Legislature passes ‘illegal’ green slush fund

Sept. 11, 2012

By Dave Roberts

When California enacted AB 32, the California Global Warming Solutions Act of 2006, the bill was touted as a way to make California environmentally friendly. But it’s also turning into a billion dollar slush fund for Democratic pet projects, which the California Chamber of Commerce has labeled an “illegal tax.”

AB 32’s goal is to reduce greenhouse gas emissions to 1990 levels by 2020 — a total reduction of 25 percent, or 80 million metric tons. Most of the reduction is planned to come from regulatory crackdowns on businesses. The remainder, about 18 million metric tons, would come via a Cap and Trade program on heavy manufacturers and energy-intensive businesses. A cap is placed on the emissions allowed by a business, which can be exceeded by purchasing an allowance. Each allowance is equivalent to one metric ton of CO2.

Periodic auctions of allowances (the first is scheduled for Nov. 14) will be conducted by the California Air Resources Board; $1 billion is expected to be raised from the auctions in the 2012-13 budget year, according to Gov. Jerry Brown. His budget creates a Greenhouse Gas Reduction Account, in which $500 million is planned to be spent for greenhouse gas mitigation activities. The other $500 million could go for “investments” in clean energy, low-carbon transportation, natural resource protection and sustainable infrastructure development.

Billion-Dollar Green Pie

Naturally, everyone wants a piece of that billion-dollar green pie. The Chamber is most concerned about three bills passed on the last day of the legislative session — SB 535, AB 1186 and AB 1532 — that slice up the pie.

SB 535 dishes a quarter of it to “disadvantaged” communities.

AB 1532 allows the money to be thrown at a smorgasbord of projects, including biofuels, electric vehicles, land conservation, public transportation, sustainable housing and recycling.

AB 1186 slates money for energy efficiency projects in public schools; but a late amendment removed the connection to Cap and Trade funds, according to the bill’s author. Assemblywoman Nancy Skinner, D-Berkeley.

The Chamber is urging its members to call on Brown to veto the bills, which, it says on its website, “will increase energy costs, including fuel prices, on consumers and businesses.” On the question of legality, the Chamber argues that “the California Air Resources Board lacks authority and has been unable to justify the need to raise billions of dollars in revenue for the purposes anticipated in the bills. AB 32 was not intended to be a revenue source.

“If the state moves forward with a billion-dollar auction, the impacts on the state’s economy would be devastating. Entities subject to the illegal tax include manufacturers, public agencies, universities, refineries, food processors and others. The impact on these entities will be severe and on top of the higher fuel and energy costs due to other climate change regulations. Not only is an auction unnecessary for a successful cap-and-trade program, but the planned collection and distribution of auction revenues raises legal uncertainties.”

The California Taxpayers Association also questions the legality of the green slush fund, sending a letter to legislators asserting, “AB 1532 is … inconsistent with the constitutional definitions of taxes and fees.”

That was echoed by Republicans in the debate over SB 535 on the Assembly floor on Aug. 31. Assembly Speaker John Pérez, D-Los Angeles, introduced the California Communities Healthy Air Revitalization Trust, which was authored by Sen. Kevin de Leon, D-Los Angeles.

As de Leon wrote, “SB 535 ensures that, as California takes steps to address climate change, we invest in the neighborhoods that continue to suffer from higher levels of pollution and are least able to confront the expected impacts of environmental reality. The bill directs the California Environmental Protection Agency to develop a methodology to identify disadvantaged communities based on socioeconomic and environmental criteria. It then directs that no less than 25 percent of all available funds from cap-and-trade auctions annually are invested in such a way that they provide benefits to those identified communities, and that no less than 10 percent are invested in projects directly within these communities.”

Cap-and-Trade Conspiracy

Assemblyman Curt Hagman, R-Chino Hills, led the opposition: “We talk about conspiracy theories with Cap and Trade. This is why. This bill arbitrarily takes off 10 percent of the Cap and Trade auction revenues to projects in disadvantaged or disproportionately impacted communities — and does so when there’s no evidence that cap-and-trade will harm those communities. So it’s a way to gain revenue at a time when we trying to impose taxes on these businesses. It is a fee for a program — this is not a pool of money and funds to spend on pet projects. You wonder why voters are not in favor of us passing more taxes. They don’t believe we manage them correctly. We tell them we’re doing one thing with a bunch of fees. And here’s evidence again that we’ve got this pool of money, so let’s go have fun with it.”

