Carbon Tax Rebate? Don’t Count On It.

by David Flemming

Last November, environmental activists released the “ESSEX” Carbon Tax plan that called for legislation taxing fossil fuels and giving the money that was not used for administering the program back to Vermonters in the form of lower electric rates and rebates for low-income and rural Vermonters. Within the statehouse halls, the ESSEX Carbon Tax has become a hot topic as it has now moved from a concept to actual legislation. We pointed out the inevitable complexities of ESSEX bill last week.

But perhaps more disturbing are the discrepancies between the bill that has been introduced a couple of weeks ago and the PDF the environmentalists released last November. This is important to point out because some members of the general public may end up supporting a bill that is only a figment of their imagination, while the real bill is something else entirely.

According to the ESSEX proposal of November, “households up to 400% of FLP (Federal Poverty Level) were considered eligible” for the low income rebate. However, if we read the bill released by Sen. Chris Pearson (who had promised to support ESSEX in December), it says: “to be eligible for the rebate… the customer’s annual household income shall be below 300 percent of the federal poverty level.” So, 300% vs. 400%, why should that make a big difference?

According to ESSEX November, “400% of FPL” is $90,000/year for a family of four,” which means that 300% of FPL is $67,500 for a family of four. So, if you supported the ESSEX plan because of the low-income rebate and you have an income between $67,500-$90,000, you can no longer count on that rebate. How many Vermont families would this change effect?

The data that ESSEX November uses from the Kaiser Family Foundation (KFF) does not provide a conclusive answer to this question. The KFF uses 3 income brackets to map the state of Vermont, rather than the 4 income brackets in ESSEX November.

ESSEX November uses 2 distinct income brackets for the low income rebate, “200-300% FPL” and 300-400% FPL” while the KFF combines both of those brackets into a single one “200-399%” FPL. As of 2016, KFF reports that 197,300 Vermonters are in this bracket. Some of those Vermonters would still qualify, but unless we were to delve deeper into the data than VPIRG and their ilk has done, we won’t know the answer. If we split the KFF bracket down the middle, then about 99,000 Vermonters would be no longer be eligible for the low-income rebate if ESSEX January were to go into effect, rather than ESSEX November.

This is a cautionary example of why we must be eternally vigilant when dealing with politicians. Bills can change radically between concepts and ratification, and even after ratification, laws can be changed. If it happened in the private sector, it would be called bait and switch.

David Flemming is a policy analyst for the Ethan Allen Institute.

 

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