Three sessions centered on the Supreme Court

A recently retired state economist has filed a complaint against the Washington State Department of Transportation, alleging he was ordered not to include Washington’s cap-and-invest costs in an early 2023 revenue forecast.

In his complaint filed Thursday, Scott Smith, 64, said he left WSDOT after more than five years as a gasoline tax revenue and gasoline price forecaster for this reason. He is seeking $750,000 in lost income because he felt pressured to leave the agency before he was ready to retire.

A complaint must be filed 60 days prior to the filing of a lawsuit seeking damages from the state. Smith is represented by Citizen Action Defense Fund, a conservative organization that opposes Washington’s new cap-and-invest carbon pricing program.

The same organization filed a lawsuit against the state in Thurston County Superior Court last January, alleging the Legislature’s 2022 transportation bill, which included the nuts and bolts of the cap-and-invest program, violated the Washington Constitution by covering more than one subject. CADF lost in Superior Court and is appealing the ruling to the Washington Supreme Court.

Smith’s complaint filed this week alleges that when he prepared his gas revenue and price forecasts at the beginning of 2023 for WSDOT’s revenue forecast council, he calculated that Washington’s cap-and-invest program — which went into effect on Jan. 1, 2023 — would have a significant impact on gas prices and gas tax revenue. He says he was told to remove those calculations from his forecast by WSDOT officials and the Washington Office of Financial Management.

“He was approached by a supervisor and told not to include what the impacts of cap-and-trade will be. … They were asking him to lie, and he wouldn’t do that,” said Jackson Maynard, Citizen Action Defense Fund’s executive director, in an interview.

Maynard and the complaint said Smith was told he would need OFM approval on future calculations, he was denied a promotion, and was denied leave to see a sick family member, which he alleges was retaliation. 

The state’s cap-and-invest programs became controversial in June when Washington posted the highest gas prices in the nation. Republicans have seized this as a major political issue, with Democrats defending the program.

A Crosscut analysis showed economists calculating that the cap-and-invest program has increased gasoline prices from 26 to 50 cents per gallon, depending on who is doing the number-crunching. The same analysis showed numerous factors beyond the cap-and-invest program are contributing to Washington’s high gas prices.

Gov. Jay Inslee’s office first became aware of Smith’s situation on Thursday, said governor’s spokesman Mike Faulk. The governor’s office receives its gasoline price and revenue information from the state Ecology Department and not from WSDOT, Faulk said.

Ecology Department spokesman Andrew Wineke said in an email that the Legislature directed Ecology to develop and implement the cap-and-invest program – not the Department of Transportation. "Ecology used its own economists to conduct the regulatory analysis for the cap-and-invest program, with support from a respected independent economics firm. No one from the Department of Transportation provided input on that analysis,” Wineke said.

OFM spokesman Hayden Mackley added that the transportation revenue forecasts are important in developing the state's budget. "It’s important that this complex work is completed by professional forecasters. We rely on staff in other agencies who have this expertise to fill this role,” Mackley said.

Kris Abrudan, spokeswoman for WSDOT, said: “Transportation revenue forecasts are complex and highly variable. … Data integrity, transparency, and consistency are integral to this process and any changes to that model to include incorporating (the cap-and-invest program)  would be a much broader determination than any one employee or agency.”

Meanwhile on Friday evening, Faulk sent out an email that said:

• The appropriate OFM official does not recall discussing this matter with Smith, and does not recall declaring that Smith’s work needed to be reviewed by OFM.
• The Legislature eliminated Smith’s position last session, with his functions transferred to the state’s Economic Revenue Forecast Council. Therefore, his position was not eliminated by WSDOT.
• WSDOT was considering Smith’s request to be able to work remotely, but he did not finish the process for that decision-making.
• Smith’s request for time with his mother around Thanksgiving conflicted with a presentation that he was scheduled to give.

Updated Dec. 3, 2023: This story has been updated to include comment from the Washington State Department of Transportation, and information emailed Friday evening by governor's spokesperson Mike Faulk. 

The U.S. Interior Department announced this week $11 million in grants for conservation projects in Washington state.

The federal grants are part of the “America the Beautiful Challenge” to restore land and water across the nation. The 74 grants announced Tuesday total $140 million and will pay for conservation projects in 46 states, three U.S. territories and 21 tribal nations.

In Washington the grants will fund: 

– Salmon habitat restoration projects run by the Yakama Nation and Confederated Tribes of the Umatilla Indian Reservation: $2.99 million and $2.5 million.

– A multistate effort led by the Nez Perce Tribe to plan for California condor habitat management and restoration: $1.99 million.

