This week, the Legislature is assessing how to spend $3.1 billion that came into state coffers from farmers, truckers, factories, and other businesses that employ workers throughout the Central Valley. But the proposals so far just look like more pork-barrel spending at the expense of hardworking Californians.
This revenue was collected from businesses under the guise of AB 32, the Global Warming Solutions Act, supposedly to reduce greenhouse gas emissions.
I was in the Legislature when AB 32 was passed 10 years ago. And now, as a member of the City Council of Lodi, I’m disappointed to see the law being abused to raise billions in taxes for unaccountable spending that doesn’t measurably improve our air quality.
This is a double-whammy for the people of Lodi: We still struggle with air pollution yet now our community’s key industries are also getting taxed in the billions of dollars.
It’s the same story up and down the Valley. Businesses that provide jobs are getting squeezed, and the money’s being wasted.
AB 32 authorized the state Air Resources Board to regulate greenhouse gases. ARB instead is extorting businesses to out-bid each other for a limited number of “allowances” to emit greenhouse gases. The prices businesses must pay for these allowances inevitably gets passed down to consumers and impacts jobs.
ARB says it will continue collecting revenue through these “allowance auctions” for at least another four years, totaling up to $45 billion according to the nonpartisan Legislative Analyst.
This week, legislative budget hearings will consider proposals to spend the revenue on a range of programs that have little or nothing to do with air pollution or climate change – parks, housing, even mosquito abatement and low-flush toilets. This is not going to help our residents with the poor air quality we face every day.
The problem is a lack of accountability. AB 32 never authorized ARB to levy this tax. And even if it had, AB 32 did not receive support from two-thirds of the Legislature, which is required to levy new taxes.
So now that the revenue is coming in, without any guidelines for how to spend it, it’s been up for grabs for any special interest with a pet project that can get to it first.
When AB 32 was being debated in the Legislature in 2006, I was among the legislators who questioned the provision authorizing ARB to collect a fee from businesses. We were assured by the bill’s proponents, on the floor of the Assembly, that the fee was only to cover administrative costs – not the billions that ARB is taking from businesses today.
In fact, that assurance is the only reason AB 32 could pass the Legislature with only a simple majority of “yes” votes – not the two-thirds that the California Constitution requires for new taxes.
Now ARB is saying it doesn’t need to follow the two-thirds rule because the revenue is merely “incidental” to its job of reducing greenhouse gases. That’s an interesting spin. But if that were the case, then why is the revenue now being spent on more government and bureaucracy instead of measurable positive results?
The hardworking families and communities of California deserve better. Lawmakers need to finally put this carbon tax to a vote, pass it by at least two-thirds, and dedicate the revenue more effectively and transparently to actually meeting the goals of AB 32.
Alan Nakanishi is a member of the Lodi City Council and a former Assembly member.