Does a $9 Billion Carbon Tax Get Your Attention?


The 2021 General Assembly is now six weeks away, with the holidays in between. We know no more about the coming Northam Administration proposal to impose a carbon tax and rationing scheme on our motor fuels than we did months ago. Keeping you uninformed may be part of the plan.

All we have is the Transportation and Climate Initiative organization’s own data and modeling, which are quite extensive.

The initial added tax per gallon of gasoline in Virginia could range from 17.5 cents to 28 cents per gallon, depending on which of the 25% reduction scenarios the still-unseen TCI memorandum of understanding uses. By 2032 the tax could range between 36 cents and 57 cents per gallon, TCI projects.

TCI modelers looked at three possible ten-year CO2 reduction goals (20%, 22% or 25%), and three possible combinations of spending plans for the resulting tens of billions of collected carbon tax dollars. One policy design spends most heavily on electric and low-emission vehicle subsidies, and other plans put more money towards mass transit and bike trails.

TCI’s model for a 25% reduction goal under one of the scenario options, showing carbon taxes of $22 up to $46 per ton and revenue of $65 billion over 10 years (2017 $).

You can find the nine variations here under “TCI Policy Cases.” I’ve posted one as an illustration. This Excel page is based on the 25% reduction goal. If you think CO2 is that dangerous a substance, why settle for the lower reduction target?

The different policy cases drive different carbon tax amounts per ton, from $17.90 to $28.49 for 2022. The carbon prices seem to be based on short tons, or 2,000 pounds, of CO2. It takes about 102 gallons of gasoline to emit a short ton of CO2, so the price per ton is merely divided by 102 to get the price per gallon.

The new taxes result in major revenue hauls in the 12 states and the District of Columbia. How much would come to Virginia is also a still unknown, but Virginia represents about 11% of the population within the region. If 11% of the tax hits Virginia, the initial carbon tax on Virginia drivers and businesses ranges from about $500 to $810 million in 2022. By 2032 under the most expensive scenario it may reach $1 billion.

That most expensive scenario, TCI projects, collects about $82 billion in taxes over the first ten years. That could be more than $9 billion from Virginians, close to $1,000 per capita. The middle scenario, the one illustrated above, would cost Virginians $7 billion over ten years. And those are in constant 2017 dollars (noted clearly on the table), meaning the current dollar cost will be far higher.

Again, these are not my numbers. They are their numbers from those case studies. If they have different numbers for their final proposal, they should show them now. At this point the best argument to reject the coming memorandum of understanding is it was held secret too long. But this may be played out just like last year’s Virginia Clean Economy Act, when the real bill didn’t appear until the last minute, and legislators can complain “I didn’t understand it!”

Odds are strong the carbon tax dollars will not be the focus as the Virginia League of Conservation Voters holds a web seminar next week on “Protecting Health Through Transportation” to “discuss the next big climate fight – decarbonizing the transportation sector.” Register for their December 8 program here.

“Panelists will be updating us on the recent findings surrounding the public health burden of pollution and how this disproportionately affects many communities. We’ll also hear about what we need to do in 2021 to address these issues including transitioning to electric vehicles, pushing for better public transportation infrastructure, and Virginia’s potential to switch to California Clean Car Standards.”

In a post a few weeks back it was noted that the Virginia Division of Motor Vehicles’ website was not transparent about the current fuel taxes in Virginia. In response, it is clearer now (thank you, DMV). The three elements of state tax you now pay on each gallon are listed together, but not totaled to report their combined cost. The retail tax, wholesale tax and a third tax to cover the tank inspection program add up to 29.4 cents per gallon. It is 28.5 cents per gallon on diesel.

Next July, that will go up to 34.4 cents per gallon on gasoline, as already dictated by the 2020 legislature. How much would membership in the Transportation and Climate Initiative compact add to that starting in January 2022? Nothing, if the General Assembly is wise enough to take a pass on putting that new burden on Virginians.

Regular readers will remember that the Northam Administration’s 2020 transportation tax package did not spark opposition from me or from the Thomas Jefferson Institute for Public Policy. I’ve been advocating that “cents-per-gallon” tax approach for decades and have also advocated for regular adjustments to keep up with inflation.