– A collaborative effort involving 31 tribal nations to mitigate ecological damage from recreation on Washington public lands: $1 million.

– Cross-border salmon restoration efforts by the Coeur d’Alene Nation: $614,300. 

– An effort by Conservation Northwest to improve native vegetation for tribal harvest and improve salmon habitat in the Mt. Baker-Snoqualmie National Forest: $810,000. 

– Reduce flood risk in the Olympic National Forest: $870,700.

The Biden Administration launched the America the Beautiful Challenge in 2021, with the goal of conserving 30 percent of U.S. lands and water by 2030.

A synagogue on Mercer Island was discovered vandalized Wednesday morning – at least the third incident in a week targeting Jewish organizations in this city. 

The FBI is investigating because of an increase of “targeted incidents” nationally, according to a Mercer Island Police Department spokesperson. The FBI has reported a rise in hate crimes and threats against Jews and Muslims since the start of the Israel-Hamas war in Gaza. Seattle-area Jewish and Muslim groups told Crosscut that they feared the war would lead to an increase in anti-Semitism and Islamophobia.

Members of the Herzl-Ner Tamid Conservative Congregation on Wednesday morning found graffiti on the exterior of the synagogue, including the words, “Shame on Israel,” “You know better” and “Stop Killing.” 

The vandalism followed a few days after two Jewish organizations on Mercer Island received suspicious packages in the mail. The Mercer Island Police Department did not identify the organizations in its press release. The Seattle Times also reported that at least five other Jewish organizations in Seattle have received suspicious packages in recent days.

The recent targeting of Jewish organizations – and the lack of loud condemnation – disheartens Rabbi Will Berkovitz, CEO of Jewish Family Service of Seattle.

“People say, ‘We’re just critiquing the Israeli government.’ Well, if you are vandalizing a place of worship, a Jewish space, that’s not a critique of the Israeli government, that’s hatred of Jews,” he said.

Berkovitz said while he and other Jews have stood in solidarity with groups outside their community, they haven’t seen the same open support in recent days.

“At our time of need, we are not being supported,” Berkovitz said. “We are standing – we feel like – alone.” 

The Wednesday morning vandalism comes as Israel and Hamas tentatively agreed the night before to a temporary four-day ceasefire to facilitate the release of women and child hostages taken by Hamas during the Oct. 7 attack on Israel. The agreement includes Israel’s release of Palestinian prisoners, according to The Associated Press and CNN. The details of the agreement are still being worked out, according to the New York Times.

Opponents of Washington’s fledgling carbon pricing system on Tuesday turned in 418,399 signatures to the Secretary of State’s Office on a petition to repeal the program.

The petition needs at least 324,516 valid signatures by Dec. 29 to go to the Legislature. If the Legislature takes no action, it will appear on the November 2024 ballot as a referendum.

“We’re going to give the voters a chance to vote it down,” said Brian Heywood, leader of the effort, at a press conference in Kent in front of a trailer filled with signature pages. Heywood, a hedge fund manager, is providing more than 80% of the petition drive’s budget, according to Let’s Go Washington’s Web site. 

Since January, Washington’s cap-and-invest program has held pollution allowance auctions aimed at reducing Washington emissions. Opponents blame the cap-and-invest program for Washington’s high gasoline prices, saying oil companies are passing on their auction costs at the pump. 

A recent Crosscut analysis showed that numerous factors beyond the cap-and-invest system are affecting Washington’s gasoline prices.

The petition “will be dead on arrival,“ said Sen. Joe Nguyen, D-White Center and chairman of the Senate’s Energy & Environment Committee, last week. The initiative would have to go through his committee.

Heywood said public ballot measures for a cap-and-trade program were defeated before the Legislature passed the cap-and invest program in 2021. “The Legislature said ‘F U’ to the voters and it is saying ‘F U’ again,” Heywood said in response to hostility from the Democrat-controlled Legislature toward the petition.

Nguyen said the petitioners are unaware of the cap-and-invest program’s benefits and that the 2021 law is the result of compromises reached among environmentalists, advocates of disadvantaged communities and the business community, including some of the oil industry. He also contended the petition’s backers are climate-change deniers.

“Of course, climate change exists. Of course, humans cause climate change. I’m just not a member of the mother-breathing Church of Gaia,” Heywood said. He later added: “This money is going to the political friends and allies of the governor. To be honest, this is a money grab.” 

In an email, Gov. Jay Inslee’s spokesman Mike Faulk said: “As for the false claim about how auction revenue is spent, if he can’t back it up then it’s not even worth printing. We’ve been more than happy to share with folks where the funds are going.”

