Cabinet Officers: Assembly Decides on Carbon Tax

Delegate Poindexter

By Steve Haner

Thanks to the persistence of Del. Charles Poindexter, two members of Governor Ralph Northam’s cabinet are now on record stating the General Assembly will decide whether Virginia joins the carbon tax regime called the Transportation and Climate Initiative. In 2018 both of them had signed a letter endorsing the interstate compact to reduce the use of gasoline and diesel fuel for transportation.

The Franklin County Republican was addressed by Secretary of Natural Resources Matt Strickler in a meeting of a House Labor and Commerce Committee subcommittee January 30, and Strickler dismissed Poindexter’s use of the word rationing to describe TCI. “I’m not sure where the idea of rationing comes from. I think that’s pretty hyperbolic language,” he scoffed. 

“The idea of rationing” came from TCI’s own framework document issued in October and draft memorandum of understanding released  in December, which explicitly describe plans to reduce the amount of fuel available year after year after year (leaving the rate of decline to be determined). The word rationing, or restricting the consumption of a commodity, exactly describes what TCI will do to fuel.

The organizers also reported that to achieve a 25% reduction of fuel use in the regional compact’s territory, fuel wholesalers would face carbon allowance costs that would be the equivalent of another 17 cents on the gas tax. “I’m not familiar with that those studies” was Strickler’s response in another forum where that came up.

Poindexter next asked Secretary of Transportation Shannon Valentine about TCI on February 3, during a meeting of the House Finance Committee that was considering Northam’s multi-billion-dollar transportation funding package. Given that the governor seeks to raise taxes on fuel for roads, rail and transit, it was fair to ask about any future plans to then rapidly shrink use of those fuels, and the taxes they generate.

Valentine responded TCI is merely “a willingness to explore options on how we could be more deliberate in our environmental stewardship.” The state would have to join a multi-state agreement yet to be written, and “you all would have an opportunity to weigh in before that would ever happen,” she said.

This proposed tax and rationing scheme for fossil fuels is an inconvenient talking point as Northam pushes forward with the largest transportation tax increase in the Commonwealth’s history. His bill would almost double the existing motor fuel tax, from 16 to 28 cents. In three parts of Virginia – Hampton Roads, Northern Virginia and the I-81 Corridor – an additional 7.6 cents is now assessed, so the gasoline tax there would rise to almost 36 cents per gallon.

Another pending bill, approved in the Senate Finance and Appropriations Committee February 4 – turns that regional tax into a statewide levy of at least 6 cents more in every jurisdiction not yet hit with a regional tax. With the state and its regions growing in dependence on fuel taxes, the imposition and success of TCI over coming decades will erode that revenue as well.

The Northam Administration and its environmental allies clearly want to avoid that discussion at this time. No decisions have been made on TCI, Stricker said January 30, and in the earlier discussion. “It’s a conversation, it’s not a regulation, not something that is binding on the Commonwealth, it is something that is being considered,” he said.

Yet, Strickler had come to that committee that night to kill a bill introduced by Poindexter. His House Bill 1629, eventually defeated by the majority Democrats on the committee, sought exactly what Strickler and Valentine said is a given: A final decision on TCI made solely by the legislature. After Strickler downplayed the significance of TCI, a series of environmental group lobbyists went to the podium to praise it as an environmental boon and speak against Poindexter’s bill.

This is coming, Virginia. Once the 2020 gas tax bill is passed and signed, attention will return to TCI. Fuel taxes in excess of 50 cents per gallon may be only a couple of years away. It won’t be the first Virginia carbon tax, after all.

The same subcommittee that night confirmed Virginia’s participation in the related Regional Greenhouse Gas Initiative, a compact that includes most of the same states, from Virginia to Maine. It imposes a carbon tax on all the fossil fuels (coal, natural gas, biomass) used to generate electricity in Virginia. House Bill 981, not yet considered on the full House floor, directs how those carbon tax dollars will be spent once they start to flow later this year.

Half of the money will be given to the Department of Housing and Community Development to spend on “low-income energy efficiency programs” and 45% to the Virginia Community Flood Preparedness Fund, successor and an expansion upon the previous Virginia Shoreline Resiliency Fund. Apparently inland flood mitigation projects will also be eligible. How much money is expected? The bill was not accompanied by a fiscal impact statement, and nobody asked.

When the Transportation and Climate Initiative kicks in, and if the other states stand firm Virginia is likely to be among them, a similar and probably larger annual stream of revenue will be produced for other environmental-related spending, or for investment in non-fossil fuel vehicles. The thirst for money alone will produce immense pressure on the 2021 General Assembly to adopt it.