This carbon tax is different and should be rejected.

A version of this commentary originally appeared on December 3, 2020 in the online Bacon’s Rebellion blog.

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Don’t Let the Left “Steal” the General Assembly

Would you like to keep Virginia from drawing legislative districts skewed in favor of the Democrats — that is, prevent liberal gerrymandering? One way to fight such gerrymandering is to apply to be a citizen member of the Virginia Redistricting Commission, which will draw the boundaries of Virginia’s Congressional and state legislative districts. Virginia voters recently created the Commission in a state referendum, by passing a ballot initiative that was intended to prevent gerrymandering.

Applications can be submitted now and until just after Christmas. The application forms have just been posted on the Virginia Division of Legislative Services website and in order to be considered for selection as one of the eight citizen members of the Commission, you must submit an application by December 28. Three letters of recommendation are required to be submitted with each application.

Applicants must have been registered to vote in Virginia for the last three years and voted in two of the last three General Elections. Eligible applicants must not have ever held or run for partisan or political office, have been a lobbyist for the last five years, or have ever worked for the General Assembly or United States Congress. Career government employees are eligible.

If you don’t apply, or get fellow conservatives or non-progressives to apply, the redistricting commission may end up being dominated by progressives. That’s what happened in Arizona. Its redistricting commission ended up being effectively controlled by progressives, resulting in its Congressional districts being skewed in favor of Democrats.

Far from being neutral between the two political parties, Arizona’s “independent” redistricting commission proved to be a reliable ally of the Democratic party. For example, the commission gave Democratic votes more weight than Republican votes by packing more people into Republican-leaning districts than Democratic-leaning districts. At a time when Arizona was a mostly Republican state, and Republicans easily carried Arizona in presidential and U.S. senate elections, Arizona’s redistricting commission managed to draw Congressional districts for the U.S. House of Representatives in a way that resulted in five of Arizona’s nine representatives being Democrats. Truly random, nonpartisan redistricting would have led to fewer Democratic representatives in Arizona, especially given how Democratic voters tend to be heavily concentrated in urban areas (as polling expert Nate Silver has explained).

And as Chief Justice Roberts noted in a Supreme Court case,

The facts described in a recent opinion by a three-judge District Court detail the partisanship that has affected the [Arizona] Commission on issues ranging from staffing decisions to drawing the district lines. … The per curiam opinion explained that “partisanship played some role in the design of the map,” that “some of the commissioners were motivated in part in some of the linedrawing decisions by a desire to improve Democratic prospects in the affected districts,” and that the Commission retained a mapping consultant that “had worked for Democratic, independent, and nonpartisan campaigns, but no Republican campaigns.

If you have questions about the application process, or what information would be helpful to effectively serve on the commission, please email me with any questions at hfb138@yahoo.com (if you give me your phone number, I can discuss it with you by phone if you prefer).

A version of this commentary originally appeared on December 5, 2020 in the online Liberty Unyielding blog.

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Will Virginia Reject American Federalism?

During the 1788 New York ratification convention, anti-federalists opposed the new Constitution “for lack of a Bill of Rights”. Alexander Hamilton replied, “The Constitution is itself in every rational sense, and to every useful purpose, A BILL OF RIGHTS” (Federalist #84). Indeed, it was written to safeguard liberty against the worst form of tyranny, the tyranny of the majority about which Plato, Aristotle, and Montesquieu warned, as did Tocqueville five decades later.

The American Left (no longer worthy of the term “liberal”) has always chaffed against the Founders’’ “checks and balances” within Madison’s “compound republic” (Federalist #51). If the mission of the Left can be summarized, it is “Tear down every rafter in the Constitutional edifice until all the protections for minority rights and diversity of regions and political thought are gone.”

