There are liars, damned liars and then there are Sacramento politicians.
Those 11 words rang true once again with the passage of the $97.1 billion state budget for the fiscal year starting July 1.
It has been passed off as being fiscally prudent with no smoke and mirrors.
It includes a $500 million “loan” from the proceeds of cap and trade auctions that were established as fees to underwrite efforts to clean California’s air.
Instead of just a straight-forward lie, the $500 million maneuver qualifies as a triple flip lie. Businesses were told the money was needed to finance pressing clean air initiatives. It was sold as a fee and not a tax which meant their use was supposed to be legally restricted for the purpose they were collected. And it is no more a loan than claiming Stockton is the most solvent city in America.
A loan to people who aren’t politicians means there is not simply a wish to pay it back but that it will be paid back.
That’s not how loans involving the hijacking of taxes, bond proceeds, or “fees” work in Sacramento.
Remember the floods of 1997 that struck parts of Northern California? It was a dry and warm January following an exceptionally heavy snowfall during December in the Sierra. The resulting premature snowmelt overwhelmed weak levees causing widespread flooding.
The partial solution was in the form of Proposition 13 (not the property tax initiative) that voters approved in 2000. It addressed water storage, water quality, and flood control funding.
Strong political interests – read that coastal and urban California – made sure the portion of the $1.97 billion going for clean drinking water, water quality, and water storage was spent for what it was earmarked. Not so for $292 million in flood protection since all of those projects were in Northern California and the San Joaquin Valley.
Instead, that $297 million plus some other unspent money from the bond went to plug a hole in the state budget in the form of a “loan.” Does that sound familiar?
It was supposed to have been paid back years ago but not a cent has been returned to the bond account.
It just happens about $30 million or so was supposed to address flooding issues on the San Joaquin River between Vernalis and Mossdale. Specifically, the funds were supposed to see if anecdotal evidence that silt build-up since the 1950s for Westside irrigation run-off had raised the bottom of the river by as much as seven feet was the main culprit for flooding. If so, an official certified study could open the door for what many believe is the ultimate and obvious solution – dredging – to avoid repeats of the 1997 floods that caused $100 million in damages, damaged 2,000 structures and forced more than 2,000 people to flee.
The state, so far, has not paid a cent toward solving perennial flooding problems along the San Joaquin and Stanislaus rivers despite convincing voters they would be addressed if they approved a $1.97 billion bond. Of course, if the state legislature ever pays it back as they said they would, something might happen.
The rationale at the time was there couldn’t be flood control without water policy so therefore the “loan” was justified to cover Department of Water Resources operating expenses.
Conveniently, there is no project for cap and trade funds to underwrite currently to clean California’s air that would require the $500 million that is being “loaned” to the state’s general fund.
This, of course, involves more lying. Air quality is supposed to be so pressing of a need that California introduced a unique and expensive burden on businesses to pay for the sin of polluting the air. The cap and trade measure has a chilling impact on job production and drives up the cost of not just doing business in California but living here as well.
Yet there is no need currently for $500 million to improve air quality.
So now we have the truth. Cap and trade is simply a tax and not a fee as the definitions of such have been established by court rulings.
As for the “loan,” expect it to be paid back when Death Valley is covered with glaciers.
This column is the opinion of Dennis Wyatt and does not necessarily represent the opinion of The Journal or Morris Newspaper Corp. of CA. He can be contacted at firstname.lastname@example.org or 209-249-3519.