The 2024 Washington State Legislative session adjourned in March, with legislators and Governor Jay Inslee approving another $4.3 billion for the 2024–2025 fiscal year. Of that, $1.3 billion comes from additional Climate Commitment Act (CCA) revenue generated through cap-and-trade auctions. Front and Centered previously published an analysis of the allocation of CCA funds in the 2023-2025 biennium budget, concluding that 23.2% of CCA funds can be expected to benefit Vulnerable Populations within Overburdened Communities, well short of the 35% requirement and 40% goal established in the CCA.
Using updated methodology that better distinguishes the intent behind budget provisos, we found that only 14.6% of the additional CCA revenue is directed to Vulnerable Populations within Overburdened Communities. The responsibility now falls on state agencies to rectify the legislature’s shortcomings and prioritize the allocation of benefits to Overburdened Communities. Below, we revisit the HEAL and CCA obligations around budget and funding decisions, our methodology and analysis of the 2024 Supplemental Budget, and end with a discussion of recommendations for meeting the legislative mandate.
Front and Centered’s Position on I-2117
We oppose I-2117. The campaign to repeal the Climate Commitment Act (CCA) and other recently enacted laws to invest in Washington State is a reckless and bad faith effort by a wealthy individual and his politics of despair and division. The Front and Centered coalition and our members have a record of leadership in fighting for healthy communities and the type of investments that are reflected in these laws, including co-creating and co-leading the campaign for I-1631, the Protect Washington Act. We also have a record of leadership in opposing false promises, including I-732, and the use of carbon trading markets as a climate strategy—a feature of the CCA that we have, and will continue, to challenge. Read our coalition leadership’s full statement on I-2117.
The CCA and the HEAL Act
Years of hard work and community organizing by frontline communities across Washington State culminated in the passage of the Healthy Environmental for All (HEAL) Act, the state’s landmark environmental justice policy. The HEAL Act was passed to eliminate and prevent the disproportionate impacts of climate change and our extractive economy on communities of color, people with low incomes, and affected workers.
Figure 1: Pie chart showing breakdown of CCA investments as required by CCA
One key element of HEAL is the implementation of environmental justice in budgeting and funding decisions. HEAL established a goal of directing 40% of environmental benefits created by significant agency actions to Vulnerable Populations and Overburdened Communities. As such, covered agencies must develop a process to ensure that all budget, expenditure, and grant decisions are informed by environmental justice principles.
In the same year as the passage of HEAL, legislators also enacted the Climate Commitment Act (CCA) and established a statewide cap-and-trade program. The CCA requires a minimum of 35%, and a goal of 40%, of all revenue to be used for investments providing direct and meaningful benefits to Vulnerable Populations within Overburdened Communities (Figure 1).* An additional 10% of funds must be used for “programs, activities, or projects formally supported by a resolution by an Indian tribe” and can be double-counted towards meeting the 35% requirement, so long as the project serves to provide direct and meaningful benefits to Vulnerable Populations within Overburdened Communities. To date, $3.4 billion of CCA revenue has been generated, meaning at least $1.2 billion should be allocated for the benefit of Vulnerable Populations within Overburdened Communities.
While the CCA and HEAL Act use similar language around budget and funding obligations, there are fundamental differences between the two. Most notably, CCA funds must provide “direct and meaningful benefits” to Vulnerable Populations within Overburdened Communities, whereas HEAL-covered funds must provide “environmental benefits” to Vulnerable Populations and Overburdened Communities. Additionally, CCA requires a 35%, with a goal of 40%, allocation of CCA funds to Overburdened Communities; HEAL simply establishes a goal of 40% allocation of relevant funds to Overburdened Communities and is not legally binding.
