TCI looks a lot like a gas tax, but is it?

Gov. Charlie Baker’s Transportation Climate Initiative looks a lot like a tax, but in legal terms it’s not.

The Transportation Climate Initiative, or TCI, would require automobile fuel distributors in states from Maine to Virginia to buy pollution allowances for the carbon dioxide their products generate. The initiative would cap the number of allowances, and ratchet the cap down over time.

The expectation of policymakers is that the cost of the allowances will be passed along to drivers at the gas pump, incentivizing them to use less, and the allowance money will be divvied up among the states and used to support public transit and deal with climate change. Baker wants to use half of Massachusetts’ share of the money to help pay for his $18 billion transportation bond bill, which includes major investments in the MBTA.

Boston Herald columnist Howie Carr thinks it’s a big charade. “Tall Deval and his minions call it a T.C.I., but what it really is is a T.A.X. – a gasoline tax,” he writes.

Rep. William Straus, the cochair of the Legislature’s Transportation Committee, described TCI this way: “All states raise their gas tax the same amount at the same time and agree not to call it a gas tax, but I think the public is smarter than that.”

At a hearing on the bond bill this week, Transportation Secretary Stephanie Pollack acknowledged TCI will probably lead to higher gas prices, but she took issue with those who are calling it a tax. “It is not a gas tax,” she said. “It is a cap-and-invest program.”

The distinction is important politically and legislatively. Baker is an opponent of new broad-based taxes, so even if TCI acts a lot like a gas tax he can advocate for it with a straight face by calling it a cap-and-invest program.

Baker can also implement TCI by executive order. Under the authority of the Global Warming Solutions Act, the governor is authorized to take steps to meet the state’s carbon emission goals. One of the possible initiatives envisioned by the law is a “market-based compliance mechanism,” which is what TCI’s cap-and-invest program is.

Kathleen Theoharides, the governor’s secretary of energy and environmental affairs, said there are a couple of key differences between a gas tax and TCI. She said a gas tax is assessed right at the pump and paid directly by the consumer. TCI, by contrast, is assessed on the wholesale fuel distributor who may or may not pass it along to the customer.

The other major difference, Theoharides says, is that the money raised by the sale of the allowances is funneled into initiatives that would allow consumers to avoid any higher costs at the pump. Possible initiatives include improvements in public transit or financial incentives making it easier to shift to electric vehicles and avoid buying gas all together.

TCI is not the first market-based compliance mechanism to be tried by states in the northeast. The Regional Greenhouse Gas Initiative, which requires power generators to purchase allowances for the pollution their products generate, was launched in 2014. The money paid by power generators for their allowances is used to promote energy efficiency efforts, which can allow homeowners to reduce their electricity usage and thus avoid any price increases on their bill due to the original purchase of the allowances.

Sen. Marc Pacheco of Taunton said he believes the point of TCI is not to drive up the price of gasoline but to raise money to combat climate change. He also noted challenges to the market-based compliance mechanism approach have been rejected by the Supreme Judicial Court

This debate over TCI is not likely to fade away. Laurie Belsito, legislative director of the conservative Mass Fiscal Alliance, sent a letter to Baker on Thursday raising concern that such a “far-reaching tax” could be implemented without a vote of the Legislature.

“Make no mistake: this is a very slippery slope for Massachusetts,” she wrote. “Although this is still in the early stages, lawmakers from other states in the TCI agreement are seeking legislative approval. Your administration, whether legally required or not, should also act in good faith and seek the same.”

BRUCE MOHL


BEACON HILL

The state’s inspector general is moving in and providing oversight of the Merit Rating Board, a division  of the Registry of Motor Vehicles. (MassLive)

MUNICIPAL MATTERS

Herald News has a photo essay on Fall River Mayor Jasiel Correia II’s career, noting that where he’s gone, drama has followed. 