Asked Assemblyman Tim Donnelly, R-Twin Peaks, “Do we really need another unelected, unaccountable bureaucracy? And how are we going to know there’s no conflict of interest with the board members on this? This is money that we are confiscating and extorting from businesses right now that hire people. There are food processors, there are all kinds of manufacturers, anybody who has anything to do with cement, and that’s a big industry in my district. These guys are paying exorbitant fees right now just to exist. And now we’re going to take this money and siphon it off for some community revitalization air trust?

“I mean, c’mon, I thought this was all about stopping the global warming and you were going to use that money to do something useful with it. And now I hear that there’s 15 other people that have lined up to try to get their hands in the pot. Really, what is Cap and Trade? What does it do? It’s real simple, it is a moving notice to companies that do business in California. It’s an invitation to leave the state, because you have to pay essentially blackmail or greenmail, or whatever color you want to call it, to the government.

“For us to be pushing a new government program to immediately gobble up these funds that we said are so necessary that we had to hit every business that produces any kind of energy, I think we lose credibility with the public. Because the public doesn’t believe we need a new agency at all. I don’t see that there’s any nexus between this agency, this board, this whatever you want to call it, and the tax that is being siphoned off of these businesses. I’ll tell you one thing this will do, and if this is about people that are in disadvantaged communities, they need jobs. And this will kill jobs.”

Steve Knight, R-Palmdale, questioned the criteria used to identify disadvantaged communities. “Areas disproportionately adversely impacted by environmental pollution and hazards — that could be anywhere in the state,” he said. “Areas with concentrations of residents with low income, high unemployment, low levels of home ownership, high rent burden and low levels of educational attainment. I don’t know about you, ladies and gentlemen, but I would think that that’s probably every district in the state. Every one of us could say we have an area, there was one comment here last week that said that they represented the armpit. Well, I think that there are bad areas in everyone’s district, and they are adversely affected.”

Another Nail in Business Coffin

Shannon Grove, R-Bakersfield, shared Donnelly’s concerns about adding more bureaucracy to this bureaucratized state.

“There’s no specifics in the bill about the new board that it creates, other than the California Air Resources Board will appoint a seven-member panel,” she said. “We know we can trust that: a rogue board appointing another rogue board that will do whatever they’re going to do. Keep in mind that the Air Resources Board is the same entity that said that AB 32 was not going to cost us any jobs. We can name company after company that have left this state because they are not going to compete with AB 32. Because they can go right across the border to Nevada, create the same jobs that they could create here and ship their products here on the back of a flatbed diesel truck. Voting for this bill would be just another nail in the coffin for our business owners.”

Pérez countered that the time for arguing against California’s efforts to curb global warming is long past.

“Much of the debate seems to revolve around the notion of whether we should move forward on reducing greenhouse gases — a decision made by a previous Legislature and governor in passing and adopting AB 32,” he said. “A question that members of this body were dissatisfied with the outcome of and then decided to go and referendize it in essence through Prop. 23. And the voters soundly rejected that and expressed their strong support for this greenhouse gas reduction effort.”

On the ballot in 2010, Proposition 23 would have suspended AB 32 until unemployment dropped. Voters rejected it.

The only question now is: Who should be making the decisions on how to spend the Cap and Trade auction money, Perez said.

“The reality is lack of action in this matter would result in a situation where the (Air Resources) Board wouldn’t have direction from the Legislature,” he said. “The Air Resources Board is moving forward with Cap and Trade. We want their decision on the expenditure of those monies to be informed by the interests expressed by the Legislature.”

It’s a near certainty that Brown, despite the veto pleas from the Chamber of Commerce, will sign the bills.


Write a comment
  1. CalWatchdog
    CalWatchdog Author 11 September, 2012, 07:48

    Forget the relativity, string theory and black holes. The real mystery of the universe is why there are any jobs left in California.

    — John Seiler

    Reply this comment
  2. Tom Tanton
    Tom Tanton 11 September, 2012, 07:55

    All this and it’s not even necessary to the goal of reducing greenhouse gasses. Nationally, our GHG emissions are lowest in 20 years (according to EIA) even with an increase in economy and energy use.

