Tom Lackey
California State Assembly Member
Many already know that California is one of the most highly taxed states in the country. With the highest sales, income and gas taxes, it’s understandable why California also has one of the highest poverty rates in the country. The high cost of living here comes from our high tax structure and makes it very difficult for working families to make ends meet. Things have been particularly hard recently as taxes are constantly being raised on them. These tax increases come from California’s Cap and Trade program, yet most people have no idea they are paying them.
Under the complex scheme, companies pay for pollution credits from the program with the proceeds being redistributed to fund initiatives to that are supposed to reduce carbon emissions. Because companies pay for these credits directly, consumers often do not realize that the higher prices they are paying stem from Cap and Trade. Simple economics shows when taxes are increased on specific industries, the costs will be passed onto the consumers.
Everyday needs like electricity, gasoline and even products in the store are all more expensive today because of the $1 billion of hidden taxes the program has created. Low-income and middle-class families can hardly afford to pay some of the highest costs in the nation for daily necessities, yet the state is only increasing them.
This year, Governor Brown’s budget proposes spending $1 billion of Cap and Trade revenues on various projects—some which will do little to reduce carbon pollution.[1] The most egregious expense is the $250 million that has been allocated to the High Speed Rail project. A 2010 UC Berkeley study found that once complete, high speed trains could reduce pollution moderately but only if ridership is very high.[2] If ridership does not meet certain levels, the construction and operation of high speed rail could raise pollution overall. Despite this fact, every Californian is paying higher gas and electricity prices to fund a very risky project that will not make much of a dent in reducing pollution.
Only $75 million of the $1 billion in the Governor’s budget—less than 10% of Cap and Trade funds—is dedicated to energy efficiency upgrades for buildings. Simple solutions like modernizing old buildings to reduce energy consumption is one proven way to reduce carbon emissions, yet this is a low priority.
Not only do I strongly oppose the hidden taxes Cap and Trade has created in our daily lives, but I also believe it has become a billion dollar political slush fund that wastes the hard earned money of countless Californians. As one of the most expensive states to live in, California should give its residents a break and end the hidden taxes from Cap and Trade.
[1] http://www.ebudget.ca.gov/fullbudgetsummary.pdf
[2] http://www.uctc.net/access/37/access37_assessing_hsr.pdf