0
00)
00)
00)
00)
$0
$0
$0
($35,256,88 ($35,443,00 ($35,443,00 ($35,094,00 ($35,094,00
4)
0)
0)
0)
0)
($896,196,8 ($102,620,0 ($97,523,00 ($66,026,00 ($64,389,00
84)
00)
0)
0)
0)
Template revised September 22, 2016.
COMMISSION AGENDA - Action Item No. 10a
Meeting Date: September 10, 2024
Natural
Climate
Solutions
Account
Air
Quality
and
Health
Disparitie
s
Improve
ment
Account
Consolida
ted
Climate
Account
General
FundState
General
FundFederal
Climate
resilience
Conservatio
n activity
Monitoring
and
improvemen
t of air
quality
Addressing
disparate
impacts in
overburden
ed
communitie
s
Total
Page 5 of 12
($282,251,1 ($25,392,00 ($27,953,00 ($22,956,00 ($25,853,00
36)
0)
0)
0)
0)
($19,333,61
$0
1)
$0
$0
$0
$653,797,4
43
$0
$0
$0
$0
($6,349,000 ($6,152,000 ($6,364,000 ($7,500,000 ($7,700,000
)
)
)
)
)
($45,000,00 ($70,000,00 ($70,000,00 ($70,000,00 ($236,700,0
0)
0)
0)
0)
00)
($835,829,9 ($430,377,0 ($428,053,5 ($392,346,5 ($590,506,5
54)
00)
00)
00)
00)
Table 2
Carbon Emissions Reduction Account
Agency
Notable FY25 Project impacts
Department of
Commerce
Department of Ecology
Department of
Enterprise Services
Department of Natural
Resources
Template revised September 22, 2016.
Spending
authority
eliminated
Transfers
($5,000,000)
$0
($4,000,000)
$0
($13,500,000)
$0
$0
$671,724
COMMISSION AGENDA - Action Item No. 10a
Meeting Date: September 10, 2024
Joint Transportation
Committee
Washington State
Department of
Transportation
Washington State
Parks & Recreation
Commission
Total
Hybrid-electric ferry
construction and terminal
electrification ($42M)
Zero emission vehicle private
sector incentives, vehicle &
infrastructure grants ($40M)
Public bus and transit facility
projects ($30M)
Transportation planning for the
World Cup ($1M)
Page 6 of 12
($477,000)
$2,243,091
($182,263,000)
$227,439,310
$0
$0
($205,240,000)
$230,354,125
Spending
authority
eliminated
Transfers
($16,973,000)
$1,300,473
$0
$70,250
$0
$506,755
$0
$3,199,000
($269,919,794)
$303,908,217
Table 3
Climate Commitment Account
Agency
Central Washington
University
Columbia River Gorge
Commission
Department of
Architectural and
Historic Preservation
Department of Children,
Youth and Families
Department of
Commerce
Notable FY25 Project impacts
Building Decarbonization
($100M)
Local GHG Reduction Projects
($74M)
Clean energy
manufacturing ($21.5M)
Hard-to-Decarbonize ($13M)
Federal grant assistance
($3.6M)
Federal clean energy tax
incentive assistance ($2.9M)
Template revised September 22, 2016.
COMMISSION AGENDA - Action Item No. 10a
Meeting Date: September 10, 2024
Page 7 of 12
Industrial symbiosis ($2.1M)
Department of
Corrections
Department of Ecology
Indoor
($6M)
Air
Quality
Grants
Department of
Enterprise Services
Department of Health
Department of Labor &
Industries
Department of Natural
Resources
Department of Revenue
Department of Social
and Health Services
Department of Veteran's
Affairs
Energy Facility Site
Evaluation Council
Employment Security
Department
Eastern Washington
University
Governor's Office of
Indian Affairs
Office of Financial
Management
Office of the
K12 Indoor Air Quality Grants
Superintendent of Public
($30M)
Instruction
The Evergreen State
College
University of
Washington
Washington State Board
of Community &
Technical Colleges
Washington State
Conservation
Commission
Washington State
Template revised September 22, 2016.
($600,000)
$1,600,000
($9,792,103)
$17,917,345
($1,617,575)
$0
$120,000
$79,236,333
$0
$3,463,669
($862,000)
$5,423,409
$0
$281,500
($9,958,915)
$0
$0
$200,000
($68,000)
$4,561,612
$0
$329,837
($9,998,000)
$50,000
$0
$495,218
($875,000)
$3,240,284
($30,000,000)
$7,525,000
$0
$0
($39,053,000)
$9,055,869
($2,475,000)
$5,781,000
($3,048,483)
$22,400,000
($3,407,000)
$2,553,592
COMMISSION AGENDA - Action Item No. 10a
Meeting Date: September 10, 2024
Page 8 of 12
Department of
Agriculture
Washington State
Department of Fish &
Wildlife
Washington State Parks
& Recreation
Commission
Washington State
University
Western Washington
University
Workforce Training
Board
Total
Table 4
Natural Climate Solutions Account
Notable FY25 Project
Agency
impacts
Department of Commerce
Department of Ecology
Department of Enterprise
Services
Department of Health
Department of Natural
Resources
Military Department
Restoration & protection
of salmon habitat ($25M)
Recreation and
Fish passage barrier
Conservation Office
removal ($22M)
Estuary & salmon habitat
restoration ($11M)
University of Washington
Washington State
Conservation Commission
Washington State
Department of Agriculture
Washington State
Department of Fish and
Template revised September 22, 2016.
