‘Polluter class’ facing more tax increases

Nov. 12, 2012

By Katy Grimes

Now that Gov. Jerry Brown’s wishes have all come true with the passage of Proposition 30 and hefty tax increases, taxpayers and business owners are hoping that he has a heart and puts an end to the upcoming cap and trade auction.

However, hoping for change hasn’t worked out very well for the state’s business class.

A state agency most Californians have never heard of is about to impose a sizeable carbon tax on the state’s “polluter class.”

The California Air Resources Board, made up of unelected state officials and career bureaucrats, has been busy imposing costly regulations on California businesses.

The agency is able to do this thanks to the state Legislature.

When the Legislature passed AB 32, California’s Global Warming Solutions Act of 2006, a new era of government control and expansion was ushered in. CARB was given the authority to create strict new environmental controls over every aspect of  business and commerce within the state as well as the lives of California residents.

As a result of AB 32, CARB was given the authority to create a regulation to reduce passenger car greenhouse gas emissions. But it didn’t stop there.

CARB recently developed and now enforces strict diesel regulations on truckers. Most of California’s trucking companies, businesses which have shipping departments, and independent truck drivers were forced to purchase expensive new trucks at a minimum cost of $50,000 to $60,000 extra.

These diesel regulations are now being enforced with the help of the California Highway Patrol. I recently contacted the CHP to ask what its level of enforcement was for CARB, but none of my phone calls was returned.

Cap and trade

While the rest of the country was shelving cap and trade programs and backing off of selling carbon allowances to businesses because of the drastic national economic downturn, CARB forged ahead stubbornly and recklessly.

If the governor allows CARB to continue with cap and trade, California businesses will be forced to purchase carbon credits from the air resources agency in order to keep doing business in California.

When all is said and done, cap and trade is an environmental tax on business. Even the Legislative Analyst’s Office reported that cap and trade is not needed to lower greenhouse gas emissions in California, if that is the true goal of AB 32.

Despite pleas from California’s diverse business and industry sector to postpone the auction indefinitely, CARB appears to be determined to conduct the first auction on Wednesday.

CARB will hold auctions “to allow market participants to acquire allowances directly from ARB,” the CARB website says.

One business owner I recently talked with about the carbon auction is fearful. He knows that he is considered one of the “polluter class” of businesses, but said that he wants to tell Brown, “Get your boot off of my neck. I can’t breathe.”

More rumors

Rumors are still flying around that Brown may announce that the CARB cap and trade auction is postponed or off. There are several business groups that have talked seriously about suing CARB to force a halt to the auction, but nothing has been filed yet.

The Legislative Analyst’s Office explained in a letter to the Legislature that an allowance auction is not needed to meet the mandate of AB 32, and said that cap and trade regulation will greatly increase production costs for businesses forced to comply with CARB’s regulations.

AB 32 authorizes the governor to delay cap and trade for one year during a period of poor economic conditions. After Nov. 6’s passage of a $7 billion tax increase on Californians making $250,000 or more annually, a new statewide sales tax increase, a $1 billion tax increase on out-of-state businesses doing business in California, double-digit unemployment, and 4 million chronically unemployed Californians, economic conditions are already poor.