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Governors of Connecticut, Massachusetts and Rhode Island back away from TCI, effectively killing regional gas tax

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The governors of Connecticut, Massachusetts and Rhode Island withdrew their support from the Transportation Climate Initiative (TCI) last week, effectively killing the plan in 2021. The possibility remains that the regional agreement is revisited in the future, but without at least three participating jurisdictions, the TCI will not take effect in the current calendar year. Washington, D.C. remains the only active participant in the formerly regional agreement.

The TCI began in 2010 with a Declaration of Intent signed by 11 states plus Washington, D.C. Its goal was to create a regional compact of states that shared a goal of reducing carbon emissions from the transportation sector. The TCI would have accomplished this by using a cap and trade system to charge fuel distributors for each pound of carbon burned by the fuels they sell. The cap on emissions would have declined over time, reducing the amount of carbon emitted within the transportation sector by each participating state. 

But only Massachusetts, Connecticut, Rhode Island, and Washington, D.C. signed onto the Transportation and Climate Initiative Program (TCI-P) Memorandum of Understanding in December 2020. In the accompanying memorandum, the governors of the three New England states and the mayor of the District of Columbia pledged to establish a multi-jurisdictional program to reduce carbon emissions and commit $300 million per year to clean transportation initiatives. Eight other states signed a statement of support.

The first compliance period would have begun on January 1, 2023 and required each of the signatories to reduce their levels of carbon emissions by at least 30% in 2032, or when three jurisdictions had completed the legal processes required to implement the TCI-P program.

Connecticut Gov. Ned Lamont announced on November 16 that he would no longer support the TCI. Critics in the state had previously argued it would lead to an increase in gas prices. Lamont cited gas prices as his reasoning for walking away from the initiative, saying he had supported it in the past when gas prices were historically low.

“It’s probably not the year to do it this year with gas prices where they are,” Gov. Lamont said.

Connecticut requires multi-state compacts to be approved by the legislature and the TCI was originally slated to be included in the biennial state budget, which the legislature voted on in June. But negotiations with lawmakers were ultimately unsuccessful, and Lamont was unable to work the initiative into the final budget. At the time, Lamont indicated he hoped to revisit the TCI in 2022. 

Two days after Connecticut withdrew from the TCI, Massachusetts Gov. Charlie Baker announced his state would be withdrawing as well. 

On November 18, Baker, who did not need to secure legislative approval to enter the TCI, called the initiative “no longer the best solution” for his state. He said his administration’s position had always been that Massachusetts would only move forward with the TCI if multiple states committed. Once Connecticut withdrew, that was also the case for the Bay State. 

Terry MacCormack, Baker’s press secretary, further noted that a statewide tax revenue surplus and money the state will be receiving from the infrastructure bill recently passed by Congress and signed into law by President Biden leave Massachusetts in a position to take other steps to invest in other programs to reduce emissions.

Opponents of the TCI in Massachusetts sought a citizens’ petition in August that, if successful, would appear on the November 2022 ballot. The proposed question would change Massachusetts law to prevent the supply of fuel to be reduced or restricted by taxes or fees. If passed, it would make it impossible for Massachusetts to join the TCI at any point in the future.

Rhode Island was the final state to withdraw from the TCI. Just a day after Gov. Daniel McKee reaffirmed the state’s commitment to the initiative, McKee reversed his position and announced on November 20 that Rhode Island was also withdrawing from the initiative.

Terrence Gray, the acting director of the state’s Department of Environmental Management, released a statement on behalf of the governor and cited the provision within the TCI-P that requires the participation of three jurisdictions to move forward as the reason Rhode Island was withdrawing.

During its 2021 legislative session, Rhode Island’s General Assembly considered a bill that would have enacted the TCI. While the bill passed the Senate, the state House of Representatives adjourned for the year before taking a vote on the legislation.

About Katherine Revello

Katherine Revello is a reporter for The Maine Wire. She has degrees in journalism and political science from the University of Maine. Her writing has appeared in Reason, The Washington Examiner, and various other publications. Got news tips? Contact Katherine at krevello@mainepolicy.org.

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