CSUS AB 32 Study Attacked

The CSUS study authored by Sanjay Varshney (Dean of the College of Business Administration) and business professor Dennis Tootelian is now under attack. Why? Because in the study the refutes AB 32, global warming and green job creation as good for the California economy.

The Sacramento Bee reports today “Last week the university’s student newspaper, the State Hornet, quoted Stanford University energy-efficiency expert James Sweeney as saying the duo’s conclusions about the state’s global warming law were “truly weird.”

Not exactly a bastion of non-partisan, and unbiased reporting, The State Hornet went to Stanford to find a professor to discredit the study, even though CSUS stands by the work done by Varshney and Tootelian.

Varshney and Tootelian’s detailed study showed that regulations on small businesses in California have cost the state’s economy $492 billion and detailed the total cost of regulation to the state of California:

• $492 billion;
• Almost five times the state’s general fund budget;
• Almost a third of the state’s gross product;
• An employment loss of 3.8 million jobs, which is a tenth of the State’s population.

Since small businesses constitute 99.2 percent of all employer businesses in California, the regulatory cost is borne almost completely by small business.

A 2009 study released by King Juan Carlos University in Madrid discovered that every “green job” created with government money in Spain over the last eight years came at the cost of 2.2 regular jobs. What’s more, just one in 10 of the newly created green jobs actually becomes permanent.

And now, the non-partisan Legislative Analyst’s Office (LAO) has come out with their own report at the request of Assemblyman Kevin De Leon, D-Los Angeles. (The report is available here: PDF)

De Leon, has skin in the game as well. He sits on the  Committee on Natural Resources, and the Santa Monica Mountains Conservancy. De Leon’s bio says that he is a former community organizer, English as a Second Language and U.S. Citizenship teacher, “advocate” for public schools, and was employed for five years at the California Teachers Association, as well as a Senior Associate for the National Education Association (NEA) in Washington, D.C., He also coordinated a team that fought schemes to take funds from public schools in the form of taxpayer-funded vouchers. At the NEA he also thwarted efforts to impose academic censorship on public school teachers.

The Committee on Natural Resources primary jurisdiction includes air quality, climate change, energy efficiency, renewable energy, California Environmental Quality Act (CEQA), coastal protection, forestry, land conservation, oil spills, solid waste and recycling.

The rest of the story is that Assemblyman Dan Logue, R-Linda, has authored an initiative to suspend global warming laws in California (AB 32) until the state’s unemployment rate falls to 5.5%. Logue is taking hits from every direction, and now the LAO has added punches. Varshney and Tootelian’s study found that the additional regulations imposed by AB 32 on California businesses will severely impact small businesses, already suffering from over-regulation in the state.

A recent Milken Institute cost index report that found California has 24 percent higher business costs than the rest of the country. In the same report, the cost of California businesses was compared to Texas: taxes are 57 percent higher in California, electricity is 17 percent higher, and there is a 13 percent wage burden on California businesses that Texas does not have. Texas congregates its Legislature in only odd years and requires a two-thirds majority on every bill, and created 70 percent of the new jobs in the United States in 2008, and had a $2 billion budget surplus in 2009.

The uncertainty of the rising costs and increasing regulations is behind many California businesses choosing to pack up and leave the state.

California has already lost 600,000 manufacturing jobs since 2001 according to the California Manufacturers and Technology Association.

– Katy Grimes