“The TCI Gas Tax is Bad for Businesses and Families” – Mike Stenhouse

By Mike Stenhouse, CEO, Rhode Island Center for Freedom & Prosperity

Since our Center has brought this issue to light, every small business owner and executive in Rhode Island I have spoken with expressed their opposition to the interstate compact known as the Transportation and Climate Initiative (TCI), a carbon tax “cap and trade” proposal designed by climate-alarmists to reduce CO2 emissions from fossil motor fuel use.

With Governor Raimondo openly supporting it, the stated purpose behind TCI is to artificially raise the cost of transportation fuel to a level high enough to meaningfully discourage people and businesses from using it. This is anathema to the business community. Already with one of the worst climates for conducting business in the entire nation, advancing this climate-alarmist agenda, will only make matters worse.

Rhode Island’s job producers are currently taxed, tolled, and regulated to the breaking point. Yet, the TCI Tax supporters seem be ignoring the negative cost-vs-benefit result that will be produced by purposefully raising the cost of gasoline.

The TCI Gas Tax will mean that small businesses with itinerant employees, that transport goods, or that provide services will have higher operating costs. As with other anti-growth energy mandates, the increased costs of this TCI Tax could force them to reduce worker hours, layoff employees, or worse, shut down or move to another state. Economically speaking, this is bad policy.

Motorists like you and me will have to pay more at the pump to fund this TCI program that will not provide any environmental benefit, and, in the end, will have no effect on global warming. Those increased gas prices will ultimately be passed along to consumers in a variety of ways that will raise the prices hundreds of food items and other products. Again, bad economic policy.

Also, keep in mind that gasoline taxes are highly regressive. The TCI Tax will hurt lower income and rural residents much more significantly than their higher income, urban peers. Since motor fuels are economically “inelastic”, these higher costs to users will have to come out of other areas of household budgets, leading to some very difficult – and totally unnecessary – hard choices for people already struggling to make ends meet. Morally speaking, the TCI Gas Tax is just cruel.

But, unlike reasonable motor fuel taxes to pay for transportation infrastructure, the TCI Gas Tax would be the equivalent of a “sin tax” – a penalty for engaging in bad behavior. I do not believe that driving to work, driving for work, transporting children to school, transporting goods, going to the grocery store, visiting family, and the other necessary activities that generally require a vehicle should be treated by governments as a sin.

Further, the TCI Tax could also put upward pressure on commercial and residential property taxes, increasing municipal budgets with snowplows, school buses, and garbage trucks that require fuel to operate.  

Rhode Island already participates in another multi-state energy compact, the Regional Greenhouse Gas Initiative (RGGI). RGGI has increased electricity costs but has produced zero environmental benefit. Now, by adding another significant burden – this TCI Gas Tax – to these already over-taxed families and businesses …is neither desirable nor fair.

Please understand that, at its core, TCI is a flawed concept that is fundamentally regressive, economically damaging, and places an unnecessary financial burden on businesses and people who can least afford it.

We all want a clean environment. And as the RI Center for Freedom & Prosperity pointed out in its TCI Policy Brief, there are other ways to reduce transportation greenhouse gas emissions without causing economic harm. This policy brief and other related information can be found on our website: www.RIFreedom.org/NoTCITax. We ask that you learn all you can about the failures of RGGI and likely pitfalls of TCI.

Why should any business or resident be forced to pay higher gasoline prices when it has no corresponding environmental benefit?

Small businesses in the Ocean State should take action and petition the Governor and lawmakers to reject the TCI Gas Tax program and the related TCI-enabling legislation that is expected later this spring.

Mike Stenhouse, who earned an economics degree from Harvard University, is CEO for the nonpartisan RI Center for Freedom & Prosperity, a nonprofit public policy think tank.