It’s California’s latest spending rush–and this time it involves carbon. For years, the Wall Street Journal has been reporting that cap and trade’s real purpose was to create another revenue stream for politicians while dodging accountability for raising taxes. Now Senate President Darrel Steinberg is suggesting that cap and trade revenues be used to finance the state’s $68 billion “bullet” train.
One problem: The cap-and-trade revenues must be used to reduce carbon emissions. According to one analyst, the train’s construction will do just the opposite; it will increase emissions.
An initiative that was once intended to reach green programs (e.g. solar subsidies) has morphed into a seemingly generally-accepted accounting principle of looting and raiding internal accounts to backfill the budget won. And with the state legislative analyst’s prediction that cap and trade will raise between $12 billion and $45 billion by 2020, it’s no wonder those sticky political fingers keep making their way back to the carbon cookie jar.
Just last week Journal revealed Senate President Darrell Steinberg’s proposal for a “long-term investment strategy” to divvy up the revenues from California’s cap and trade program, which requires businesses that emit more than 25,000 carbon metric tons annually to purchase permits for the privilege. About 90% of the permits are being given away for free while the rest will be auctioned off. Thus far the auctioned portions have generated $1.5 billion.
Last year Governor Jerry Brown last year “borrowed” nearly all of the auction proceeds for general-fund expenses. But the train doesn’t stop there. According to Journal, Mr. Steinberg now plans to raise Mr. Brown by spending future cash flows on his personal favorites: 40% for “sustainable communities” (i.e., affordable housing in urban areas); 30% for mass transit; 20% for high-speed rail; and 10% for roads and bike paths.