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NH Gov. Rejects Climate Gas Tax, Other States Urged To Do The Same

by Patrick Gleason
December 26, 2019, 10:27 AM
in News and Opinion
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cartoon gas tax tciThis past week, details were released about the Transportation Climate Initiative (TCI), the proposal to increase the price of gas across nearly a dozen northeastern and mid-Atlantic states with a new regulatory scheme that will now be debated in statehouses across TCI member states over the coming weeks and months.

TCI supporters didn’t have long to celebrate. As the ink was barely dry on the January 17 press release and memorandum of understanding announcing the TCI details, New Hampshire Governor Chris Sununu (R) announced that his state will not be participating in the fuel cost-increasing regulatory scheme that is TCI.

“I will not force Granite Staters to pay more for their gas just to subsidize other states’ crumbling infrastructure,” Governor Sununu told the Boston Herald.

“New Hampshire is already taking substantial steps to curb our carbon emissions, and this initiative, if enacted, would institute a new gas tax by up to 17 cents per gallon while only achieving minimal results. This program is a financial boondoggle and the people of New Hampshire will never support it.”

Governor Sununu’s office also pointed out how TCI would inflict financial strain on some constituents more than others, explaining that “rural communities would be left at a severe disadvantage if New Hampshire participated in the TCI, as drivers will bear the brunt of the artificially higher gas prices.”

According to Sununu spokesman Jared Chicoine, the Transportation Climate Initiative “is a huge hit to the wallets of rural drivers.

The data makes it clear that — even without the TCI proposal — the market is already projected to reach many of the same environmental benchmarks.”

Massachusetts Governor Charlie Baker (R) says he can impose TCI in his state unilaterally, without the consent of commonwealth representatives and senators. In most other TCI states, however, legislative sign-off will be necessary for ratification.

An important question to be answered is whether other state leaders will follow Governor Sununu’s lead and announce that they will protect their constituents from an effective gas tax hike by not subjecting their state to TCI.

In Vermont, Governor Phil Scott (R) deserves a great deal of credit for being the only thing standing between his constituents and a regressive carbon tax hike. Many are now wondering what Scott will do on TCI, a proposal which, like a carbon tax, would drive up the cost of fuel.

Governor Scott’s spokeswoman recently said their administration is “reviewing and analyzing the draft (memorandum of understanding) in full, so it’s too early to weigh in at this point.”

TCI would have the exact same effect on Vermonters as a gas or carbon tax hike. TCI supporters themselves admit that the plan will inflate the cost of gas by as much as 17 cents per gallon.

By this logic, many are hoping that Governor Scott will ultimately protect his constituents from energy cost-inflating TCI, as he has done with carbon tax proposals for so many years.

“TCI is a carbon tax. Governor Scott has been vociferously opposed to any carbon tax, statewide or regional, since his initial campaign for governor in 2016,” said Rob Roper, president of the Ethan Allen Institute, a Vermont-based think tank.

“In fact, in that campaign when his opponent described her support for a regional, ‘cap and trade’ program designed to expand the Regional Greenhouse Gas Initiative to the transportation sector, which is what TCI is, Scott said, ‘Sounds like she supports a carbon tax!’ So, if Scott is consistent with his campaign promises and his recent policy statements, he should not be long in following New Hampshire out of this bad bargain.”

If Vermont were to go along with TCI while New Hampshire doesn’t, it would put Vermont businesses near the border at a disadvantage relative to their New Hampshire-based competitors.

Massachusetts’ businesses near the border are already preparing to face this disadvantage that their governor has created for them.

“With much higher fuel costs Massachusetts small businesses on the New Hampshire border now risk losing customers to a lower-cost state, as well as the sale of soda, cigarettes, and snacks,” Christopher Carlozzi, Massachusetts director of the National Federation of Independent Business, told the Boston Herald.

“Consumers will already travel over the border to save a few cents a gallon, but if it’s 17 cents they certainly will drive to New Hampshire for cheaper gas, which hurts Massachusetts state revenues.”

