Deadline coming on Maine’s decision to participate in new gas tax scheme


Maine Policy Institute and a coalition of 17 other organizations sent letters to their respective governors this week urging them to reject participation in the Transportation and Climate Initiative (TCI). The TCI is a cap and trade style program that seeks to reduce transportation-related carbon dioxide emissions in 12 mid-Atlantic and New England states by significantly increasing the cost of gasoline and diesel fuel.

The initiative would set an artificial cap on carbon emissions in the transportation sector and force fuel suppliers to purchase allowances for the carbon emitted by their fuel products. The cost of the allowances would increase regularly with the intent of discouraging, and eventually eliminating, the use of fossil fuels in motor vehicles.

The TCI is essentially a carbon tax being implemented through a gas tax. However, unlike the gas taxes imposed to pay for transportation infrastructure (a reasonable fee for use), the TCI amounts to a “sin tax” – a penalty for engaging in the “bad behavior” of driving a motor vehicle powered by fossil fuels – and the revenues raised couldn’t be used to plug the gap in Maine’s $232 million transportation funding shortfall.

Gas taxes are among the most regressive forms of taxation. Under the scheme, the costs imposed on fuel suppliers would be passed onto consumers in the form of increased gas and diesel prices at the pump, hurting low-income Mainers the most. The initiative attempts to force consumers into transitioning to electric vehicles and mass transit options. However, electric vehicles remain unaffordable for the average Mainer and the rural character of our state makes the transition impractical.

The TCI released its first memorandum of understanding (MOU) in December 2019 and is set to release its next MOU sometime this fall. The 12 states eligible to join the TCI are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont and Virginia.

New Hampshire Gov. Chris Sununu rejected his state’s membership in the program in December 2019, calling it a “financial boondoggle”, and elected officials in other states have signaled skepticism of the initiative. Maine Gov. Janet Mills said on WGAN earlier this year that a new gas tax is not something she wants to “glom onto”, but she has not stated definitively whether she intends to enter Maine into the agreement. She will have to make a decision when the TCI finishes and releases its final MOU.

The full coalition letter can be read here.  


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