This first appeared in the Thomas Jefferson Institute for Public Policy’s Jefferson Journal. 

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27 responses to “Cabinet Officers: Assembly Decides on Carbon Tax

  1. re: ” “The idea of rationing” came from TCI’s own framework document issued in October and draft memorandum of understanding released in December, which explicitly describe plans to reduce the amount of fuel available year after year after year (leaving the rate of decline to be determined). The word rationing, or restricting the consumption of a commodity, exactly describes what TCI will do to fuel. ”

    How about providing selected extracts from the document itself that confirm what is being claimed here?

    • From the December draft MOU:

      D. Regional Emissions Cap. An initial regional base annual CO2 emissions cap for the first year of the TCI Program will be set in the final MOU. The Model Rule shall reflect a regional base annual CO2 emissions budget for each year of the program; each Participating Jurisdiction’s individual emission budget will be based on its apportionment of the regional cap for each year of the TCI Program, and the regional annual limits, called the regional base annual CO2 emissions budget, shall decline over time in order to reduce the amount of CO2 emissions from the Affected Fuel covered by the TCI Program.

      Plus I sat in on the December webinar, where it was clear that there would be annual declines, but the rate of decline would be part of the final MOU discussions. No point in doing this if the amount of fuel being burned doesn’t go down! RGGI is rationing and so is TCI. They had modeled a 25% reduction over ten years and estimated the allowance cost that would motivate that, which THEY translated into 17 cents per gallon, not me. Some of the advocates delude themselves that the wholesalers won’t pass the cost along, but of course they will.

  2. re: ” regional base annual CO2 emissions budget, shall decline over time in order to reduce the amount of CO2 emissions from the Affected Fuel covered by the TCI Program.”

    but this says to reduce EMISSIONS , right?

    is that the same as rationing or is the idea of rationing, TJIs interpretation ?

    No, I do not expect to see the actual term “rationing” in the document or other material, but how do you and TJI make that determination?

    couldn’t emissions be reduced in other ways also?

  3. Sorry – there seems to be some separation between hyperbole and some version of the truth.

    And we need you and folks like TGI to “represent” the brain of Conservative types who sometimes prefer hyperbole and drama to deal with issues they are in agnst about.

    Part of this boils down to how people feel about climate change and what we should do to reduce fossil fuel emissions – and those who do not believe that we have a problem and anything we do in response will be harmful.

    When I look at all the other states that are supportive of this initiative, I also see voters who would presumably vote out of office those that they felt did not represent their wishes and I’m not seeing that at least yet.

    Danger Danger Will Robinson type narratives keep emanating from the right – from right-leaning groups like TJI and it’s hard to take them seriously sometimes when they are so far out of step with folks to their left – which includes the middle.

  4. The average working class Virginian simply has no idea of what is coming down the pike (is there a toll for using the word pike too?). With TCI and RGGI, why would anyone operate a trucking business, a distribution center, or work a job that requires a lengthy drive? Is this even legal? I thought Congress was the only entity empowered to regulate interstate commerce. Energy is a commodity exchanged between the states. I thought John Marshall made all of this crystal clear in Gibbons v. Ogden. The typical household income in Warren County Virginia is about 50 grand a year. Can anyone tell me the additional tax burden these hard working folks are going to have to bear? I am not a math man, but my crude calculations tell me to be prepared to pay a thousand dollars a year in extra fuel/energy costs just to get to work and back. Would Mr. Northam come on down to the Happy Creek Meeting House to try and explain this complex scheme to the working class that are busy pulling the wagon and raising families?

    • But John, you just don’t understand. The solution to your problems is easy. Just promise to vote for Blackface, sell your soul and your family to Blackface, that is all you need to do, and if you do, he will give you tons of other people’s money stolen from everyone else in Virginia who have not promised to sell themselves and their family to Blackface.

      But remember in the end everybody in Virginia gets screwed save for Backface and his band of thieves when all the money of other people in Virginia runs out, because by then Blackface and this thieves will be long gone, to Florida, most likely.

      Don’t believe me. Well, look again. And think about it. It’s been happening in Virginia again and again since the 1970s. Take Fairfax for example. Where all the folks who got rich there go, after the mess they made, and left behind?

  5. Steve –

    Your post here is one of the finest I have read anywhere. It brings the details of what is happening in Virginia’s General Assembly vividly alive. It gives those detail great meaning as to Virginia’s present and future.

    Take for example this sample:

    “The Franklin County Republican was addressed by Secretary of Natural Resources Matt Strickler in a meeting of a House Labor and Commerce Committee subcommittee January 30, and Strickler dismissed Poindexter’s use of the word rationing to describe TCI. “I’m not sure where the idea of rationing comes from. I think that’s pretty hyperbolic language,” he scoffed.

