Gas Tax

What Rhode Islanders should know about the TCI Gas Tax Q & A about the Transportation & Climate Initiative

Analysis by the RI Center for Freedom & Prosperity

On December 17 the Georgetown Law Center, in cooperation with the Raimondo administration in Rhode Island and other regional state governments, published its Transportation and Climate Initiative (TCI) draft Memorandum Of Understanding (MOU). It will be open for on-line comments until February 28. At some point after that, Governor Raimondo is expected to initiate a process for our state to officially join the TCI regional compact. 

The original plan was to seek legislative approval to enact some provisions to make TCI enforceable on Rhode Island fuel dealers. However, with bi-partisan opposition building in the state for this stealth gas tax, it is unclear if the Governor will attempt to act solely by “executive” authority and attempt to bypass the General Assembly. 

Here are some questions and answers that will explain what the TCI proposed policy is, and what it expects to do.

Q: What is TCI? 

TCI is a multistate regional agreement designed to drive up the price of motor fuel (gasoline and on-road diesel).  It proposes to start at five, nine or seventeen cents per gallon, and escalate upward from that, with no declared maximum.

Q: Why do TCI backers and climate alarmists want to drive up the price of motor fuel? 

Because they are convinced that “climate change poses a clear, present, and increasingly dangerous threat to the communities and economic security” Rhode Island and other regional states. The MOU says that the participating states will “need to implement bold initiatives to mitigate the impacts of greenhouse gas emissions from the transportation sector,” which produce 40% of human-caused emissions. 

Q: This sounds familiar. Isn’t this TCI attack on transportation just an extension of “RhodeMapRI”?

Yes. While much of our Center’s years-ago battle against RhodeMapRI focused on property rights, it has always been the goal of the left’s larger “sustainability” objectives to restrict and reduce the use of personal autos and business vehicles.

Q: How will TCI drive down those emissions? 

By driving up the price of gasoline and diesel fuel so you will be financially forced to drive less, drive smaller cars, use electric vehicles, walk, ride bicycles, use public transportation, move closer to school and work, and so on.

Q: How does TCI drive up motor fuel prices?  

TCI creates a “cap and invest” system, or what we call a ‘cap-and-trade’ carbon tax scheme. TCI sets a cap, or limit, on carbon dioxide emissions from burning regular and diesel motor fuel. Every distributor of motor fuel – many dozens in Rhode Island – will be required to purchase “allowances” to match the motor fuel sold during each reporting period.

Q: So motorists, including passenger cars, pickups, SUVs, vans, school buses, delivery trucks, contractor vehicles, milk tankers, ambulances, state and municipal trucks, and motorcycles will end up paying for the allowances?  

Yes, fuel prices are expected to rise significantly at the gas pump.

Q: Won’t TCI hit hardest on working people and the poor, especially in our state’s rural areas? 

Yes. As a regressive tax, the TCI Gas Tax will disproportionately harm low-income families, especially those who live some distance from commercial centers or their workplace.

Q: What does the state get for imposing these costs on motorists? 

TCI will distribute among the participating states some fraction of the revenue from its sale of “allowances”, per a yet to be determined formula. The states are supposed to use these revenues to further drive down gasoline and on-road diesel use, and “help their residents transition to affordable, low-carbon transportation options”. Paying people to buy electric cars and funding more mass transit systems, are examples of how your gas money might be spent. However, it appears that a designated state agency will have final say on how the funds are spent, not the General Assembly.

Q: How many “allowances” will TCI issue? 

As many – or as few – as it sees fit. In ceding ‘taxing’ authority to a regional entity, TCI, in essence creates a shadow governmentof unelected bureaucrats who can unilaterally decide how much of a ‘gas tax’ motorists should pay in Rhode Island and in other states.

TCI can invent allowances out of thin air anytime its ideologues want to further punish motorists. Motor fuel distributors will be forced to go into TCI’s auction market to buy enough of them with real money to match their motor fuel deliveries over a preceding reporting period. 

The cost of these “allowances”, which will necessarily increase as the allowable supply is systematically reduced, will be passed on to motorists in the form of continually increasing gas prices that you will be forced to pay at the pump.

Q: How much will the preferred TCI scenario reduce carbon dioxide emissions from motor fuel? 

The Josiah Bartlett Center in New Hampshire analyzed the TCI economic model. It found that the “reference case” used by the Georgetown Climate Center to project what would happen from 2022 to 2032 if states did notimplement the TCI would likely be a 19% reduction in carbon dioxide emissions, due to technological advances and existing fuel regulations. 

If TCI isimplemented, regional emissions are only projected to fall by an additional 1% to 6%, on top of the presumed 19% reduction. In short, TCI would extract $56 billionregionally from motor fuel users to reduce carbon dioxide emissions by a little more than 5 percent over ten years.  

Q: Will the reduction of emissions projected by TCI actually reduce “climate change”?

No, not in any measurable way. In fact, using the United Nation’s own climate change modeling tool, MAGICC, the effect of the TCI regional compact, even if implemented across the entire region until the year 2100, would produce ZEROimpact(out to 3 decimal places) on global temperatures.

Q: What is the Cost-vs-Benefit calculation for TCI?

Miserable. Why should Ocean Staters be forced to pay for something that will produce no environmental benefit?

Like most all prescriptions by environmental radicals, TCI would have a net-negative impact on state economies without any corresponding benefit. Our Center’s policy brief on TCI describes the negative impact another cap-and-trade compact (on electricity) that Rhode Island joined 2007, RGGI (the Regional Greenhouse Gas Initiative), has resulted in clear economic losses for participating RGGI states.

Q: Gov. Gina Raimondo has steadfastly advocated that this stealth TCI tax on gas is needed to “save the planet”. Doesn’t the General Assembly have the sole authority to impose taxes?

Yes, that’s what most constitutional experts assert. If she attempts to act unilaterally via executive power, and bypass the General Assembly, the Governor would certainly be inviting a lawsuit over Constitutional separation of powers.

Already, New Hampshire’s governor has rejected the TCI carbon tax scheme, while the governors of Vermont and Connecticut have openly expressed skepticism about carbon taxes and TCI.

Q: Sounds like TCI is actually a “sin tax,” is that true?

Yes, pretty much. TCI seeks to punish people for using personal and business vehicles in the course of their everyday lives. The climate extremists who created TCI believe that it is a sinfor you to drive to work, take your children to school, visit family, take your car shopping, or deliver goods or services … we do not!

Q: What can I do to voice my views on the stealth TCI Gas Tax? 

You can read more about TCI on our Center’s webpage –– where you will be directed to sign a #NoTCItax petition and/or comment directly on the TCI website. 

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