In 2006 wealthy Californians launched a cynical attempt to remove one of the load bearing pillars of our Constitution – the Electoral College – by way of a National Popular Vote Interstate Compact. They aim to convince state legislatures to enact their Compact until states representing 270 Electoral College votes sign on, the number needed to elect a President. Already 15 entirely “blue” states have enacted the Compact for a total of 196 Electoral votes. Now those Californians have convinced Sen. Adam Ebbin (D) and Del. Mark Levine (D) to advance their model legislation in the January 2021 legislative session in Richmond. There are five major reasons why this legislation must be defeated:

NPV COMPACT: A CONSTITUTIONAL ASSAULT

The NPV Compact is a Constitutional assault on three fronts. First, the State Compact Clause (Article I) reads “No state shall, without the consent of Congress, enter into any Compact with another state…” The NPV cabal has not sought Congressional approval for their illicit state Compact. Second, the NPV cabal has not attempted to use the Constitution’s amendment process to achieve their goal as they know 38 states will never agree to this radical change to how we elect our Presidents. Third, the Framers considered three other ways to elect our President – election by Congress, by state governors, and by a national popular vote. All three were rejected for an Electoral College, what is today a Presidential election in each of our 50 states. Once agreed in Philadelphia, 13 state ratifying conventions voted to adopt our Constitution as written, including an agreed amendment process. The manner of electing our President was a keystone in the document’s architecture, one that must not be altered absent agreement with the requisite 38 states. It was the states that created our Constitution, the Constitution did not create the states.

NPV COMPACT: CONTRARY TO THEIR OATH’S “SACRED PROMISE”

The dictionary defines an oath as “A solemn promise, often invoking a divine witness, regarding one’s future actions or behavior.” Members of the Virginia legislature and the Governor affirm this oath of office: “I do solemnly swear I will support the Constitution of the United States, and the Constitution of the Commonwealth of Virginia… to the best of my ability, so help me God.” The NPV Compact is an un-Constitutional state compact (its name alone confirms this), a cynical attempt to change the Constitution without the votes of 38 states.

Moreover, the Commonwealth Constitution provides that only Virginia residents are entitled to vote for Virginia’s elected officials. Yet the NPV Compact would mandate turning the votes of Virginians over to the voters of other states to decide for whom Virginia’s 13 Presidential Electors will cast their votes! Can Virginia legislators who support the NPV Compact legislation tell the citizens who elected them that they are living up to their oath of office?

NPV COMPACT: AN AFRONT TO THOSE THEY REPRESENT

A Virginia legislator or Governor who supports the NPV Compact defies the Constitution and offers a civic afront to the citizens of our state. They are saying, “Regardless of how the majority of Virginians vote, I favor allowing citizens of larger states to decide how our Electors shall vote – none of whom elected me, none of whom pay my salary, and to none of whom have I given an oath of office.”

NPV COMPACT: ONLY NORTHERN VIRGINIA WILL MATTER

The population of “Northern Virginia” has exploded along with the US government and the high-tech industry. Today NoVA accounts for 67% of the state’s population! If the NPV Compact were in place, future Presidential candidates would only visit major metropolises like New York, Miami, Houston, Chicago, LA County… and the DC metro area. Virginia legislators who favor the NPV Compact are saying to the rest of the state – “You will no longer matter.” Will downstate legislators and the Governor support this unlawful Compact and then explain this additional afront to those who elected them and pay their salaries?

NPV COMPACT: A FEDERAL GOVERNMENT TAKE-OVER OF PRESIDENTIAL ELECTIONS

In 2020 the vastly different and swiftly changing elections laws of our 50 states have whipsawed our national elections. Over 30 states require photo IDs to vote, the rest do not. Until 2020 only seven state had 100% mail-in voting, now officials are finding boxes full of ballots all over the place and recounts abound! With Covid we saw 44 states change their voting laws and systems, often without public hearings. We are now witnessing the bitter harvest of election dysfunctions. Too many Americans today no longer feel that our elections are “fair and transparent”. This is a real threat to our ability to govern ourselves with good will and a sense of democratic justice.