The definitions of “direct and meaningful benefits” and “environmental benefits,” as well as Vulnerable Populations and Overburdened Communities, are defined by state agencies. While the legislature can provide directives to agencies to allocate funds to Overburdened Communities, it is ultimately the responsibility of agencies to fulfill such obligations. Because agencies have yet to define these terms, the legislature opted to not distinguish between the two terms for this biennium. It is important to bear in mind that our analysis of the budget assesses only the legislature’s efforts towards meeting the 40% goal set forth by CCA and HEAL. Our tracking and assessment of agency progress towards such goals are ongoing and outside the scope of this analysis.
Our Analysis
As with last year’s analysis, we conducted a literal reading of the budget. Any budget proviso using the terms “Vulnerable Populations,” “Overburdened Communities,” and/or “environmental justice” was considered in our analysis and classified as a CCA or non-CCA item. All of the funds are assigned to one of five categories:
- Explicit: proviso explicitly directs all or a certain percentage of funds to Vulnerable Populations, Overburdened Communities, and Tribes
- Prioritized: proviso requires prioritization of or establishes a goal of allocating a certain percentage of funds to Vulnerable Populations, Overburdened Communities, and Tribes
- Tribal: funds are explicitly marked for Tribes, tribal governments, and/or tribal communities
- Honorable Mentions: funds for staffing and other administrative efforts to support state prioritization of environmental justice and Vulnerable Populations, Overburdened Communities, and Tribes
- Mentions: proviso uses environmental justice and Vulnerable Populations and Overburdened Communities language but does not advance environmental justice, specifically prioritize Overburdened Communities, nor create environmental or community health benefits, and therefore are not counted towards the 35% requirement
The total amount going to Overburdened Communities is determined based on allocations made in budget provisos. To determine the allocation of funds that prioritize Overburdened Communities without specifying a certain allocation amount, we took 35% of total funds available. In other words, we can reasonably estimate that 35% of the funds, the legal minimum, will be directed to benefit Vulnerable Populations within Overburdened Communities. Our analysis also includes changes made to the existing biennium budget and reflects the net total. For example, the legislature repealed Reducing Emissions in Hard-to-Decarbonize Sectors, which explicitly allocated $8 million to Overburdened Communities, and approved Hard-to-Decarbonize Sector and Economic Development Grants, which prioritizes benefits to Overburdened Communities. This resulted in a deduction of $8 million from the “Explicit” category and an addition of $9 million to the “Prioritized” category.
Our final calculations show that about $186 million, or 14.6%, of new CCA revenue is expected to benefit Vulnerable Populations within Overburdened Communities (Figure 2). A net total of $1.15 million (0.09%) of all CCA revenue is explicitly directed to Overburdened Communities, $126 million (9.94%) is prioritized to benefit Overburdened Communities, and another $53 million (4.16%) is explicitly directed to Tribes. The legislature also allocated $4.6 million (0.36%) to program development. While the “Mentions” category is not counted towards the 35%, it still allows us to capture a significant amount of funds that referenced the HEAL Act or its provisions. Budget provisos estimating $97.5 million (7.65%) include environmental justice language but do not provide targeted benefits to Overburdened Communities. An additional $13.5 million in non-CCA revenue is also expected to benefit Overburdened Communities.
Significant disparities in Overburdened Communities allocations exist across the different budgets. While the Operating budget meets the 35% requirement, the Capital and Transportation budgets fall well short, allocating only 9.5% and 8.6% of CCA funds to Overburdened Communities, respectively (Figure 3).
The Office of Financial Management (OFM) recently released their analysis of CCA allocations in the 2024 Supplemental Budget and concluded that $444 million (39.6%) will be directed to Overburdened Communities, with $97.3 million (8.7%) going directly to Tribes. OFM based their analysis on specifications made in budget provisos and communications with relevant agencies that we were not privy to. While we are hopeful that the state not only meets but exceeds the 40% goal, these assumed estimates are not legally bound. As such, we cannot hold the agencies accountable to the OFM’s estimates, highlighting the need for explicit allocation language in state budgets.