    “The idea of rationing” came from TCI’s own framework document issued in October and draft memorandum of understanding released in December, which explicitly describe plans …”

    “Poindexter next asked Secretary of Transportation Shannon Valentine about TCI on February 3, during () House Finance Committee that was considering Northam’s multi-billion-dollar transportation funding package (that) seeks to raise taxes on fuel for roads, rail and transit, (s0)it was fair to ask about any future plans to then rapidly shrink use of those fuels, and the taxes they generate.

    Valentine responded TCI is merely “a willingness to explore options on how we could be more deliberate in our environmental stewardship.” The state would have to join a multi-state agreement yet to be written, and “you all would have an opportunity to weigh in before that would ever happen,” she said …”

    “This proposed tax and rationing scheme for fossil fuels is an inconvenient talking point as Northam pushes forward with the largest transportation tax increase in the Commonwealth’s history. His bill would almost double the existing motor fuel tax, from 16 to 28 cents. In three parts of Virginia – Hampton Roads, Northern Virginia and the I-81 Corridor – an additional 7.6 cents is now assessed, so the gasoline tax there would rise to almost 36 cents per gallon.

    Another pending bill, approved in the Senate Finance and Appropriations Committee February 4 – turns that regional tax into a statewide levy of at least 6 cents more in every jurisdiction not yet hit with a regional tax. …”

    Steve, what your fine post tells me, among many other things, including the great harm that is about to be done by this government, is that the mendacity and deception at work by this Blackface Administration is stunning and breathtaking. In my view, the legitimacy of this government is gone.

    In that regard recall my earlier comment:

    “This respect by the government of the citizen was sacred. The Roman’s called it Libertas, the liberty reserved to each individual Roman citizen. The demanded respect and restraint here by Government was the “seedbed of the state,” the base on its legitimacy rested. All obligation of the citizen to this government rested on his governments respect of his Libertas. Without it, the government’s right to govern him floundered and collapsed.

    Cicero’s central insight was so admired by our founders that they laid it down into a central cornerstone of our Federal Constitution. And they never tired of reminding themselves that what they’d built required the steadfast virtue of its citizens and their eternal vigilance. “Yes, Madam,” Benjamin Franklin explained, “you have a Republic if you can keep it.”

    And again, Cicero was the founders guide as to the essential virtue of government officials and those exercising high political power by rhetoric. Central to those obligations was the demand that the politician confront and deal truthfully with the particular facts of the issue at hand, instead of mouthing universal propositions. And these politicians in their Rhetoric had to deal with future probabilities of a proposed act or law rather than abstract numbers and certainties as if politics were science, which it is not.

    Thus the honest politician had to explain by logic organized on facts, while excluding altogether false reasoning, tawdry emotion, sentimentality, scare tactics, falsehoods, and other cheap psychological and emotional tricks that diverted his audience from the truth that grounded the matter at issue. To do otherwise was to undermine the very foundation of government itself.

    Why? Because only the well organized presentation of facts allows the citizen the means to reach his own informed judgement. Only then can he rightfully participate in and reap the fruits of his own aspirations in government. Only then can he cast his vote or give informed consent to a law or act that achieves the good as he envisions it. Only then can he avoid evil as he envisions it being foisted on him by the deceit of another.

    So this truth telling by politicians in government is absolutely critical. A politician’s lies steal government from it rightful owners, the citizens. A politician’s lies erode and destroy the bedrock of representative government, namely its laws, and the irrefutable legitimacy of those laws.”

    For more see:
    https://www.baconsrebellion.com/wp/no-nigel-vexit-is-not-a-good-idea/

    • That is the single biggest change I have observed over four decades, and it is not limited to one party. When I started (perhaps I was naive) their word was usually good, if you could pin them down. They might dodge, but if you got an answer or a pledge, you could trust it. Far less true now.

  6. Clearly fossil fuel use is an area of red meat political fight in the USA, and if you ask me, one of the main reasons why Dems lost to Trump. Many scientists and engineers that I know from various fields are not buying the armageddon hype and hate talk. Some do indeed buy it.

    Lot’s of reasonable people even perhaps some fossil fuel cos. agree with some level of carbon tax, and using that for alternate energy. including making the carbon tax less harmful to lower incomes. Fossil fuels probably cannot by themselves keep up with global population growth and energy growth as the third world modernizes, and if even fossil fuels could keep up with demand, supplies could be dwindling before long.

    But extremism sounds like trouble to me. Larry Sabato recently asked on Twitter (re: current politics) how can USA survive like this? with the bitter divide? I am a little worried about that to be honest.