Along comes the NPV Compact to heap upon our civic environment even more disruption and cynicism. It says, “regardless of how your state votes, those states with the most voters will forever rule this Nation.” Nine US states are home to 50% of our citizens. LA County has more people than 41 of our states! The “national popular vote” scheme aims to turn farmers and rural Americans into modern day serfs, feeding the major cities who will forever rule them. Gone will be the quaint Iowa Caucuses and New Hampshire Primaries. Want to alienate Americans more than they are now in this republic? Support the NPV Compact! And with all of the differences among our 50 state voting systems, the NPV Compact will naturally lead to calls to “nationalize our election laws” by placing the US government in charge of the voting systems of our 50 states. In turn, this will place a future American President in charge of their own re-election machinery. Stunningly unwise!

Yes, the Left seeks to take down the US Constitution, pillar-by-pillar. And they understand that taking down the Electoral College is actually the swiftest way to take down the entire Republic.

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President-Elect Biden Loads Up on Lawyers

President-Elect Joe Biden has announced his EPA review team, many of whom are lawyers from some of the nation’s largest legal firms. Agriculture is in for an interesting ride.

Patrice Lumumba Simms is designated as the team leader to review EPA’s actions and presumably personnel. Mr. Simms is listed as a volunteer from the Earth Justice in Washington, D.C. He was a former associate professor at Howard University Law School from where he graduated in 1998. From 2010-11 Simms was a Deputy Assistant Attorney General in the Environment and Natural Resources Division of the Department of Justice (DOJ).

Simms also lists his service as a staff attorney at EPA in the Office of General Counsel. For two years he was legal counsel to EPA’s Environmental Appeal Board. Simms is a member of the Massachusetts Bar and the D.C. Bar and presently serves as Vice President of Litigation for Healthy Communities for Earth justice.

The Blue Crab Strategies’ Amanda Aguirre is another environmental leader Mr. Biden has named to review EPA. Blue Crab Strategies claims it is a “…mission driven strategic consulting firm…and are focused on improving peoples’ lives and the planet.” Blue Crab Strategies calls itself “A boutique political consulting firm maximizing the change we can make in the world by working with select clients.”

The third person on the Biden EPA team is Ann Dunkin from Dell Technologies. She is the Chief Technology Officer for State and Local Government at Dell. Prior to joining Dell she was the Chief Information Officer for EPA in the Obama administration. She holds a bachelor’s and a master’s degree in industrial engineering from the Georgia Institute of Technology. She, too, has an outstanding background in strategic planning and cross-functional team leadership.

Dunkin has also served as the Chief Information Officer for the County of Santa Clara, California. She has been honored as one of D.C.’s top 50 women in technology.

Another Biden team member will be Matt Fritz, Director of Administration for the Latham & Watkins law Firm in Washington, D.C. Headquartered in Los Angeles, Latham & Watkins is an international law firm specializing in activism along with corporate governance and intellectual property litigation. Fritz was Chief of Staff for EPA between 2013-2016 and served as Director of Communication for the Connecticut Department of Environmental Protection between 2000-2004.

Lots of lawyers

According to one news report, Fritz would be one of nearly two dozen lawyers chosen from the largest law firms in the country to be part of Biden’s various review teams.

Another volunteer team member of the EPA Biden team is Lisa Garcia from Grist Magazine, Inc. She is listed on the Grist website as a lifetime world traveler and environmental justice advocate. In 2019, Grist Magazine welcomed Ms. Garcia and claimed she led EPA’s environmental justice work under Mr. Obama. Grist Magazine says, “Lisa is a total superhero.” Ms. Grist is also “…a fierce defender of justice and has an amazing knack for building community and sparking positive change. I mean, we’ve seen her sporting a cape.”

For those not familiar with Grist, it is a nonprofit media organization and claims it is “…for people who want a planet that doesn’t burn and a future that doesn’t suck.”

Another person on the Biden EPA review team is Cynthia Giles, a Guest Fellow at Harvard Law School’s Environmental and Energy Law program and in addition she has been Assistant Administrator for Enforcement and Compliance at EPA. Ms. Giles has also been an Assistant U.S. Attorney in Philadelphia and a Director of the Conservation Law Foundation’s Advocacy Center in Rhode Island. She received her law degree from the University of California, Berkeley and has written a paper entitled “Next Generation Compliance: Environmental Regulation for the Modern Era”.

