Conn. joining regional transit plan
Lamont would raise state gas tax to reduce carbon emissions
“You know me, I like to work on a regional basis, especially when it comes to things like climate.”
Gov. Ned Lamont
Gov. Ned Lamont has signed on to a regional climate initiative, which if approved by the General Assembly would likely result in the first hike in the state’s gasoline tax since 2000.
While the higher prices would be determined by diesel and gasoline wholesalers participating in the quarterly auction of credits, it’s likely to raise costs at the pump by at least a nickel a gallon. Opponents charged on Monday that price increases would be much-higher, possibly 17 cents in the first year.
The goal of the Transportation & Climate Initiative Program, is to rid the air of carbon emissions, while promoting mass transit and cleaner travel options, including electric cars and buses. It could raise about $300 million a year for the new programs across more than a dozen states in the Northeast and Washington, D.C.
“You know me, I like to work on a regional basis, especially when it comes to things like climate,” Lamont said during his daily news
briefing from the State Capitol. “This is going to go through a couple of twists and turns in the Legislature before we get anywhere. I don’t ask for any gas-tax increase, but the wholesalers will be buying credits if they exceed pollution limits.”
Asked how much the gas tax might rise, Lamont side-stepped the question. “Think about it a little bit differently,” he told reporters. “There’s a cap on the amount of carbon and that’s how we make a big difference in terms of transportation-related particulates that get into the air and create a lot of the environmental damage. People would pay a premium in order to buy more of those credits. That’s at the wholesale level.”
Rather than charging consumers the nickel a gallon, Lamont said wholesalers might take the fivecent loss to stay competitive at the pump.
“I presume it would be passed on to the consumer, just like many taxes are passed on to the consumer,” said state Rep. Jason Rojas, D-East Hartford, the current co-chairman of the tax-writing Finance Committee who will be the next House Majority Leader when the General Assembly convenes on Jan. 6. “If you look at the intent, everyone can agree there are laudable goals, but the problem we have often in the Legislature is how to pay for them.”
It’s unclear how much higher prices would go, or whether majority Democrats in the House and Senate will support it, as Republican opposition would likely be steadfast. The current 25-cent tax, which was last increased in 2000, does not include a flexible wholesale levy - called a gross receipts tax - that amounts to less than 20 cents a gallon and rises and falls based on wholesale prices.
Katie Dykes, commissioner of the state Department of Energy and Environmental Protection, said in an interview Monday that the largest cities, including Bridgeport and New Haven, have asthma rates of up to 10 percent, mostly because of vehicular emissions. “It’s a marketbased mechanism to guarantee emission reductions,” Dykes said, stressing that a 26-percent reduction in emissions can be reached during the decade starting in 2023.
“This program is going to enable investment in a transparent way with an equity advisory body to make sure those communities are the first in line for benefits,” Dykes said.
Christopher Phelps, executive director of Environment Connecticut, an advocacy group, said the whole point of the marketbased system, in which wholesalers make bids on credits to fund transit projects, is not to raise gas and diesel taxes.
“Of course, in theory oil companies could pass on their cost of purchasing allowances under the program,” Phelps said. “But that's not required. That also doesn't take into account the potential for the cap to push the market toward cleaner fuels and greater efficiency over time, or the ability for the state to invest the revenue in ways that reduce transportation costs for average folks.”
Incoming State Senate Minority Leader Kevin Kelly, R-Stratford, said Monday that he expects the higher tax would be about 17 cents per gallon.
"Merry Christmas, Connecticut,” Kelly said in a statement. “On the Monday before Christmas, Gov. Lamont has given a lump of coal to middle-class families. This tax hike will burden middle class families' budgets at the absolute worst possible time without improving our aging transportation infrastructure. His holiday gift to Connecticut families is new and higher taxes.”
Joseph Sculley, who as president of the Motor Transport Association of Connecticut represents about 500 mostly Connecticut-based haulers, said Monday that he agrees the gasoline tax could rise as much as 17 cents in the first year and possibly increase to 45 cents over 10 years.
“As small businesses fighting for their lives, we are adamantly against it,” Sculley said in a phone interview. “This is about money for trains, buses and electric-vehicle subsidies. This isn’t about roads and bridges.” He will be lobbying against the proposal when the General Assembly convenes on Jan. 6. “This is a memorandum of understanding and the MOU doesn’t have the force of law. Ultimately the legislature is going to have to vote on this.”
Chris Herb, President of the Connecticut Energy Marketers Association, said the initiative is more about raising money than cleaning the air.
"If adopted, TCI will reduce greenhouse gases by a meager five percent while increasing gasoline prices by as much as 38 cents in the first year alone and by 61 cents in the next decade,” Herb said. “This would be the breaking point for many people in Connecticut already struggling to make ends meet and quite frankly, just trying to survive.”
State Sen.Carlo Leone, D-Stamford, co-chairman of the legislative Transportation Committee, said Monday that it is important to mitigate the damage that car exhaust does to state residents. “The General Assembly is going to have a say on this, and we’ll have to figure out what the reality and what perceived savings are,” he said. “We could raise up to $70 million to reinvest into transportation.”
In recent years the state has raised about $500 million a year in gasoline taxes but that figure has fallen sharply in recent years as residents drive less in the COVID recession, use more fuel-efficient cars and as gasoline prices decline.
The state’s Special Transportation Fund for transit-related projects is scheduled to go broke sometime in 2022.
Connecticut on Monday joined Massachusetts, Rhode Island and the District of Columbia in the Transportation & Climate Initiative Program, aimed at modernizing transit in the Northeast and Mid-Atlantic regions and using proceeds for projects related to reduced carbon.
Lamont’s move follows his protracted effort, and failure, to add highway tolls in 2019 and again earlier this year. Those plans, which Republicans opposed unanimously and Democrats did not bring up for votes in the General Assembly, would have raised between $300 million and $800 million a year, much of it from outof-state drivers and interstate truckers.
Other states are expected to join, including possibly New Jersey, New York, Vermont, Delaware, Maine, Pennsylvania, Maryland and Virginia, which are all involved in negotiations to join.
Lamont said in January he was backing away from the state’s commitment to the TCI that had been signed by his predecessor, former Gov. Dannel P. Malloy — along with 11 other northeastern and midAtlantic states. Lamont said during an WNPR radio show that raising the gas tax was “probably not the way to go.”
An analysis by the Caesar Rodney Institute’s Center for Energy and Environment indicated that an increase to the gas tax would cost about $260 per household in Connecticut, according to the Yankee Institute, a conservative think tank and registered lobbying organization.