    Reply this comment
  3. But don't u want to make the world a better place?
    But don't u want to make the world a better place? 11 September, 2012, 08:00

    One thing you can count on: union bosses are going to get their piece of the pie, either through the “Blue-Green Alliance” or through a dozen other schemes.

    Reply this comment
  4. Karen Myers-Vance
    Karen Myers-Vance 11 September, 2012, 08:37

    You are so right. What a total waste of such a beautiful state they have created. I moved to Lake Tahoe in the ’70’s and called it home for about 5 years until I’d had enough of Mr. Brown’s first term and left for a better job and political realm. It worked out for the best, I enjoyed every minute of living in Colorado and raising a family. Being part of a community that truly cared about the children and their education is a blessing to any family, something I don’t see out here. I got sick and had to ask for help from my family that lives in San Bernardino. I did work again, but stayed close to my family out here. I was hoping that the politics would change, but after Arnold, and now Jerry again, I feel this state has gone completely mad and there isn’t a point of no return anymore.

    Reply this comment
  5. Queeg
    Queeg 11 September, 2012, 08:42

    This will receive 60 posts!

    Spare us!

    Reply this comment
  6. Edward Steele, Chief Investigator
    Edward Steele, Chief Investigator 11 September, 2012, 09:07

    Many Republican officials greatly admire the father of cap and trade: President Ronald Reagan. Yet opposition to “cap-and-trade” legislation to reduce global warming pollution is a common refrain among many Republican and a few Democratic officials this fall. The program is derided as a “cap and tax” that would drain voters’ wallets while bankrupting the nation. After the demise of comprehensive global warming legislation in the Senate, Minority Leader Mitch McConnell (R-KY) gloated that “cap-and-trade, which is also known as the national energy tax, is dead in the United States Senate.”

    Ironically enough, the three most recent Republican presidents promoted cap and trade, including Ronald Reagan. They employed such a system to phase out lead in gasoline, cut chlorofluorocarbons and other ozone-depleting chemicals, and reduce sulfur pollution from power plants responsible for acid rain — all without undue cost.

    Reply this comment
  7. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 September, 2012, 09:30

    I love how Teddy is giving the “Thumbs Down” pose in the pic 😉

    Reply this comment
  8. Queeg
    Queeg 11 September, 2012, 09:48

    CWD’S mascot chimes in after an eloquent, insightful post by Mahahreseeh Teddy!

    Reply this comment
  9. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 September, 2012, 10:00

    I accept the challenge 🙂

    Reply this comment
  10. Edward Steele, Chief Investigator
    Edward Steele, Chief Investigator 11 September, 2012, 13:17

    Poodle– I also accept that you are challenged…..in oh SO many ways.

    Reply this comment
  11. Rex the Wonder Dog!
    Rex the Wonder Dog! 11 September, 2012, 13:57

    Teddy- do the “thumbs up pose” for us 😉

    Reply this comment
  12. Ulysses Uhaul
    Ulysses Uhaul 11 September, 2012, 14:23

    Green revolution is an overpaid designer’s dream. Little product “certified”….so prices to the moon. As a market segment, green cleans out young educated people…..they may wake up.

    You whackos go and live green in France…..overpriced housing, gas very high, food expensive, taxes off the chart…..
    But they like their green.

    Reply this comment
  13. BobA
    BobA 12 September, 2012, 08:26

    PT Barnum once said: “there’s a sucker born every minute.” Thomas Tusser once said: “A fool and his money are soon parted.”

    There are more fools and suckers alive today than ever before who are ripe for the picking. It stands to reason that any politician alive today who is adept at exploiting fools and relieving them of their money is worth more than his or her weight in gold.

    Global warming and so-called “green” energy is a scam to exploit the suckers and part them from their money. This will pass just as soon as they milk the Global warming and green energy scam for all it’s worth and then drum up the next scam and cut the politicians in on the deal.

    Reply this comment
  14. Edward Steele, Chief Investigator
    Edward Steele, Chief Investigator 12 September, 2012, 10:40

    LOL Boba— are you a global warming denier? Ok— answer these questions

    1. Do you think 9/11 was an inside job?
    2. Do you think The President was born in Kenya?
    3. Do you think our gov. lied about the aliens they have in a freezer over in Roswell?