Legislature Demonstrates Strides Forward, Shortcomings
In our analysis of the 2023–2025 budget, we strongly urged the legislature to provide clear and specific direction to agencies to help ensure Overburdened Communities receive the intended benefits from CCA investments as promised. After reevaluating the biennium budget using our updated methodology, we can conclude that its percentage of Overburdened Communities funds (15.9%, or $198.9 million) is on par with the supplemental budget (Figure 4).
While funds from the “Explicit” category decreased, there was a significant increase in prioritized funds. We noted the use of goal setting in budget provisos, which allowed legislators to establish intent and goals of directing a portion of funds to Overburdened Communities without legally binding agencies to meet those goals. Though we continue to advocate for the inclusion of clear and specific language, we recognize that efforts were made to increase prioritization of Overburdened Communities.
We saw some wins for frontline communities and leaders of the environmental justice movement, even in a supplemental year with the threat of a CCA repeal looming. A Community Assemblies pilot program spearheaded by Front and Centered and the Just Futures project partners was finally approved by the legislature after failing to secure funding in 2023. With assistance from the Department of Social and Health Services, we hope this project will amplify community voices to pave the path to climate resiliency. Other significant investments were made to support clean energy investments, reflecting federal and state priorities and approaches to advancing climate and environmental justice. Hundreds of millions of dollars have been allocated to fund projects and programs like the Clean Energy Community grants, One-Time Electricity Bill Rebates, the Washington Clean Energy Ambassadors program, and Zero-Emission Student Transportation projects.
Our Recommendations for Climate and Environmental Justice
State agencies now carry the responsibility of fulfilling their legislative obligations to meet the 40% goal set by HEAL and the CCA. Based on our analysis, only 14.6% of additional CCA funds will go to Overburdened Communities, meaning agencies will have to direct an additional $260.8 million of the supplemental budget to fulfill the minimum 35% requirement. To do so, agencies must center frontline communities in their programmatic planning, budgeting procedures, and policy development by:
- funding community budgeting and assembly programs to support frontline communities to identify their priorities and develop programs that advance said priorities;
- creating programs that specifically address needs of Vulnerable Populations and Overburdened Communities;
- funding capacity-building programs that help prepare communities and organizations to receive and expend large amounts of money;
- embedding environmental justice requirements in the application and selection processes for competitive funding programs;
- coordinating outreach efforts in Overburdened Communities with other agencies to promote available programs and services; and
- moving away from reimbursement based grant models to make funding opportunities more accessible.
Incorporating the above recommendations will significantly improve the flow and types of funds going to Overburdened Communities. Our foremost priority is ensuring that these expenditures are creating the intended positive impacts for Vulnerable Populations and Overburdened Communities. Funds being spent within the geographic boundaries of Overburdened Communities should not automatically be counted towards the 35% requirement. Instead, funds should only be counted if they (1) address expressed needs and desires and (2) improve the overall health and wellbeing of Vulnerable Populations within Overburdened Communities. The Office of Financial Management and the Department of Ecology are expected to publish online dashboards in September to track these funds. This dashboard should allow us to see more clearly where the funds are going and how well agencies are prioritizing Overburdened Communities. Eventually, we should ideally be able to determine if CCA funds are actually successful in reducing environmental health disparities.
The 2023-2025 biennium was the state’s first attempt at allocating CCA funds under the parameters set by the CCA and HEAL. Moving forward, we urge the Legislature to audit themselves and demonstrate to frontline communities that legislators are doing their due diligence to comply with the law. The CCA has brought an unprecedented amount of money to the state and it is crucial to maintain oversight of both the Legislature and state agencies to ensure prioritization of environmental justice.
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* Per RCW 70A.65.030(1), agencies are responsible for ensuring that a minimum of 35% of funding allocated from CCA funds is directed to provide direct and meaningful benefits to overburdened communities. RCW 70A.65.230 sets forward an intent for the legislature to ensure that 35% of CCA funds are allocated to provide direct and meaningful benefits to overburdened communities.
