February 7, 2018

Cap And Trade In California Looking More Like A Tax Now


Orange County Register Columnist Susan Shelley wrote this week that the myth that California’s cap and trade system isn’t a tax is coming apart quickly:

The veneer that keeps everybody from seeing that the cap-and-trade program is really just a tax is coming unglued.

A state appeals court previously ruled cap and trade was not a tax because businesses were not required to pay it. According to the court, businesses had the option of lowering their carbon emissions to avoid paying fines despite the fact that doing so might put them out of business.

One key issue is that the California state government has spent cap and trade revenue on projects unrelated to the environment and treat the revenue as if it were general state revenue. Gov. Jerry Brown (D) has been able to use cap and trade revenue to pay for his priorities, including a high speed train which he is prevented by law from funding with tax increases.

Los Angeles Mayor Eric Garcetti (D) recently announced that the Jordan Downs public housing development would be refurbished with $35 million in revenue coming from cap and trade.

Nonpartisan legislative analysts have stated that cap and trade has increased gas prices for California drivers, and gas prices will continue to increase as cap and trade requirements become more stringent over time.