RI State Director publishes op-ed
NFIB’s State Director in Rhode Island published a recent editorial on a regional cap and trade program the state is considering joining that could hike the price of gas by 17 cents a gallon. It appeared in the Providence Journal:
Rhode Islanders May Face 17 Cents a Gallon Gas Tax Hikes Under TCI
Business owners and commuters may soon feel the pain of a new broad-based tax, being promoted as an environmental policy. The Transportation and Climate Initiative (TCI) is an 11-state compact to reduce carbon emissions by imposing fees on fuel distributors, which will increase gas prices significantly for drivers and put Rhode Island’s small businesses at a major competitive disadvantage. As details of TCI become clear, more states are questioning their support for this deeply flawed public policy.
Proponents deceptively argue TCI isn’t a tax because it’s the fuel distributors that would be forced to buy “allowances” for the carbon intensity of their product. The proceeds of these fees would be used by the state to promote non-fossil fuel transportation such as public transit or electric car charging stations.
But don’t let that misleading pitch fool you — if it hits your wallet like a tax, and the state is ultimately getting your hard-earned money, it’s a tax.
Economic projections from the crafters of TCI show if implemented, gas prices would rise as high as 17 cents a gallon. Ironically, they also admit that carbon would already be reduced without TCI over the next ten 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 price tag for all Rhode Island commuters and small businesses.
Many 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 provided by those companies will increase for customers.
It will also become more expensive to ship products from Rhode Island manufacturers, and retail stores will pay more for goods. Meaning the budgets of consumers will be further strained.
The multi-state approach of TCI was intended to ensure the price of fuel would rise uniformly across the region so no state would get an economic advantage. But the compact is starting to fall apart.
After TCI’s organizers announced their projections for much higher gas prices last December, New Hampshire Governor Chris Sununu immediately dropped out of the pact. He declared his state’s residents should not face significantly higher fuel charges to fix Massachusetts’ “crumbling infrastructure” and referred to TCI as a “financial boondoggle.”
Other Governors and legislative leaders are raising similar concerns. Governors of Vermont, Connecticut, and Maine have hinted they too have apprehensions about adopting the program.
In a December 2019 television interview when asked about TCI, Governor Raimondo commented, “Will there be a tax associated with the Transportation and Climate Initiative, oh most certainly.” Governor Raimondo appears to stand with Massachusetts Governor Charlie Baker as a resolute supporter of this costly plan. But Speaker Mattiello took a different tone, stating that any tax increase, including a gas tax increase resulting from TCI, would be looked at “skeptically.”
As the coalition of TCI states crumbles, Rhode Island can choose to tether itself to a high-cost state like Massachusetts or opt-out on behalf of taxpayers like New Hampshire. Every small business, worker, and driver in our state should demand their elected officials reject the Transportation and Climate Initiative to keep transportation costs affordable and avoid this economically devastating policy.
Christopher Carlozzi is the state director of the National Federation of Independent Business (NFIB), which represents hundreds of small and independent businesses in Rhode Island.
