The Projected Impact of Initiatives 2117 and 2109 on the University of Washington and Higher Education (Full Overview)
Initiatives 2117 and 2109, which could repeal the Climate Commitment Act and the capital gains tax respectively, could negatively impact funding for the University of Washington (UW) and other public education institutions in the state of Washington. Please read below for a detailed description of the potential consequences of each repeal.
Initiative 2117: Repealing the Carbon Emissions Tax
The Washington State Office of Financial Management (OFM) projects a $3.9 billion revenue reduction over the next five years if Initiative 2117 repeals the carbon emissions tax.
Financial Ramifications for the UW
Repealing this tax would deal a financial blow to UW, complicating essential upgrades to its aging energy infrastructure. Example: The University’s central power plant, which is over a century old and accounts for more than 93% of the Seattle campus’s carbon emissions, is in dire need of replacement. The FY25 Board of Regents budget includes a clean energy transformation requiring several hundred million dollars from the state’s Climate Commitment Account (CCA). Total needs over the next decade are projected to approach $1 billion.
Why Does This Matter?
The University’s outdated energy systems not only strain maintenance resources but also risk service disruptions, as seen during the pandemic when heating systems at UW’s medical centers failed. The Seattle campus’s single electricity source also limits capacity, with high heating and cooling demands risking shutdowns. This summer, the Tacoma campus, which also has a single electricity source, suffered a prolonged shutdown due to an electrical failure.
Additionally, with $9 million spent annually on fossil fuels, UW faces penalties under Seattle’s new carbon emissions legislation if it doesn’t modernize by 2027. Should the CCA be repealed, UW would lose its most viable revenue source for essential infrastructure replacements.
Other Risks
If the CCA is repealed in November, allocations from CCA accounts to the UW already slated for FY25 could be pulled back. These allocations include funding for:
- UW Seattle Centralized Chilled Water Capacity Improvements
- UW Bothell Central Plant Optimization & Gas Boiler Replacements
- UW Tacoma Gas Boiler Replacements
- UW Medical Center Montlake HVAC Systems Renewal
- UW Medical Center Northwest Central Utility Planning
- 2 tribal grant writers for the EPA’s Thriving Communities grantmaking program
Initiative 2109: Repealing the Capital Gains Tax
Initiative 2109 proposes the repeal of the capital gains tax, which could result in an estimated $2.2 billion loss in state revenue over five years (source: Washington State Office of Financial Management). This revenue is slated to fund K-12 education, higher education, and early learning initiatives.
Impact on Education Funding
The capital gains tax directly supports the state’s Education Legacy Trust, which has provided UW with $40 million to enhance Computer Science degrees and expand Family Medicine residencies. Since its introduction, the tax has generated over $1 billion specifically for educational purposes.
Consequences of Removal
Without this funding, early learning and higher education might face intense competition for discretionary state funds, leading to potential cuts in vital programs. Historically, when state revenues decline, higher education often bears the brunt of budget reductions due to the state mandate to adequately fund K-12. With the Legislature capping tuition, universities have few options for additional revenue generation – and would not wish to place this burden on students anyhow.
Who Is Currently Affected by the Capital Gains Tax?
The Capital Gains Tax applies only to capital gains over $250,000, excluding real estate and retirement funds, thus impacting a small fraction of Washingtonians—primarily those with an average household income exceeding $2 million.
Conclusion
Both initiatives carry significant implications for the University of Washington and the broader educational framework in Washington State. The potential repeal of these taxes could hinder crucial upgrades to aging infrastructure at UW and destabilize funding for essential educational programs. As voters prepare for the upcoming election, the lesser known yet substantial implications for the UW and public education should be carefully considered.