The cap-and-invest program is on track to raise almost $2 billion in 2023. So far, $300 million has been appropriated to 188 projects.  

Washington is projected to collect $770 million more in taxes over the next four years than previously expected, according to a new state revenue forecast.

Tax collections are now expected to bring in an additional $191 million for the current two-year budget cycle, according to the state Economic Revenue Forecast Council. Another $579 million in higher-than-expected collections are projected for the 2025-27 budget cycle.

While some tax collections came in lower than expected – including the real estate excise tax – the projected increases are due in part to sustained consumer spending and employment, according to the Council forecast.

“Revenue collections remain steady, but we have seen personal income forecasts improving later in the forecast period as well as stronger total employment and construction employment forecasts,” Steve Lerch, executive director of the nonpartisan Council, said in a statement. “These changes have resulted in slight modifications for the November forecast.”

In the 60-day legislative session that begins in January, state lawmakers will write supplemental budgets that tweak the main two-year budgets they passed last year. Gov. Jay Inslee is expected to unveil his proposed supplemental budgets next month.

Washington’s new capital gains tax has brought in nearly $900 million in its first year, according to the state Department of Revenue.

The DOR estimates $889 million was collected out of a total of 3,765 returns, according to an agency spokesperson. That number could fluctuate a little before lawmakers return in January for the annual legislative session, according to spokesperson Mikhail Carpenter.

Legislators in the coming session will write supplemental budgets that make adjustments to the state’s two-year spending blueprints.

The first $500 million of the tax is directed toward a state fund that pays for K-12 education and child-care programs. The additional dollars are then expected to go into a state account that pays for school construction.

In March, the Washington Supreme Court upheld the law, which puts a 7% tax on profits from the sale of stocks and bonds exceeding $250,000. Exempt from the tax are sales of real estate, retirement accounts and livestock and timber for ranching or farming. There’s also a special deduction for sales of family-owned businesses. Foes of the tax in August asked the U.S. Supreme Court to weigh in.

The U.S. and Washington environmental agencies are not adequately tracking how high water temperatures and oxygen-depleting substances are harming Puget Sound’s salmon, according to a recent Government Accountability Office report.

Three salmon species — Puget Sound Chinook, Hood Canal summer-run chum, and Puget Sound steelhead — are listed as threatened under the federal Endangered Species Act. The National Oceanic and Atmospheric Administration reported in 2022 that all three species are at moderate risk of extinction.

Salmon require cool, clean and well-oxygenated water to survive. Warmer-than-optimal temperatures can stress and kill salmon while delaying their migration. 

“The Lummi Nation reported that elevated water temperatures in the Nooksack River in 2021 contributed to the spread of pathogens that killed an estimated 2,500 Chinook salmon before the salmon could spawn,” the report said.

Nutrients from nitrogen from sewage treatment plants and general water runoff have depleted oxygen in Puget Sound. “Low levels of dissolved oxygen can alter embryo incubation periods, decrease the size of fry, increase the likelihood of predation, decrease feeding activity, and negatively affect swimming performance during migration,” the report said.

The GAO faulted the U.S. Environmental Protection Agency and the Washington Department of Ecology for not keeping up with their biennial reports on water quality related to salmon. Only two such reports have been submitted since 2012. 

These reports are supposed to track where the state’s water quality standards are met, where water quality standards are borderline, where there is insufficient data to track the standards, and where water quality standards are not met. Roughly half of the 10,000 records examined by the GAO found insufficient data to judge the water quality at specific locations.

In its response to the GAO report, the EPA agreed with the GAO’s conclusions, and said it was working with the state Ecology Department to improve the timeliness of the water quality reports.

The Ecology Department said the GAO did not consider the scale and complexity of collecting and analyzing data from thousands of locations across Washington.

Starbucks baristas in Prosser recommitted to unionization last week after the company challenged a September vote in which three-fourths of workers voted to join the national Starbucks Workers United union. 

In Thursday’s vote, baristas voted 12 to 8 to unionize at the city’s only Starbucks. The Prosser cafe had become just the third Starbucks in Eastern Washington to unionize in the nearly two years since local shops started organizing. 

Both parties agreed to set aside the previous results, according to National Labor Relations Board documents, after Starbucks filed an objection “alleging certain conduct by the Petitioner interfered with the employees’ exercise of a free and reasoned choice.” 

“The union engaged in misconduct immediately outside of the election location that essentially nullified [a] fair election environment,” wrote Rachel Wall, a director of communications for Starbucks.

