If Gov. Charlie Baker succeeds in his efforts to have Massachusetts join the Transportation and Climate Initiative, a 12-state compact to reduce carbon emissions by imposing fees on fuel distributors, it will be a Pyrrhic victory.
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If Gov. Charlie Baker succeeds in his efforts to have Massachusetts join the Transportation and Climate Initiative, a 12-state compact to reduce carbon emissions by imposing fees on fuel distributors, it will be a Pyrrhic victory. It will put our state’s small businesses at a major competitive disadvantage and increase gas prices significantly for every driver. As details of TCI become clear, more states are wavering on supporting this deeply flawed public policy.
TCI is a backdoor way to increase Mass. gas prices, a hidden tax. While the initial fee would be levied upon fuel distributors, those costs will be passed on directly to motorists.
Proponents deceptively argue TCI isn’t a tax as the fuel distributors would be forced to buy allowances for the carbon intensity of their product. These fees would be used by the state to promote non-fossil fuel transportation such as public transit or electric car charging stations. But have no doubt, it’s a regressive tax on commuters and small businesses.
Economic projections from the crafters of TCI show if implemented, gas prices would rise as high as 17 cents a gallon. Ironically, they admit carbon would already be reduced without TCI over the next 10 years by 19% due to better fuel economies and technology. So, according to the program’s own analysis, TCI would only deliver between a 1% and 6% reduction in carbon but at an extremely high pricetag for all Massachusetts commuters and small businesses.
Small businesses require fuel for their operations, from landscapers and excavators powering machines to pizza and flower shops making deliveries. If the price of fuel rises, the cost of products and services will increase. It will be more expensive to ship products from Mass. manufacturers, and retail stores will pay more for goods. Consumers would be forced to spend more of their hard-earned money.
The multi-state approach of TCI was intended to ensure fuel prices would rise uniformly so no state would get an economic advantage. But the compact is falling apart.
After TCI’s organizers announced projections of much higher gas prices, New Hampshire Gov. Chris Sununu dropped out of the pact, declaring his state’s residents should not face significantly higher fuel charges to fix Massachusetts’ crumbling infrastructure, calling TCI a financial boondoggle. Now, if Massachusetts goes forth with TCI, gas stations in Haverhill and Methuen would face a competitive disadvantage just over the border in New Hampshire.
Other governors and legislative leaders are raising similar concerns. Gov. Phil Scott of Vermont said penalties aren’t the way to go when it comes to carbon reduction, indicating he doesn’t support TCI. Governors of Connecticut and Maine and the Rhode Island House Speaker have hinted they too have concerns about adopting the program.
As the coalition crumbles, Massachusetts stubbornly limps forward. Small businesses, their employees, and all drivers in our state should tell their lawmakers and Gov. Baker to reject TCI to keep transportation costs affordable and avoid this economically devastating policy.
Christopher Carlozzi is the Massachusetts state director for the small business advocacy group NFIB.