$0
$1,056,113
($950,000)
$1,462,443
($13,000,000)
$352,823
($7,000,000)
$0
$0
$508,273
($419,717,870)
$476,479,014
Spending authority
Transfers
eliminated
($7,975,000)
$2,600,546
($2,079,963)
$21,451,072
$0
$0
$0
$22,828
($54,594,358)
$26,464,652
$0
$84,022
($72,006,000)
$57,279,700
$0
$486,602
($5,603,713)
$24,331,293
($5,000,000)
$114,884
$0
$1,145,241
COMMISSION AGENDA - Action Item No. 10a
Meeting Date: September 10, 2024
Page 9 of 12
Wildlife
Washington State Parks &
Recreation Commission
Total
($75,000)
$936,263
($147,334,034)
$134,917,102
Table 5
CCA spending in 24 Supplemental Transpo Budget
Agency /
Spending
Project
Division
from CCA
Ecology
ZEV school buses
$4,000,000
Shore power and emissions
$477,000
study
JTC
ZEV MHD Study (concluded)
$2,000,000
ZEV State Infrastructure
$15,000,000
Grants
MHD Vehicle Vouchers
$10,000,000
Hydrogen infrastructure
$10,000,000
WSDOT
grants and federal match
Public-Private ZAP EV car share & low$3,400,000
Partnerships
income program
$110,000,000
MHD ZEV vouchers
World Cup Transportation
Planning
WSDOT
Planning
Local decarb in overburdened
communities
Zero emissions buses &
facilities
Additional green
WSDOT Public transportation projects
Transportation Transit to ferry coordination
grants
Implementing frequent transit
service study
Vessel and terminal
electrification
State Ferries
Hybrid-electric vessel
construction
Template revised September 22, 2016.
$1,000,000
$3,000,000
$7,758,000
$7,442,000
$2,000,000
$900,000
$24,265,000
$17,729,000
Comment
Included in 2023 budget, but
fully
'unlocked'
in
supplemental
COMMISSION AGENDA - Action Item No. 10a
Meeting Date: September 10, 2024
Future hybrid-electric vessel
construction
Future vessel and terminal
electrification
Page 10 of 12
$106,881,000
$47,225,000
$28,000,000
$14M provided in the 2023
transportation budget not
at-risk, but additional $14M
included in 2024 would be
impacted.
$6,300,000
Funding already provided to
NWSA not at-risk, but repeal
effort would prevent any
additional investment from
the State to 'plus-up' the
demonstration project.
$25,000,000
Matching grant. If eliminated
could
prevent
federal
awards ($390M+).
NWSA Shorepower Demo
WSDOT Rail
NWSA ZEV Drayage Demo
High-speed rail
Port electrification grants
$26,500,000
Local safety and bike/ped
WSDOT Local
projects: North Aurora Safety,
Programs
North Broadway Ped Bridge
$22,944,000
Current funding not at-risk,
but future grant cycles
prevented by repeal.
Table 6
Operating Budget
Agency
Notable FY25 Project impacts
Commerce
Offshore Wind - Supply Chain Study
Offshore Wind - Blue Wind funding
Industrial symbiosis
Circular economy market development program
Innovation Cluster Accelerator (Green Jobs)
State Green Bank
Federal grant assistance web portal and outreach
Template revised September 22, 2016.
Spending from
CCA
Comment
$250,000
$375,000
$2,110,000
$390,000
$1,000,000
$800,000
$2,500,000
COMMISSION AGENDA - Action Item No. 10a
Meeting Date: September 10, 2024
DSHS
Ecology
DNR
Dept of
Ag.
EFSEC
DOL
SBCTC
Page 11 of 12
Federal tax incentive assistance
Federal grant-writing assistance
Hydrogen - planning, testing, feasibility
Buy Clean Buy Fair' Implementation
Clean Energy Ambassadors
Sustainable maritime fuels study and working
group
Agri-tourism Study
Statewide community EJ and climate resilience
network pilot
CCA implementation
Offshore Wind - Pre-BOEM planning and
engagement
CCA Linkage implementation
Food waste management grants
CCA public education and outreach
Air quality mitigation equipment in South King
CO2 Direct Capture Study
Kelp & Eelgrass survey studies
$5,000,000
$4,500,000
$539,000
$1,112,000
$3,000,000
Organic waste standards implementation
Clean energy siting - pre-application development,
review, hydrogen focus
Farm fuel CCA reimbursements
Green workforce curriculum development
$3,176,000
$250,000
$250,000
$2,000,000
$1,400,000
$338,000
$1,787,000
$1,645,000
$2,000,000
$6,000,000
$300,000
$593,000
$757,000
$30,000,000
$475,000
Table 7
Capital Budget
Agency
Commerce
Notable FY25 Project
impacts
Biogenic CO2 'proof of
concept'
Hard to Decarbonize'
grants
Green Jobs and
Infrastructure grants
Clean Energy
Community Grants
Template revised September 22, 2016.
Spending from
CCA
Comment
$1,500,000
$45,000,000
$25,000,000
$50,000,000
COMMISSION AGENDA - Action Item No. 10a
Meeting Date: September 10, 2024
Page 12 of 12
Majority of resources allocated, but
likely funded at a much smaller scale
in future if 2117 passes
RCO
Dept. of Ag.
OSPI
Community EV
charging grants
Salmon recovery board
grants
Estuary and salmon
restoration program
Conservation Reserve
Enhancement
Program
Fish barrier removal
grants
Clean energy & ag land
use assessment
K12 indoor air quality
grants
Air filtration and HEPA
filters at schools near
SEA
ATTACHMENTS TO THIS REQUEST
1. Tables 1-5
2. Draft Resolution
Template revised September 22, 2016.
$105,000,000
$25,000,000
$11,110,000
$11,000,000
$43,290,000
$100,000
$30,000,000
$500,000