Duluth News Tribune: Don’t ignore warnings of ‘backdoor gas tax hike’ in Minnesota

The Duluth News Tribune had an excellent piece by its editorial board this week that warned Minnesotans about the Walz administration’s attempt to enact a stealth gas tax in the form of a California Transportation Standard. The article quotes extensively from American Experiment’s Policy Brief on the subject.

One Minnesota watchdog group calls it a “backdoor gas tax hike” while another says it’s a “stealth gas tax” and an “extreme proposal.”

Still days away from the 2024 legislative session in St. Paul, and the National Federation of Independent Business (NFIB) in Minnesota, the Center of the American Experiment, and others are already raising red flags over the Walz administration’s expected push this year for a California-style low-carbon fuel standard, or clean-transportation standard, that could cost Minnesota households hundreds more to gas up every year, as the groups warn.

While a bit dramatized and no doubt at least somewhat politically motivated, the warnings deserve to be included and considered seriously when the findings and recommendations of the Clean Transportation Standard Work Group , established by last year’s DFL-majority Legislature, are considered and debated this session. All Minnesotans use fuel, after all, and all to varying degrees are concerned about greenhouse-gas emissions and pollution. So all Minnesotans deserve to be part of this coming critical conversation.

“They want to raise the cost of gas in Minnesota by 39 to 45 cents per gallon … (with none of the additional revenue going) for roads and bridges (and with) no measurable impact on the environment,” American Experiment, headquartered in Golden Valley, Minnesota, warns in urging state residents to contact their elected lawmakers immediately. “A new stealth gas tax will be worse than California’s crazy fuel standards.”

California is one of three states so far that have adopted a low-carbon fuel standard, joined by Oregon and Washington. Such standards set phased emissions reductions for transportation fuels. Fuel makers must meet the emissions-reduction targets by changing how they produce fuel, purchasing credits to offset emissions, or facing penalties, the NFIB explained in a Feb. 1 statement to news outlets, including to the News Tribune Opinion page.

“Continuing to import radical energy policies from California will drive Minnesota off a fiscal cliff,” John Reynolds, state director of NFIB Minnesota, said in the statement. “Independent truckers, farmers, and other small-business owners can’t keep their doors open when they’re facing a 50 cents per gallon tax hike for diesel. Backdoor energy taxes are not the solution. We urge the Minnesota Legislature to reject this scheme and focus on improving our environment without harming our economic future.”

In California, a fuel standard increased gas and diesel prices by 22 cents per gallon in 2020 while reducing the carbon intensity of fuel by just 7.5%, Stillwater Associates determined . According to its Legislative Analyst’s Office , California’s fuel standard is expected to cost motorists 46 cents per gallon for gasoline and 50 cents per gallon for diesel by 2030.

As the NFIB points out, Minnesota lawmakers last year already took significant action in the name of reducing greenhouse-gas emissions, including $16 million in rebates for buying or leasing electric vehicles (up to $2,500 per vehicle); $4 million in rebates for buying electric bicycles (up to $1,500 per bike and two bikes per family); $13.8 million for chargers for electric vehicles; $7 million for electric school buses; $6.5 million to upgrade electrical panels at single-family and multifamily homes to accommodate electrical-vehicle charging; and creating an uncapped energy tax to fund electric-vehicle purchases, leases, and infrastructure subsidies.

That’s more than $47 million in state funding. Lawmakers can think seriously about also adding a costly-to-Minnesota-motorists fuel standard.

How costly? More than $800 for every household in Cook and in seven other rural Minnesota counties by 2030, according to a multi-sourced analysis touted by the American Experiment, a conservative public-policy think tank. A clean-transportation standard for Minnesota could cost households in St. Louis County $400 to $599.

That’s not chump change. Rather, it’s hundreds of good reasons for every household in Minnesota to urge lawmakers this session in St. Paul to consider seriously and to debate thoughtfully any transportation fuel standard — whether calling it a “backdoor gas tax hike” seems a bit dramatized or not.