  7. We’re divided for sure and each side – the extremes are operating as if when they win they will impose what they want rather than work to the middle.

    Name-calling is one way to identify the extremes in my view.

    If this is a terrible as some say, one has to conclude that either the northeastern states are all extremists or asleep at the swtich and will wake up enraged when it hits home.

    But I’ll also say this. In Virginia, the GOP pretty much did the same when they gave away the store to Dominion – and the supposedly screwed-over ratepayers seem to be oblivious.

    I think we’re headed for somewhere in the middle on this.

    If we’re not the Dems will turn it back over to the GOP – again.

    who are voters blaming for things like Health insurance and prescription drugs? The Dems?

  8. I agree with Larry on this one. People usually associate the term “rationing” with a limitation on the amount of a commodity one can buy, such as one pound of sugar a month, or five pounds of flour, etc. No one is suggesting that people will be limited to a set number of gallons of gas per month, regulated by ration cards. If you want to buy 500 gallons of gas per month, you will be able to buy it; you will just have to pay more for it.

    Most economists, liberal and conservative, seem to agree that the most efficient way to reduce carbon emissions is to tax it. As it becomes more expensive, people will find or create alternatives–more fuel efficient vehicles, electric vehicles, etc. This is using the market to achieve environmental goals. The emissions will be reduced not by outright limits how much fossil fuel an individual can buy, but by increasing the price so that less will be used.

    Reasonable folks can disagree on the most appropriate uses for the revenues derived from the tax. That is where the attention should be focused.

    I have been following the transportation bill. In neither the House Finance or Appropriation Committees did any Republicans voice any opposition to the new taxes included in the bill. They asked questions about the registration fees, the safety measures, and the annual vehicle inspections. As for additional transportation revenue, they wanted to make sure they were getting some of that revenue for the completion of the Rt. 58 project and the Coalfields Expressway. With their silence, they accepted the administration’s premise that additional revenue for transportation projects is needed.

    As for whether the Northam administration is telling the truth, it is too early to be making accusations. I was there in the Finance Committee meeting and heard Secretary Valentine say that the General Assembly would be involved. (Besides, I am not sure a state can join an interstate compact without the legislature agreeing.) So, we should wait until next year. If they go back on their word then, that would be the time to start calling them liars.

    • You can set a commodity ration for an individual or for a state. Same deal. TCI rations the amount of fuel available in the state. That amount shrinks year to year. Because it’s a regional set up, New York wholesalers could outbid Virginia wholesalers and cut our supply further, but it surely is rationing.

      • “TCI rations the amount of fuel available in the state.”

        is that really true? They can limit the amount of fuel a state can have brought in?

        • Exactamundo, Larry. That is what you are blindly endorsing. A massive expansion of government power.

          • “A massive expansion of government power” if it were exactly true…. and not some super silly stuff coming from alarmist types!

            How does a mutli-state regional” compact become a Federal expansion of power?

            Who is actually going to be in charge of monitoring fuel deliveries and issuing “stop delivering” orders? The Federal
            govt? Trump?

            This is funny.

        • how would that actually stop fuel shipments?

          Who would be monitoring fuel shipments to the state ?

          there’s some basic info missing here.. band I smell a mouse..

          • You can’t wrap your head around what the STATE is proposing to do, but fuel wholesalers are licensed by somebody and that’s the lever for enforcement. The reporting structure already exists for current fuel taxes. The….fuel….supply…will….shrink. That’s a big fat rat you smell.

          • Reed Fawell 3rd

            Yes, and that big fat rat stinks, because under these contrived regimes something bad always goes wrong and ripples our wildly in unexpected, unforeseen more bad ways, always. The world is far too complex and hard and unknowable enough without us concocting artificial shortages, regimes & pricing nonsense. We’re not God.

            Here we don’t even what the problem is. In fact, the one thing we should be sure of is that the real problem lies in ourselves, people so empty that we chase illusive false meanings, faux religions, anything to make us feel better, get richer ourselves or simply let us grab levers to control other people, limit and constrain others, thus empower ourselves.

      • This is not a good thing. There is no proposal for the Federal govt to ration fuel. None. This is someone taking what the TCI folks are saying and “interpreting” it in a tortured way to claim that it means rationing.

        Just not even close to being true.

        Why do Conservative types do this these days? It’s just plain misinformation. It’s becoming a “sport”!

