TCI Gas Tax Continues to Stall Despite Democratic Supermajorities

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Posted by Dennis Hull on Sunday, October 31st, 2021, 5:10 PM PERMALINK

New England Democrats are wavering on a new gas tax as fuel prices spike to 7-year highs across America. While environmentalists continue to push for the embattled Transportation and Climate Initiative, Democratic lawmakers in Connecticut, Vermont, and Rhode Island are making little progress on passing a regressive, multi-state carbon tax in the Northeast. 

During a meeting to boost support for TCI last week, a Rhode Island Democrat awkwardly concluded that Republicans are not the holdup in passing the climate agreement – the problem, rather, lies with dissenters in her party. “Rhode Island has a Democratic majority – significant Democratic majority in both chambers. So…” said Sen. Meghan Kallman, trailing off. Her unstated point: Democrats could easily pass the hyper-partisan climate legislation if only they could all agree on its purported merits. 

But, as gas prices continue to climb close to $4 a gallon in Rhode Island, legislators are thinking twice about the wisdom of a new tax on transportation fuel. Their caution is particularly warranted in light of TCI’s regressive impact on the poor. Consumers will bear the vast majority of $3 billion in gas taxes in the form of higher prices under TCI, with low-income drivers paying a disproportionately large share of their income to support the new tax. Vermont Governor Phil Scott has already expressed reservations about the impact of TCI, saying he feels good about the state’s direction “without the need to raise taxes, and certainly not a regressive carbon tax.” 

IN JUNE, the TCI passed the Rhode Island Senate but remains stalled in the House, despite Democratic supermajorities. However, Governor Daniel McKee remains “totally committed” to joining the agreement, according to Michael Healey, a spokesman for the Department of Environmental Management. “[We] continue to engage legislators, environmental and equity advocates, and other stakeholders to discuss the benefits of TCI,” said Healey. “We are very hopeful that both houses of the legislature will take up the issue early in the 2022 session.” In addition, despite the long road to TCI’s ultimate implementation, McKee is “actively in conversations” with Connecticut Gov. Ned Lamont and Massachusetts Gov. Charlie Baker to make the gas tax a reality. 

Thanks to an existing emissions law in Massachusetts, Baker is the only governor with authority to join TCI unilaterally, without support from the legislature. But a petition effort sponsored by the Massachusetts Fiscal Alliance could successfully place the question before voters on next year’s ballot, giving residents the chance to reject the counterproductive new fuel tax. 

In Connecticut, an amended version of TCI will almost certainly come up for another vote when the legislature reconvenes in February. The program likely has enough votes to pass the House, although the legislature declined to discuss it during a special session in September. However, it faces an uphill battle in the Senate, where President Martin Looney continues to criticize the disproportionate impact of a gas tax on the poor. As Democrats continue to deliberate over how to offset the regressive effect of the gas tax, Looney said he is open to passing a framework to implement TCI if it is paired with “progressive tax adjustments.” 

Local communities and activist groups in Connecticut are also weighing in on the program’s merits. For example, the Hartford City Council joined West Hartford in passing a resolution to urge the state legislature to pass TCI. Hartford Mayor Luke Bronin also supports TCI, as does Governor Lamont. Meanwhile, Connecticut-based environmental action group Save the Sound hired more lobbyists in a renewed push to enact the legislation. 

If implemented, TCI would require fuel producers to purchase a dwindling number of allowances for carbon emissions, essentially forcing a 26% reduction in emissions by 2032. Taxpayers would foot a three billion dollar bill for this radical energy wishlist.

Photo Credit: Judgefloro

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