With all due respect, Governor, TCI is a tax.
The Transportation Climate Initiative, or TCI, calls for a proposed emissions fee on gasoline to help battle climate change. On the surface, supporters say it is a small price to pay to help save the planet; and if you truly believe that this is the case, then you should consider voting for it. Despite the administration’s efforts to go out of their way to not call TCI a tax, the simple truth is that it will only create additional financial hardships on lower- and middle-income families struggling to make ends meet during the pandemic.
Let’s start with the first and most obvious reason: TCI will create a fourth gasoline tax. That’s right, a fourth gasoline tax in a state that already pays the highest gasoline taxes in New England. There is: the federal excise tax, the state excise tax, the petroleum gross earnings tax and now this new, proposed emissions tax under TCI. Supporters call it “cap and trade” which makes fuel suppliers buy credits based on the amount of emissions from gasoline powered vehicles.
According to Merriam-Webster Dictionary, a tax is: A: a charge usually of money imposed by authority on persons or property for public purposes. B: a sum levied on members of an organization to defray expenses.
I’d say TCI fits the definition of a tax to a to a T!
The Department of Energy and Environmental Protection and Gov. Ned Lamont have said that it’s up to fuel distributors on whether they want to “pass this on” to consumers. Our response has always been that there is no way that an industry that is based on a pennies per gallon margin could absorb a fourth tax. The simple truth is that the TCI tax will be passed on to the public just like every other tax on fuel is.
Here’s the tricky part: No one seems to know for sure just how much TCI will cost Connecticut drivers. Governor Lamont said a 5 cents per gallon increase was most likely, but at the same press conference, DEEP Commissioner Katie Dykes said it could be as high as 10 cents. So, what is it?
Ever since TCI first entered the scene, the costs associated with it have been all over the place, not by our studies but by studies done by TCI and more recently, an independent study done by Tufts University in November of 2020. TCI pegged the price increase at 17 cents a gallon and the Tufts study by as much as 61 cents per gallon. Commissioner Dykes told reporters that critics (meaning us) were cherry picking old studies; November 2020 is not old.
Governor Lamont also said he can control the price of the gasoline increase based on the fair market value of the emission credits. So, basically, if the price of gasoline goes up, he can create more carbon credits to lower the overall cost of gasoline. However, this leads to other serious questions, the biggest one being the most obvious: Do we really want our governor controlling the price of gasoline? Also, let’s say Governor Lamont keeps his word and doesn’t go over 5 cents per gallon increase. What about the next governor? Will he or she make the same pledge? This is dangerous territory and the proposed legislation does not cap this tax so the sky is the limit on how high it may go.
TCI will increase the price of fuel, but it won’t reduce emissions. It’s just a backdoor scheme to raise money that tolls would have raised. Every penny of new tax would generate $16 million, so at 5 cents, it would raise $80 million; 10 cents —$160 million for the State of Connecticut—through a regressive tax that would only create more hardships for low and middle-class families in our state. There is a reason why nine other states decided not to join TCI. We urge Connecticut lawmakers to join those states and “just say no” to Senate Bill 884 that would create a new tax on gasoline.
Christian A. Herb is President of the Connecticut Energy Marketers Association.