An environmental cap and trade proposal would raise prices at the pump.
The following column by NFIB’s Massachusetts State Director, Christopher Carlozzi appeared in the Eagle-Tribune on November 4th:
A Tax by Any Other Name is Still a Tax
Business owners and commuters are about to be hit by a new broad-based tax, masquerading as an environmental policy. Massachusetts is expected to join 11 other eastern states in a compact called the Transportation Climate Initiative. The TCI’s mission is to reduce greenhouse gasses emitted by cars and trucks. And while ensuring our vehicles are cleaner and energy-efficient may be laudable, the cost of the program will be paid for by motorists and especially small businesses in the form of a hidden gas tax.
Proponents claim this won’t be a tax because it’s a “cap and invest” program. The idea is to cap emissions by charging fuel distributors an “allowance” for the carbon intensity of their product, then invest the windfall proceeds of those fees to promote non-fossil fuel transportation such as public transit or rebates for electric cars. Yet, at a recent hearing, the transportation secretary admitted gas prices would rise as that increase is passed down to consumers. That aligns with the intent of the program, which is to change consumer behavior by dissuading Massachusetts motorists from driving and encourage the use of public transportation. Let’s be clear–a tax by any other name is still a tax.
This new tax will fall not only on consumers but small businesses. Vehicles must get to job sites with equipment and supplies. Products are transported to local stores, restaurants, and directly to consumers. Just think about the financial hit that will befall small businesses owners who have lawn care, cleaning services, or offer food delivery. Smaller companies can only absorb so much and remain profitable before being forced to raise prices. The cost of goods and services will rise for every Bay State resident. Those workers commuting by car, where telecommuting or public transportation is not a viable option, will pay a higher tax.
Gasoline is a price-sensitive consumer product and drivers will seek out lower prices. While some New England states have said they plan to join TCI, New Hampshire has remained noncommittal. If New Hampshire opts out, people living near that border will cross it to save money. While there, they will also buy coffee, candy, and soda and those businesses and our state lose revenue.
California enacted a similar “cap and invest” policy that resulted in consumers paying an additional 13-14 cents more per gallon at the pump. On Oct. 11, the AAA fuel price survey showed California regular gasoline at $4.18 a gallon, when the nation averaged $2.64. The state of Oregon attempted a similar proposal earlier this year that would have added 23 cents per gallon in emissions taxes in 2021 and then increase to $3 per gallon by 2050. Lawmakers in Oregon wisely rejected this job-killing piece of legislation. Let’s hope Massachusetts does the same.
Christopher Carlozzi is state director of NFIB in Massachusetts, a small business association that advocates on behalf of thousands of members.