On Tuesday, December 17, the day TCI was rolled out, a coalition of non-profit organizations from across 13 northeast and mid-Atlantic states, plus the District of Columbia, sent a joint open letter to public officials urging opposition to TCI:

“Gas taxes are regressive in nature. The TCI will hurt lower-income and rural residents much more significantly than their higher-income, urban peers,” the open letter explained.

“Since motor fuels are economically ‘inelastic,’ the higher costs imposed by the TCI’s fuel tax will have to come out of other areas of household budgets. People already struggling to make ends meet will be forced by their own governments to make painfully difficult choices. Economically speaking, this is bad policy. Morally speaking, it’s just cruel.”

That coalition letter also noted that TCI would raise fuel costs for motorists and direct that additional revenue away from roads.

The letter notes that “unlike motor fuel taxes levied to pay for roads, bridges, and transportation infrastructure (a reasonable fee for use), the TCI would be the equivalent of a ‘sin tax’ – a penalty for engaging in bad behavior.”

Organized labor is already expressing concern about the Transportation Climate Initiative, which provides another example of the frequent conflict between the policy goals of green advocacy groups and the livelihoods of union workers who are employed in the fossil fuel industry.

In response to the Transportation Climate Initiative rollout, Vermont AFL-CIO issued a statement on December 29 proclaiming that the union “supports a true, union-based, Green New Deal for Vermont (and beyond). But central to our vision for a socially just, renewable energy future (built & maintained with union labor) is that such a bold social project needs to be funded through progressive taxation and other creative means which do not regressively put more burdens on low income & working-class people.”

In addition to the adverse economic consequences associated with the effective tax hike imposed by TCI, critics of the proposal contend that the project will have a negligible impact on emissions.

TCI supporters themselves admit that transportation-derived carbon emissions are projected to drop by 19% in the decade from 2022-2032 even if TCI is not implemented.

If TCI is implemented, supporters project that reduction in emissions would increase from 19% to at least 20%, and possibly as much as 25%.

Put another way, TCI supporters project that enactment of the cap and trade-like regulatory scheme will speed up the already projected emissions reduction over the next decade by one to five percentage points.

“To produce a mere 1% point reduction in emissions over 10 years, they would impose a $14 billion tax on the region’s economy,” Paul Gangi with the Massachusetts Fiscal Alliance writes about TCI. “To produce the high-end estimate of an additional 6% point reduction in emissions (25% overall), they would impose a $56 billion tax on the region’s economy.”

Read rest at Forbes

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Comments 5

  1. Spurwing Plover says:
    5 years ago

    Like back when we had the two Hurricanes Harvey and Irma and like with Hurricanes Karina and Sandy they stupidity blamed them all on Global Warming/Climate Change and two nit-wits from Greenpeace tried to blame Global Warming/Climate Change for the Boxing DDay Tsunami of 2004 Yest Eco-Wackos are incredebly stupid

  2. David Lewis says:
    5 years ago

    Of the twelve states that are supposed to be part of the TCI, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and Virginia, I suspect that half will not implement the policy. In most cases the state legislator has to act and many will not buy into the scheme. Depending on the state, if the state legislator passes the laws needed to join TCI, the people may take action with tools like initiatives undo what the legislators did. If I understand the TCI, it requires broad based participation.

    Governor Sununu “I will not force Granite Staters to pay more for their gas just to subsidize other states’ crumbling infrastructure.” Now consider that the third world nation’s plan to receive the billions they are demanding relies on a gas tax to provide some of the funding. Even the negotiators at the COP meetings would agree to this, it would never be implemented.

  3. Spurwing Plover says:
    5 years ago

    Just remember New Hamshire’s state motto is LIVE FREE OR DIE yeah Hawkdriver Karl Marx was a Liberal most likely his book THE COMMUNISTS MANIFESTO and would be 100% behind the Watermelon Movement

  4. Russell Johnson says:
    5 years ago

    TCI is a carbon tax that will have no measurable effect on climate. It’s revenue enhancement plain and simple. Never forget the consumer pays for everything; anyone who buys a product pays for the energy to produce and transport the item. Everyone buys gasoline and diesel fuel.

  5. Hawkdriver says:
    5 years ago

    “…funded through progressive taxation….” right out of Karl Marx ‘Communist Manifesto’ play book!

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