At the 2019 Renewable Energy Vermont Conference, Burlington Mayor Miro Weinberger announced his support for a carbon tax that would raise the cost of gasoline, diesel, oilheat and propane. The tax would begin at $30 per metric tonne and gradually increases to $170. This is translates into 30-cents a gallon and tops off at nearly $1.70 a gallon tax on heating and motor fuel.
At current rate of consumption, this would raise nearly $200 million. At the high end, this would create a $1 BILLION new tax on Vermonters.
The money would be "returned" to Vermonters in the form of a dividend check. Don't wait too long by the mailbox. The net proceeds from this job killing tax come after they backfill the missing tax revenue from diminished sales of oil and gas. Vermont's fuel dealers pay hundreds of millions of dollars in taxes that fund our transportation system, general fund and weatherization programs.
Who does this policy benefit?
Those that already purchased an electric car or upgraded their heating system.
Who does it hurt?
Those that choose to live in rural Vermont, where we still need oilheat and propane to get through our long, cold winters and where we still need gasoline and diesel to travel on dirt roads.
If you thought the carbon tax was dead, think again.
We are in for another round of carbon tax bills in Montpelier. This despite a "carbon pricing study" paid for by Vermont taxpayers in 2019 that proved it is a bad idea. Below are details from the study.
A Vermont Carbon Tax will not “solve” climate change.
According to the analysis, Vermont will not meet climate goals by implementing a carbon tax.
It will not benefit the economy.
A carbon tax could lower Vermont GDP nearly 1%.
Large employers and low income Vermonters will feel the pain.
Low-income and rural households spend a larger percentage of their income on energy. A carbon tax is regressive, particularly in rural areas of Vermont, where people are more dependent on gasoline to get to work and heating oil to stay warm. Energy intensive industries like factories are affected more than other industries.
A low carbon price will not reduce emissions, a high price will hurt the economy.
A carbon tax will signal to large employers not to move to Vermont— or current employers to move out. Due to the sales tax, pollution fee, and fuel tax, Vermont businesses already pay 7% more per gallon than our neighbors in New Hampshire (based on $3 gallon heating oil). A carbon pricing policy that levies a $100 per metric ton tax would make the same fuel 50% more expensive. Raising the cost of energy purchased in our state will provide an economic advantage for businesses to operate outside of Vermont’s borders.
If Vermont goes it alone “emissions reductions are overestimated.”
Half of Vermont’s population lives near the border of New Hampshire, Massachusetts, or New York. The carbon tax study recognizes that liquid fuels are easily transportable, delivered directly to a tank at a home or business. Out of economic necessity, carbon tax avoidance will become widespread. There is no prohibition on consumers purchasing untaxed fuel outside of Vermont and transporting fuel in cars, trucks, cans or portable tanks in their personal vehicle (up to 110 gallons are allowed). This method of transporting fuel is inherently unsafe.
Chittenden County wins…..again.
According to one author of the carbon tax study: “We do find that rural households are on average slightly worse off from the policy than the Chittenden County residents.” Urban areas where homes and employers are more concentrated and where public transportation is readily available will do better than those living in the “Other Vermont."
We will need another tax.
The study recognizes that if the state of Vermont achieves its goal of reducing fossil fuels, lawmakers will need to replace the hundreds of millions of dollars in taxes paid every year by the gasoline, diesel, heating oil, and propane industries. These taxes are what pay for road construction, pollution mitigation and low income weatherization, as well as contribute to the general fund.
Fact checking the pro-tax people.
Switching from oil to electricity does not “keep money local” when most of our electricity (just like our fossil fuels) comes from Canada and the largest electric utility in Vermont is owned by a corporation in Quebec.
Winter peaking means we have oil fired electric heat.
The ISO NE mix is 70% coal/oil/gas in 2017 and is expected to be 76% coal/oil/gas in 2025. In 2018, heating oil proved critical to ensuring that ISO NE had enough power. New England power generators used 84 million gallons of heating oil between December 25th and January 9th. This is about the same amount of residential heating oil sold in Vermont during an entire year. In other words, New England electric utilities needed a year's supply of Vermont's heating oil to ensure the region had enough electricity for two weeks.
Vermont is still cold.
As anyone who has huddled inside their home in January knows, the temperature in Vermont drops below zero frequently. While cold climate electric heat pumps (ccHP) are great air conditioners in the summer and provide warm air in the fall, you need combustion to stay heated in the winter. They do not heat the whole building, only the rooms where the appliance is located. You still need an oilheat or propane fired central heating system operating in the winter to ensure your pipes don't freeze. When pipes freeze up they can crack and cause significant damage. And, if there is no back up oil or gas system, Vermonters will rely on costly and dangerous electric space heaters to stay warm. Read more at
What Local Benefit?
The pro-tax lobby claims a carbon tax will create local jobs by keeping our energy dollars local. Rarely is it mentioned that the majority of our electricity comes from outside of Vermont and the single largest provider of power is from Canada. Meanwhile, the Vermont Carbon Tax seeks to eliminate the local home energy companies that provide thousands of local jobs and pay millions in taxes right here in Vermont.
What about the roads?
Even if gas powered cars are replaced with electric vehicles, we will still need to maintain our highways. Vermont sells about 350 million gallons of motor fuel annually, which generates approximately $100 million in excise taxes for Vermont’s transportation budget. These taxes directly fund road construction and bridge repairs in Vermont. Another new tax will be required if sales of gasoline and diesel fuel decline.
Won't another energy tax discourage economic development?
While it is obvious, it still needs to be stated. Any energy intensive company in Vermont will have to consider whether to relocate to a state that does not have a tax on motor, process and heating fuels. Some carbon tax proposals would make liquid fuels 25% to 50% more expensive than neighboring states. Business owners who are considering moving into or out of Vermont would have to consider the increased energy costs as part of the cost of doing business.
How much will it cost to police the river?
Half the population of Vermont lives near the border of New Hampshire, Massachusetts, or New York. There are hundreds of ways to cross over. According to a survey by the National Association of Convenience Stores (NACS), three in five (63%) consumers say they would drive five minutes out of their way to save 5 cents per gallon. Is there any doubt that Vermonters will cross over to save 40-cents per gallon? Our bridges will be worn down with all the traffic, only there won’t be money to replace them because the excise taxes will be collected in Concord— not Montpelier. And what will stop people from crossing back over into Vermont with trucks loaded with skid tanks of diesel, SUVs with 20 gallon jerry cans of kerosene, and cars with propane tanks. Out of economic necessity, there will be widespread carbon tax avoidance. Vermonters who are living on the margins will figure out a way to keep their homes warm. But it won’t be safe.
So what is being done about reducing fuel consumption?
Plenty. Vermont REQUIRES electric utilities to reduce fossil fuels used for transportation and heating among their customers (as per the 2015 Vermont Energy Act). Most utilities are complying with the Tier 3 mandate by incentivizing electric heat pumps and electric cars. There is a real sense of purpose amongst the anti-fuel lobby that something new must be done every year. But there is little patience to allow existing programs to develop.
A carbon tax is a regressive scheme to harm those who choose to live outside of Burlington. Raising the cost of living in a cold, rural state is not a solution to anything but economic ruin.