New Haven Register (New Haven, CT)
Conn. joining regional transit plan to clean air
Lamont would raise state gas tax to reduce carbon emissions and improve transit
Gov. Ned Lamont has signed on to a regional climate initiative, which if approved by the General Assembly would result in the first hike in the 25-cent per gallon gasoline tax since 2000.
While the higher prices would be determined by diesel and gasoline wholesalers participating in the so-called cap-and-trade program, it’s likely to raise costs at the pump by at least a nickel a gallon. The goal is to rid the air of carbon emissions, while promoting mass transit and cleaner travel options, including electric cars and buses.
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 does not include a wholesale levy - called a gross receipts tax - that amounts to less than 20 cents a gallon and rises and falls based on prices.
“This is a policy shift to reduce greenhouse gas emissions in historic ways to help some of our mostimpacted communities across the state and the region,” said Max Reiss, communications director for Gov. Ned Lamont. Katie Dykes, commissioner of the state Department of Energy and Environmental Protection, said in an interview Monday that the air in the state’s largest cities, including Bridgeport and New Haven, have asthma rates of up to 10 percent, mostly because of vehicular emissions. “It’s a market-based mechanism to guarantee emission reductions,” Dykes said, stressing that a 26-percent reduction in emissions can be reduced over the decade starting in 2022.
“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 believes 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 legis 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. “We already have one of the highest gas taxes in Connecticut. 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. We could raise up to $70 million to reinvest into transportation.”
A draft proposal last December indicated the state’s joining the program, similar to another regional agreement on greenhouse gas emissions, could lead to a 17-cent rise per gallon in gas prices. 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 fuelefficient 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 joined Massachusetts, Rhode Island and the District of Columbia on Monday in the Transportation & Climate Initiative Program (TCI), aimed at modernizing transit in the Northeast and Mid-Atlantic regions. It will require the state to channel the new tax revenue — if Lamont gains legislative approval — into the state’s fund for transportation, which faces insolvency.
The money could only be used 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.
“Participating in the TCI-P will help grow our economy through a fresh injection of capital to provide for jobs and new infrastructure,” Lamont said in a written statement annluncing the deal. “This collaboration will cut our greenhouse gas emissions, and it will make our urban centers healthier, after decades of being adversely impacted by the emissions being released by traffic every day.”
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.
The goal is to reduce carbon pollution in the transit sector, encourage mass transportation and save states billions of dollars in transportationrelated health costs.
Connecticut and several neighboring states joined the initiative — which includes states from Maine to Virginia — in December 2015, vowing to develop policies to reduce transportation sector emissions.
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 mid-Atlantic states. Lamont said during an WNPR radio show that raising the gas tax was “probably not the way to go.
Under the initiative, the proceeds from the fee on gas would be distributed to the participating states. Those funds could be used to fund transportationrelated carbon reduction projects.
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.
The initiative requires gasoline companies and distributors to buy carbon allowances for gasoline sold in states across the northeast.