A new regional carbon charge for transportation sure looks a lot like a gas tax at first glance.
But several Massachusetts business groups have been much quicker to embrace this multistate effort, called the Transportation & Climate Initiative, over a gas-tax hike. Their positions did not change, at least not publicly, Tuesday when new cost estimates emerged that showed TCI could cause prices at the pump to rise by up to 17 cents a gallon.
The business community’s positions on these issues will be important on Beacon Hill as lawmakers prepare for a debate next year about the best ways to raise funds to address the state’s traffic jams, crowded trains, and other transportation woes.
Most — but not all — major Massachusetts business groups support TCI.
However, the local chapter of the National Federation of Independent Business, for example, came out swinging, essentially saying TCI is just another way of imposing a gas tax. Chris Carlozzi, the group’s state director, says TCI will simply increase costs for small businesses and their customers, with negligible environmental benefits, while putting the states involved at a competitive disadvantage.
The federation is in a distinct minority, though. A number of business groups support both a gas tax increase and a TCI charge, which would take the form of pollution allowances auctioned off to wholesale fuel suppliers.
That said, some questions remain. The Greater Boston Chamber of Commerce, for example, says it backs a gas-tax increase and TCI – but with an asterisk or two. Chamber officials wonder how much emissions in the region would drop anyway, even without this complex multistate effort. They want assurances that enough states in the Northeast and Mid-Atlantic will go along, and they argue the transportation system needs new revenue as soon as possible, as well. A gas-tax spigot could turn on tomorrow — assuming the Legislature agrees — but TCI revenue wouldn’t arrive for another two years, at the earliest.
Others continue to side with Governor Charlie Baker on this — resisting a gas-tax hike while pushing TCI. That camp includes Associated Industries of Massachusetts, the Massachusetts High Technology Council, and the Massachusetts Competitive Partnership. There are critical distinctions, they say, between the gas tax and TCI.
One is the potential environmental impact. AIM spokesman Chris Geehern points out that the state remains under pressure to significantly pare back its carbon emissions, under an aggressive 2008 state law. Power plants have done their part. Now, state officials are trying to curb greenhouse gases from the transportation sector. TCI, Geehern said, is designed to specifically do just that, in part by setting up a market mechanism that rewards suppliers that sell cleaner fuels. Mark Gallagher at Mass. High Tech also sees the decision to involve nearly all of the states from Virginia to Maine in the TCI discussion means that Massachusetts won’t be going it alone. Plus, he noted, the financial impact from TCI would likely be much smaller than the cost of a broader transportation revenue package that House leaders are likely to put forward.
And Mass. Competitive Partnership CEO Jay Ash says the revenue from TCI, maybe some $500 million a year, would be set aside for climate-focused transportation investments: public transit, electric vehicles, and the like. The same can’t be said for the gas tax.
Getting TCI done has been a big priority for Baker. His energy and environmental affairs secretary, Katie Theoharides, chairs the regional initiative. Unlike in most of the 12 states at the table, the Baker administration can choose to adopt TCI without legislative approval. The gas tax, meanwhile, might be a tough sell on Beacon Hill, particularly in an election year.
No need to cajole state lawmakers for TCI. But Baker, Theoharides, and their team face a different kind of challenge: convincing peers in other states to hop on board. New Hampshire Governor Chris Sununu wasted no time proclaiming his distaste, calling TCI a “financial boondoggle.” Vermont Governor Phil Scott, another Republican, has expressed reservations in the past. And there are rumblings of discontent elsewhere.
Not everyone needs to join, but TCI’s success relies on achieving critical mass. The politics of getting enough states to agree could be tougher than simply passing a gas tax on Beacon Hill — and that’s saying something. At least Baker knows business leaders have his back on this, on his home turf.