    Seriously I am curious if you would answer yes to any of those other questions.

    Reply this comment
  15. BobA
    BobA 12 September, 2012, 12:16

    Edward Steele:

    Emphatically yes. Science is not consensus: it is fact and a preponderance of anecdotal evidence is no substitute for facts. If it were, then I could offer anecdotal evidence proving that pigs can fly. You are way out of your league on this issue.

    BTW: if you “feel” that strongly about “glo-bull” warming, then send me your life savings and I’ll tell you how you can remove yourself from the glo-bull warming equation.

    1- 9/11 was committed by Arab terrorists. Period.
    2- Obama was created in a test tube.
    3- Our government can’t be trusted to keep secrets but our military can and does keep secrets from the likes of you for reasons I agree with. That’s all you need to know.

    Got mo question? Go ahead, make my day.

    Reply this comment
  16. Ulysses Uhaul
    Ulysses Uhaul 12 September, 2012, 12:24

    Bobbie…..be nice.

    Teddy is trying to draw you out in the sunlight of progressive thought.

    Reply this comment
  17. Rex the Wonder Dog!
    Rex the Wonder Dog! 12 September, 2012, 12:44

    Edward Steele:

    Emphatically yes. Science is not consensus: it is fact and a preponderance of anecdotal evidence is no substitute for facts. If it were, then I could offer anecdotal evidence proving that pigs can fly. You are way out of your league on this issue.

    LOL….you’re just NOW figuring out Teddy Steals is a moron????? Thanks for the laugh 😉

    Reply this comment
  18. Edward Steele, Chief Investigator
    Edward Steele, Chief Investigator 12 September, 2012, 13:41

    LOL— of course I am out of my league!

    And your PhD came from where?

    The vast majority of PhD climate scientists agree with me. Your beef is with them not me little buddy!

    Aliens in Roswell?

    Thought so!

    Reply this comment
  19. Edward Steele, Chief Investigator
    Edward Steele, Chief Investigator 12 September, 2012, 13:42

    BobA— Sounds like you do think we have frozen aliens in Roswell—– good on ya!

    Reply this comment
  20. Ulysses Uhaul
    Ulysses Uhaul 12 September, 2012, 16:44

    Teddy get over them….they have spit fits…..that’s gosh!

    Reply this comment
  21. BobA
    BobA 12 September, 2012, 20:21

    Edward Steele:

    Poll 100 monkeys in a zoo about were bananas come from and they’ll all say humans. In your case, you would be inclined to agree with the monkeys irregardless of the where bananas really come from. That’s about the extent of your understanding of science.

    So have a banana and stop throwing you crap at the spectators or you might not get another banana.

    Reply this comment
  22. BobA
    BobA 12 September, 2012, 20:31

    Ulysses Uhaul:

    Neo-Marxists are known by the nom de guerre “Progressives”. It’s the same agenda of old but under new management.

    Reply this comment
  23. Ted Steele, The Decider
    Ted Steele, The Decider 13 September, 2012, 06:48

    Bobah– There is no word in the English language- “irregardless”. Sorry. Please summon all of your skills to post out here with the educated folk.

    You are a hammer and the small world you see is all nail. You are a one note samba…….zzzzzzzzzzzzzzzz

    Ted– Your mentor

    Reply this comment
  24. BobA
    BobA 13 September, 2012, 09:07

    Ted Steele:

    Pardon my “faux pas” s’il vous plaît. My American Heritage College Dictionary say that “irregardless” is non-standard and I should have used “irrespective” so touch’e for you.

    I’m a sledge hammer and I enjoy whacking thumb tacks like you.

    One note? I’m a full symphony whereas you’re a monotonous drip from a leaky faucet!!

    Bob -your superior (but you can call me your highness!!)

    Reply this comment
  25. Edward Steele, Chief Investigator
    Edward Steele, Chief Investigator 14 September, 2012, 14:40

    Bobah— You continue to have delusions of adequacy. Take two tax cuts, a regulations roll back and call me in the am.

    Dr. Ted– Your mentor.

    Reply this comment

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