WASHINGTON/NATIONAL/INTERNATIONAL

Two associates of President Trump’s lawyer Rudoph Guiliani, who helped with Trump’s effort to dig up dirt on political opponents in Ukraine, were arrested on campaign finance violations at Dulles International Airport as they were about to board a flight for Europe with one-way tickets. (New York Times

Celtics center Enes Kanter pens an op-ed declaring he will continue to speak out about the authoritarian leader of his native Turkey. (Boston Globe)

Will Mitt Romney, the master of equivocation and flip-flopping, draw a hard line on Trump and stick with it? (American Prospect

ELECTIONS

US Senate candidate Shannon Liss-Riordan, who has earned big bucks suing huge companies on behalf of low-wage workers, has loaned her campaign $3 million and says she may add more to that total. (Boston Globe

US Rep. Richard Neal disses his opponent, Holyoke Mayor Alex Morse, for his latest fundraising effort. (MassLive)

BUSINESS/ECONOMY

The Dorchester nonprofit that lost its contract for maintenance services on the Rose Fitzgerald Kennedy Greenway has filed a complaint with the state alleging the park organization is discriminated against its disabled workers. (Boston Globe)

Related Beal unveiled plans for three buildings and park space on the 6.5-acre parcel it recently acquired adjacent to Gillette’s World Shaving Headquarters along the Fort Point Channel. (Boston Globe

Pittsfield welcomes Wayfair’s new customer service center and gives a special shoutout to CEO Niraj Shah, who use to live there (Berkshire Eagle)

EDUCATION

Herald columnist Jessica Heslam says the PBS children’s show “Sesame Street” crossed the line by introducing a new muppet character whose parents are in recovery from addiction. “We’re all concerned about the drug crisis, but do we really need to bombard toddlers with it along with their ABCs?” she writes.

HEALTH/HEALTH CARE

Massachusetts hospitals and doctors say new regulations that took effect in July, including those requiring them to document every time a physician enters or leaves an operating room, are too onerous and they’re asking the Baker administration to ease them. (Boston Globe)

An 8-year-old Colorado girl suffering from a fatal genetic disease is the first recipient of a life-saving drug that was designed solely to treat her condition. (WBUR)

Signature Healthcare CEO Kim Hollon says high insurance premiums and out of pocket costs can cause people to delay seeking care. (Brockton Enterprise) 

ARTS/CULTURE

The Department of Children and Families and the Massachusetts Cultural Council — two agencies that would seem to have very little in common — have launched a pilot program with the goal of using art to make supervised meetings between foster children and family members living in separate homes more enjoyable.(CommonWealth)

Library cardholders from across the Merrimack Valley Library Consortium recently surpassed 2 million checkouts of e-books and other digital resources — a major milestone for the 36-member library collaborative. (Lowell Sun)

ENERGY/ENVIRONMENT

Emily Norton and Vernon K. Walker push the idea of bringing nature back into our built environment to deal with climate change. (CommonWealth)

CRIMINAL JUSTICE/COURTS

The state’s backlog of outstanding arrest warrants is getting really big. (Salem News)

Attorney General Maura Healey’s office announced a woman considered responsible for the bankruptcy of Harbor Hill at Provincetown has pleaded guilty to a charge related to embezzlement of more than $1.8 million from the former timeshare resort. (Cape Cod Times) 

Federal immigration authorities appear before US District Court Judge Mark Wolf to explain why they are detaining unauthorized immigrants who are seeking permanent legal status in the country. (Boston Globe)

Norfolk County District Attorney Michael Morrissey is backing legislation that would expand the opportunity to have youthful offenses wiped off criminal records. (Patriot Ledger) 

MEDIA

Local news experiment WHAV in Haverhill may fall victim to economic woes. (Media Nation)

PASSINGS

Bill McGonagle, who grew up in South Boston public housing and went on to earn universal praise while running the Boston Housing Authority, died at age 67, just three months after retiring. (Boston Globe)