Ms. Giles believes there is “…widespread noncompliance with environmental rules and a paradigm shift [is] necessary to turn that around.” She has written that “noncompliance with environmental rules is worse than you think.”

The next four years will be interesting for agriculture.

A version of this commentary originally appeared in the November 17, 2020 edition of Farm Futures. The opinions of the author are not necessarily those of Farm Futures or Farm Progress.

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Virginia Cannot Afford Transportation and Climate Initiative

Few issues were more important during my time in the General Assembly than transportation funding. Representing a district filled with long-distance commuters and congested highways, it always was a struggle to balance the need for funds against public reluctance to raise taxes.

One compromise in 2013 raised transportation revenue during my tenure as speaker of the House of Delegates and the 2020 General Assembly approved another set of tax increases, including an automatic escalator on future fuel taxes. Parts of the state will see their state gasoline taxes doubled by next summer to almost 35 cents per gallon, and then continue to rise.

Yet transportation dollars — not taxes, just dollars — will begin shrinking again if the General Assembly decides to join the regional Transportation and Climate Initiative (TCI). That agreement would require us to join 11 other states and the District of Columbia in imposing a regional carbon tax on fuels. The tax would be coupled with a declining annual cap on the number of gallons for sale in the region.

The goal of the interstate compact is to reduce the emissions of carbon dioxide from transportation fuels by 25% over 10 years. Basically, that translates to 25% fewer gallons sold in 2031 than in 2022, despite any population growth during those 10 years. Fuel taxes remain the primary source of transportation funding, so that means steady declines in revenue for highway construction and maintenance, mass transit and rail.

Supporters of the TCI estimate the initial carbon tax — imposed as an allowance that wholesalers must buy at auction — will add 17 cents per gallon to the price of fuel in Virginia. The Thomas Jefferson Institute for Public Policy had another set of economists examine the proposal, and they project the increased costs instead will be 33 cents per gallon for gasoline and 28 cents per gallon for diesel.

In those areas of Virginia where the gasoline taxes doubled from June 2020 to July 2021 it almost will double again. The Beacon Hill Institute calculated the economic impact on Virginia, since such massive fuel price increases touch every industry, product or service dependent on transportation, at just under $1 billion per year. Assuming those costs find their way to consumers (and most will), it approaches $700 per year, per household.

No one can be sure of the costs until the regional auctions for fuel allowances begin, and each auction will produce a slightly different result. Each year’s auction also will allow fewer and fewer available gallons of fuel, and that dropping supply is a major reason allowance prices will be bid up. In a few years we might envy those Virginians who live near our four neighboring states that are not in this compact.

The billions of dollars collected by the TCI allowance sales will not be spent on highway construction or maintenance. The bulk of the funds will be spent trying to divorce Virginians from their internal combustion engines by subsidizing electric vehicles and charging stations, and promoting alternatives such as bicycle lanes and walking trails. Any subsidies provided to mass transit may just replace the funds being lost through declining collection of traditional fuel taxes.

Will this achieve the ultimate goal of the program architects? Will it make a difference in the projected increases in global average temperatures, which many blame on carbon dioxide emissions? No. Using the Dynamic Integrated Climate-Economy (DICE) model used by those most worried about climate change, the lower emissions will lower future temperatures by 0.0001 degrees centigrade.

The TCI advocates understand this is not a climate solution and instead are touting the various ways the revenue will be spent, with an emphasis on claiming to serve low-income and urban populations. That demonstrates this simply is a tax increase, taking money from one group of citizens to spend on another group of citizens. The biggest winners likely are to be the electric vehicle industry and its customers. The biggest losers will be low- and middle-income households dependent on their cars.

The Virginia General Assembly already has imposed a carbon tax on electricity that will increase everybody’s power bills starting next year. It has mandated construction of wind and solar electricity generators that will cost Virginians billions more than fossil fuel alternatives over the next 10 years. This new carbon tax on fuel actually will cost people more but reduce revenue for roads and bridges, which even electric vehicles need, so expect yet more taxes for those. Virginia cannot afford this.

A version of this commentary originally appeared in the November 16, 2020 issue of the Richmond Times-Dispatch.  Contact him at: info@thomasjeffersoninst.org

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