New York carbon tax proposal fizzles

Three weeks remain in the 2021 legislative session, and despite the Democratic supermajorities in the state Senate and Assembly, the controversial Climate and Community Investment Act is almost certainly not going to pass this year. “That doesn’t mean we shouldn’t try and continue to move it up the priority list,” said Democratic Assembly Member Kevin Cahill of the Hudson Valley, who is sponsoring the legislation in his chamber. “I think we can wrap this up in a session or two.”

The bill seeks to impose a carbon tax that could raise $15 billion of much needed funding to help the state meet its climate change mitigation goals – but whatever the merits of the legislation – politics is a key barrier to getting it passed. Business groups have claimed the bill would lead to higher energy costs for consumers. Many moderate Democrats have yet to get behind a bill that has become a new focus of Republican attacks.

A total of 29 members of the 63-seat state Senate have signed on to the bill. This includes six of the 18 Democratic state senators from outside New York City. Not a single senator from Long Island – including Environmental Conservation Committee Chair Todd Kaminsky, a Democrat – has officially backed the bill thus far. Just 47 members of the 150-seat Assembly have signed on. Cahill said it is also critical that his chamber hold a hearing on the bill as the state Senate did weeks ago. 

But despite the odds facing them before lawmakers adjourn for the year on June 10, environmental activists have at least one big reason to remain optimistic about passing the bill this year. “Let’s remember what happened in 2019 a few weeks before we passed the (Climate Leadership and Community Protection Act) the governor himself said it was a no-go,” Maritza Silva-Farrell, executive director of the advocacy group ALIGN, said in an interview. “We are going to continue to urge the legislature to move the CCIA this year.” Her organization is a member of the steering committee of NY Renews, a coalition of groups backing the legislation that includes influential groups like building service workers union 32BJ SEIU and Environmental Advocates of NY. 

Environmental activists held several rallies downstate on Tuesday, including outside Kaminsky’s office. Kaminsky did not respond to a request for comment for this story. “They have to make our colleagues know that it's important,” Cahill said. “They also have to reassure them that if they support it, they're going to have their backs.” The bill would impose a $55 surcharge on each short ton of carbon dioxide emitted in the state to fund what supporters call a just transition to renewable energy that would address damage done to those hurt the most by pollution, which are disproportionately low-income neighborhoods and people of color. 

“The legislature has the opportunity to deliver real relief for New Yorkers across the state, invest in frontline communities, and put New York on a path to a just, renewable economy that works for all,” reads a May 19 statement from NY Renews. “The CCIA would transform New York State for the better. We invite the legislature to get to work, and get it passed.”

An April 13 state Senate hearing highlighted the arguments against the bill from the business community. “This legislation would create several redundant programs and responsibilities that are currently assigned to other state agencies, regulate emissions already subject to state and federal oversight, establish an expansive new state bureaucracy and impose billions in fees on a wide range of businesses and residents alike,” said Kenneth Pokalsky, vice president of The Business Council of New York State, in his submitted testimony. Headlines across the state now reflect a key talking point of opponents who say that the bill would lead to a 55-cent hike per gallon in gasoline prices. 

Talk of higher energy prices ignores a provision in the bill that would provide tax rebates to consumers. Cahill also noted that gas prices have climbed a lot in recent weeks without any help from environmentalists. “Republicans and business interests arguing that the CCIA would raise costs on consumers fail to recognize the human costs of continuing to pollute our air and communities with fossil fuels,” reads an April 27 statement from NY Renews. Assuming that the bill would work out for consumers’ pocketbooks as much as they claim, proponents still face the political quandary of explaining the complicated ways that the bill would benefit New Yorkers while opponents continue highlighting a simple talking point about that purported tax hike at the pump.

Billions of dollars in new revenues could turbocharge state efforts to reduce its greenhouse gas emissions by 85% before 2050 (compared to 1990 levels) established by the 2019 Climate Leadership and Community Protection Act. But lawmakers still have to convince many more colleagues that it is a good idea because of the formidable future costs of climate change. And then there is the matter of convincing Gov. Andrew Cuomo that he should sign the bill. “I understand the concept and in concept it makes sense,” Cuomo told reporters May 13. “How does it work? What is the economic impact? You'd have to (answer) all those questions."

State Senate Energy and Telecommunications Committee Chair Kevin Parker of Brooklyn, who is sponsoring the bill in his chamber, said in an interview that opposition from the business community and outstanding concerns among colleagues about potential increases in energy costs remain key barriers to passing the Climate and Community Investment Act. State Senate Majority Leader Andrea Stewart-Cousins has yet to give her blessing to the formation of a working group, which has been a common tactic among state Senate Democrats to resolve their differences on contentious legislation. Still, the longshot effort to pass the bill this year remains ongoing despite the odds. “When we look at the CLCPA – how many drafts of that did we do before we actually got that done?” Parker said in an interview. “This is as significant as that if not more so we're working at it, and we'll see where we end up.” 

Yet bills have to pass both chambers, and the fact that his Assembly counterpart says another year or so is needed to rally support suggests the Climate and Community Investment Act in 2021 is just a dead end.