What is the Transportation Climate Initiative? How will it effect Massachusetts?
The Transportation Climate Initiative is an agreement by several northeastern and mid-Atlantic states to reduce carbon emissions from the transportation sector. This is part of a larger effort by the left to artificially increase the price of fossil fuels by taxing the carbon they emit when used (also known as a Carbon Tax). Massachusetts Governor Charlie Baker signed the Commonwealth up for this initiative last year and administration officials have been meeting to develop the framework necessary to implement this initiative in our state.
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To carry out their policy, TCI seeks to implement a “cap-and trade” system in the participating states. What does that mean? Well, an arbitrary cap on carbon emissions from gas and diesel fuel used in vehicles would be set. Fuel distributers would be forced to buy “allowances” of carbon emissions resulting from the use of their products until the cap is reached. The cap on total emissions allowed would go down each year, forcing fuel distributors to play musical chairs over allowances as they become more scarce. Typically this type of low supply and high demand would result in a spike in prices or even not enough of a supply to fill the demand. The money collected from purchasing these allowances would then be used by state governments to fund expenditures, but unlike the traditional gas tax, the money would not be required to be used on road and highway maintenance. If that sounds like a tax to you, it’s because that’s what it is. TCI is nothing more than a political euphuism for a new, tax on gasoline and diesel fuel used in vehicles. This new tax would be in addition to, and completely separate from, the traditional tax paid on fuel.
Secretary of Energy and Environmental Affairs Kathleen Theoharides claims the difference between TCI and the traditional gas tax is the point of regulation. This is irrelevant to consumers who will soon be paying more at the pump to support increased government spending. For normal people, this is a tax.
Luckily, some on Beacon Hill are more transparent than others regarding the scheme. State Rep. William Straus, the House chairman of the Transportation Committee, recently described TCI as a gas tax, stating: “All states raise their gas tax the same amount at the same time and agree not to call it a gas tax, but I think the public is smarter than that.”
According to the Massachusetts state constitution, “no subsidy, charge, tax, impost, or duties, ought to be established, fixed, laid, or levied, under any pretext whatsoever, without the consent of the people or their representatives in the legislature.” Gov. Charlie Baker does not have authority to unilaterally raise taxes. Even if the governor doesn’t want to describe the TCI as a tax, in order to justify bypassing legislative approval, the governor would be wise to take this before the State House and Senate.
There is a moral obligation to seek legislative approval before asking every resident who drives a gas or diesel powered vehicle to spend much more at the pump. In our view, such a far reaching policy change should require buy-in by the elected representatives of our state government.
Make no mistake: this is a very slippery slope for Massachusetts. Although this is still in the early stages, lawmakers from other states in the TCI agreement are seeking legislative approval.
Massachusetts Fiscal Alliance strongly urges lawmakers to stand up for the democratic process and bring this issue before the legislature for proper consideration.
With the release of the first Memorandum of Understanding in December 2019, more specifics of the TCI plan have become available to the public. The key take away: the initial increase in gas prices will be between 5 and 17 cents per gallon, depending on the exact plan they wish to pursue. Additionally, TCI proponents are being extremely disingenuous with their projections on emissions reductions. Despite its significant financial cost, TCI would only decrease emissions an additional 1% to 6%.
On December 21, 2020 Governor Baker announced that Massachusetts, Rhode Island, Connecticut, and Washington DC would be joining the TCI scheme.
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MassFiscal Resources on the Transportation Climate Initiative (TCI)
MassFiscal OP-ED on the Transportation Climate Initiative – The Lowell Sun
MassFiscal Letter to Elected Officials on TCI
Transportation Climate Initiative Official Website Stakeholder Input
National Federation of Independent Business Op-Ed Opposing TCI
Tufts University Study Analyzing Effects of TCI (November 2020)
Fiscal Alliance Foundation January 2020 Poll On Support for TCI
November 2020 Poll on COVID Impacts on Support for TCI (Fiscal Alliance Foundation)
March 2020 Study from Beacon Hill Institute on TCI Costs being Higher Than Disclosed