Tony Warwick, 22, who helped lead the unionization effort at the lone Starbucks in Prosser, said the challenge was in response to baristas gathering on the store’s patio during the first vote. 

“Even with these weak claims and our 3-to-1 majority, we decided on a re-election to avoid the long legal process,” Warwick said. 

The Prosser Starbucks is the 27th location in the company’s home state to vote to join the union. 

The Starbucks Workers United union plans to hold a one-day strike this Thursday as the company rolls out Red Cup Day, an annual holiday promotion. Last year, thousands of workers walked out the day the company handed out the limited-edition holiday reusable cups.

A group of conservative Latino voters is asking the U.S. Supreme Court to get involved with lawsuits over Washington’s 2021 political redistricting process.

They want the justices to change the outcome of two U.S. District Court cases related to the 15th Legislative District, a Latino voter-majority district in Central Washington. 

In an August ruling, U.S. District Court Judge Robert Lasnik sided with Latino voters who filed suit in January 2022 over the new boundaries of 15th District, saying it violated the federal Voting Rights Act. The plaintiffs of the case, Palmer vs. Hobbs, contend that while the district met the required percentage of voters to be a majority-Latino district, the bipartisan Washington State Redistricting Commission drew the district in a way that diluted their voting power. Lasnik set a January deadline for a new map to be drawn. 

Latino Republicans, who intervened in the Palmer case, believed the ruling was flawed and accused the federal district court of entertaining a “partisan charade.” The group also wants the U.S. Supreme Court to address a separate request to resurrect a related case, Garcia vs. Hobbs, deemed moot by Lasnik in his ruling on Palmer. 

The group, which includes State Rep. Alex Ybarra, R-Quincy, filed an appeal to the U.S. Courts of Appeals Ninth Circuit but is asking the U.S. Supreme Court to review Palmer v. Hobbs before judgment there. Reviewing a case directly from a lower court has been historically rare, but the U.S. Supreme Court has granted more of these petitions in recent years.  

The core argument is that the 15th District already has a majority-Latino voter population and elected a Latina — Republican Nikki Torres — to the state Senate in 2022, the only election held thus far under the current map. They say Palmer v. Hobbs aims to get Democrats elected in a conservative region.

“This litigation is a partisan’s playbook on how to use race as a proxy for political preference to persuade a court to redraw a district’s boundaries to favor one political party,” attorneys said in a filing with the U.S. Supreme Court. 

Washington Public Lands Commissioner Hilary Franz is switching from running for governor to running for U.S. Congress in the wake of Rep. Derek Kilmer’s announced retirement.

The moderate Democrat, first elected representative in 2012 from Washington’s 6th Congressional District, announced Thursday that he wouldn’t run for another term.

In a statement Friday through Franz’s campaign, Kilmer offered his endorsement.

“As lands and wildfire chief, Hilary Franz has proven herself to be a bold, strategic leader with a track record of bringing people together from across the state and from different backgrounds to find solutions to our shared problems,” Kilmer said in prepared remarks. Twice elected statewide as state commissioner of public lands, Franz has been running for governor in a crowded field that includes Democratic state Attorney General Bob Ferguson and Dave Reichert, Republican and former member of Congress.

In her campaign statement, Franz touted her time serving in the district between 2008 and 2011 as a member of the Bainbridge Island City Council.

“Over the last few months, I’ve talked to voters in every corner of Washington and heard the same concerns – rising prices for necessities like housing pushing families out of the middle class, protecting reproductive freedom and women’s rights, safeguarding our democracy, supporting our veterans and military families, and the climate crisis bearing down on us,” said Hilary Franz. 

The statement also announced a slew of other endorsements for Franz, including from Tacoma Mayor Victoria Woodards; Kitsap County Commissioner Christine Rolfes, also a former state senator; and state Rep. Mike Chapman, D-Port Angeles.

Washington’s 6th Congressional District includes the Olympic Peninsula and stretches over Puget Sound to include parts of Tacoma.

Though she has been previously registered to vote in Seattle, Franz bought a home in the congressional district – in Grays Harbor County – in 2022, according to Franz spokesperson Jack Sorensen.

“Has had a home and spent much of her time there for a while,” Sorensen wrote in an email. “That’s her voting address, and she voted there in this election.”

“The house in Seattle you’re referring to has actually been rented out for a while,” he added.

In the hours after Kilmer announced, two state lawmakers have also said they were considering bids: Democratic Sen. Emily Randall of Bremerton and GOP Sen. Drew MacEwen of Union.