And you thought the California Global Warming Solutions Act (AB32) was all about limiting greenhouse gas emissions, didn’t you? Think again.
There is a brewing fight in Sacramento over how to spend the gold expected to start pouring in when the Golden State starts its carbon cap and trade program. The original intent of AB32 was to use the proceeds from the carbon permit auctions to invest in technologies and programs that reduce greenhouse gas emissions. Makes sense, right?
But the law was passed in the boom times of 2006. Today six years later as the first carbon cap auction is being readied for later this year, California has a $16 billion general fund deficit and more than a few pet projects are going begging for money. The State has acted like a giant vacuum cleaner suctioning up money from cities, counties and schools. It abandoned a decades old economic redevelopment program and seized the revenue from redevelopment agencies to help close the budget gap.
The only way California is going to dig itself out of this fiscal hole is by winning the lottery. But wait—it believes it has the winning ticket, but first it wants to try the ‘soak the rich’ play one more time before all the rich move to Texas or Nevada or anywhere else.
Governor Brown has proposed tax increases on the wealthiest Californians on the November 2012 ballot but one tax measure to increase cigarette taxes by one dollar per pack on the June primary election ballot is still losing in the recount process. Not a good omen for the November election.
So what does this have to do with cap and trade revenue?
Mr. Hunt seems rather insightful for a journalist.
My bet is that revenues will fall far short of projections, yet gross spending will continue. The budget will have no connection with reality. The tiger can’t change his spots.
The #1 priority for any elected official is to get re-elected. To that end, all other actions are aimed, regardless of their trappings.
Social programs and spending programs are intended to buy the ‘loyalty’ of people who put ballots into boxes (legally or otherwise).
All programs that do not represent an outflow of moneys to this end are meant to bring in the moneys needed for these programs. Cap & Tax is just another ‘revenue stream’ to finance the buying of votes.
Unfortunately for the country, most state and local governments have reached the ‘tipping point’ where they are having trouble taxing, borrowing, or stealing enough money to buy the entitlement classes – the domestic equivalent of Greeks. There are no longer sufficient taxable resources to fund the wealth redistribution schemes in place.
As California continues to hemorrhage millionaires (except those Hollywood type who don’t pay their taxes anyway) the state will become an Obamaville with a population of tens of millions.
And a lepoard can’t change his stripes!