People grieve in many ways. But it’s unfortunate that State Rep. Christine Palm used ad hominem attacks last week while relitigating one of 2021’s top policy fights, when her colleagues in the Connecticut General Assembly rejected the Transportation and Climate Initiative (TCI).
Representative Palm owes the professionals who work for me at Yankee Institute an apology. As the record reflects, they have been repeatedly proven correct.
TCI was essentially a plan to force fuel companies to buy one of a limited number of permission slips before they could sell a gallon of gasoline or diesel fuel into Connecticut, Massachusetts or Rhode Island. Its goal was to raise money under the auspices that the resulting increased gas prices would depress demand for fuel and reduce carbon emissions in the process.
New York, New Jersey, Maine, and other early TCI supporters declined to join when the program began firming up in late 2020. After the General Assembly adjourned last summer without voting on a bill that would commit Connecticut to TCI regardless of who was governor, the state’s TCI partners— Massachusetts and Rhode Island—pulled out.
Connecticut already has New England’s highest gas tax — and TCI would have added to it. Yankee Institute warned, among other things, that based on the program’s own definition of success, TCI would have to drive gas prices far higher than the 5 cents, or 9 cents, or other amount supporters insisted it would add to the cost of a gallon of fuel.
Gas demand is notoriously inelastic. People tend to keep paying higher prices rather than reduce their consumption—meaning any plan that actually succeeded in forcing them to use less fuel would have to inflict extreme pain at the pump.
Recent events have proven just that. Gas prices across New England in December averaged 54 percent above their prior-year levels—and drivers bought about 7 percent more gasoline, as the economic recovery boosted demand more than higher prices suppressed it. Looking back further, gasoline prices nearly doubled between 2003 and 2007 while the amount sold in the region ticked down just 4 percent. TCI’s remaining fans lament that the price of fuel isn’t higher yet—and remain in denial about how TCI was more effectively tailored toward raising revenues than curbing carbon emissions.
Proponents last year oscillated between insisting they could hike prices enough to deter driving, swearing that the cost wouldn’t be substantial, and ginning up support by saying how much cash it would raise. TCI was simultaneously a plan to induce a massive behavior change, as well as a barely noticeable price increase, and predicated on the idea that Hartford needed more cash.
As Representative Palm herself acknowledges, TCI backers were lowballing the costs for a typical household (even accepting the premise that the per-gallon cost would be small). At another point, backers claimed hundreds of millions of dollars from TCI would flow into the state’s constitutionally protected gas-tax lockbox—until Yankee Institute pointed to the language in the law and the state constitution proving it wouldn’t.
If TCI were indeed going to be painless, its framing as an effective climate policy was wholly misleading. If it wasn’t about raising cash for politicians to dish out, why not trim another tax to offset the added money coming out of Connecticut’s wallets?
Yankee Institute drew a red line years ago about policies that drive up the cost of living and doing business in Connecticut. Since the Great Recession, our state has been stuck in a self-defeating cycle. Hartford’s tax and regulatory policy choices have stifled growth and caused tax receipts to come in below expectations. TCI, like Governor Lamont’s proposal to charge tolls on state highways, was built on the premise that the state’s spending practices should more or less escape scrutiny and that policymakers should be looking for more revenue—to which Yankee Institute said, “Not one cent more!”
If that position strikes you as unreasonable, please consider the state’s economic picture. Connecticut failed to add private-sector jobs in the three years before the pandemic; several iconic Connecticut employers have moved their headquarters to other states; our population barely changed in the last census because people were leaving for other states faster than they moved here; and Massachusetts is poised to overtake us as the country’s wealthiest state.
Yankee Institute’s mission is to ensure every man, woman, and child in Connecticut has the opportunity to succeed. That means challenging decades of bad policy decisions, by Republicans and Democrats alike, that placed our state on a trajectory of decline and pushing back against any new ones. TCI involved unilaterally imposing a burden on Connecticut residents that would be more appropriately considered at the federal level—and that truckers would dodge by fueling up in Newburgh and Portsmouth.
I won’t answer each of the misrepresentations and innuendos Rep.e Palm made in her article, which was heavy on Donald Trump references and light on data. But I must single out her derogation of a capable investigative reporter, Marc Fitch, whose thorough fact-check of her TCI cost claims led her to ridicule him for writing a book examining the psychology behind Americans’ susceptibility to superstitions such as Bigfoot.
Here’s hoping Marc’s next edition has a chapter explaining the people who think Connecticut needs another tax.
Carol Platt Liebau is the President of Yankee Institute.