        😉

    • Steve, I beg to differ, at least as to RGGI. RGGI sets a cap on emissions allowances over the entire RGGI region on the assumption that each State will stick to its own committed schedule of reductions in greenhouse emissions (and commensurate increases in renewables generation), and it creates a trading system for those with allowances in excess of need to sell to those without. The total of allowances results from rather than drives the total regional greenhouse emissions distributed to the participants. If the auction price of allowances goes higher than a set amount (due to, let’s say, NY buyers outbidding Virginia’s due to a temporary shortage), there’s an “Emissions Containment Reserve” that kicks in additional allowances, without limit, at that fixed higher price. See: https://www.rggi.org/program-overview-and-design/elements

      The bottom line is, the driving force under RGGI is the price of allowances (particularly the price if allowances are scarcer than forecast), not an artificial absolute cap on their amount. If that Emissions Containment Reserve” (ECR) gets triggered by extremely high auction prices, the RGGI contract is supposed to trigger a regional reassessment of the allowance levels to see why there’s an imbalance between the total RGGI regional cap on allowances and the total need for allowances, and to fix the imbalance. The only way there could be an imbalance is because one or more States is not reducing its greenhouse emissions according to its prior commitment, or because there is something extraordinary about, say, the weather (or a construction or retirement delay) that has made forecast emissions allowance requirements insufficient.

      I am less familiar with how TCI works with fuel but my understanding is it’s the same sort of price-driven allocation.

      The price increment paid for allowances by those who need them is not going to make those people happy, but nobody is proposing to shut down electric generators because they can’t find any emissions allowances anywhere; there will always be some available to buy from the ECR. Meanwhile, those utilities who have allowances for sale will net a nice reward from sales at the high auction price.

      One of the difficulties with TCI is the lack of information; if you have a good reliable source, post a link to it, please.

      • Who was writing about RGGI? Not me. The TCI main website is linked in the first paragraph, and what they have put out is there….Trust me, they don’t understand how to do what they want to do, either.

  9. I told my good buddy Wild Man Bill about this after church on Sunday. He told me that back in the days of the energy crisis of the 1970s it was a local pastime to sneak around and siphon gas out of your neighbors gas tanks. I fully expect the rebirth of this popular bit of fun.

    • “He told me that back in the days of the energy crisis of the 1970s it was a local pastime to sneak around and siphon gas out of your neighbors gas tank.”

      Yea, remember it well. We got us a slew of big old Shell station underground tanks, and dug ’em into our soybean field in the back 40, then got our women folk out every morning at 1 am siphoning gas out of the tree hugger’s station wagons, Volvos and Beamers.

      And, whatta ya know, after few weeks of siphoning gas, that shortage spiraled right outta control, fighting tree-huggers spreading out from gas lines forty miles long into the fields, with us selling ’em them fools their own gas for $126 dollars a gallon out of our 10 gallon cans after the station price jumped from 25 cents to $165 bucks a gallon station price.

      But, thinking it ’bout now, it was definitely the right thing to do ’cause otherwise we’d be underwater by now with this global warming getting here before the turn into the new millennium at year 2000, had we not screwed all them tree-huggers on all that gas. Yes, Sir, for sure, we saved the world for ’em that way, best thing every that happened to those tree-huggers. Never understood why they got so angry, when suddenly we split town rich and been playing the horses and markets ever since, leaving the poor a church mice. But Life a beach us, thank’s to us cooking up the phony oil shortage.

      • No joke! He showed me the 50 gallon drums that he stored the fuel in. Still has them. You watch! When the price goes up this sort of nonsense will begin again.

  10. re: “stealing fuel from others”. I’m not sure ANY excuse justifies this including the idea that the govt did something you did not like so that means it’s okay to steal from others.

    I know for a fact, that there was theft going on in the 1970s gas shortage but most of us thought that those who resorted to stealing were little more than common criminals.

  11. re: ” You can’t wrap your head around what the STATE is proposing to do, but fuel wholesalers are licensed by somebody and that’s the lever for enforcement. The reporting structure already exists for current fuel taxes. The….fuel….supply…will….shrink. That’s a big fat rat you smell.”

    When you can tell me who licenses the fuel wholesalers and how the govt plans to enforce “rationing”, I might put more stock into this silly narrative.

    What TCI is offering is a voluntary framework – and as far as I can tell, it has nothing what-so-ever to do with the Federal Govt. And even with the states – where is the legislation in the Va Ga that says how the state itself will dictate to wholesalers how much they can buy and sell.

    This is all made-up stuff – just goofy stuff… by the chicken little folks.

    geeze Steve… this narrative walks and talks like some sort of conspiracy … where folks “suspect” that TCI has the evil ideas and somehow when no one is looking the Va Ga is going to slip this legislation through and Northam will sign it before anyone finds out!

    I’m just agog… there must be something in the water these days.

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