California lawmakers are turning cap-and-trade into the slush fund critics long feared

From the LA Times

For years, critics of California’s cap-and-trade program have lambasted it as a government slush fund. They say that politicians are able to dip into it to fund their pet projects or raid it to fill the shortfall of the moment — as long as they can assert a mildly credible connection between the spending and the state’s ambitious goals to fight climate change.

Well, California lawmakers are about to prove those critics right.

They needed money but were too frightened politically to be honest about it.

As part of the budget negotiations, lawmakers shelved Gov. Gavin Newsom’s controversial “water tax” that would have raised $140 million a year to help low-income communities finally clean up their contaminated water systems.

Who needs to get money when there’s this big pile over there.

Instead, lawmakers plan to fund the much-needed water cleanups with $100 million a year in cap-and-trade dollars — money that is paid to the state by polluters and which is legally required to be spent on projects to reduce the greenhouse gases responsible for global warming.

Of course the money is supposed to be used for greenhouse gas or other climate disaster mitigation.  But the politicians find a way.

So how do leaders justify using cap-and-trade dollars for water cleanups? Newsom’s office said that communities with tainted water need bottled water delivered in trucks that pollute the air. If the water supply is cleaned, that will reduce vehicle emissions.

By that ludicrous logic, California could pay for expanded Medi-Cal benefits with cap-and-trade dollars too, because if people have preventive healthcare, they’ll get sick less and drive to the hospital less and produce fewer greenhouse gases.

Read the full piece by the LA Times Editorial Board here.

93 thoughts on “California lawmakers are turning cap-and-trade into the slush fund critics long feared

  1. The money might as well be used to clean up water because it will never have any effect on the climate.

  2. It’s amazing how proud Californians are of being dysfunctional! Who thinks it’s a good idea to dig deeper when you are in a tax-deficiency hole? Californians, at least Sacramento south, make circular firing squads look intelligent. It looks like they are waiting for the next Democrat President to bail them out.

    • Californians must continue to lie to cover their previous lies. They will never accept that they were and are wrong.

      Alas, Communism creeps in on cats feet.

  3. Fear? Use as a slush fund was understood by both sides as a certainty. Why pretend otherwise? For the foolishly ignorant?

    • It could have been used to channel more money to the likes of Warren Buffet, who has been up front about saying that renewable energy is all about the subsidies.

  4. When critics point out flaws and proponents claim that would never happen but take no concrete steps to ensure it will never happen, the “flaw” is the intended feature.

    • Don’t be dense. There wasn’t a darn thing the Republicans could do to stop the tax or even restrict the use of funds. The Demonrats hold super-majorities in both houses.

      • And their ‘jungle primarily’ ensures that the Democrats will have a super majority forever. Except for the climate California looks more and more like the Soviet Union every day.

      • I don’t think Coach said that the Republicans were at fault too. Just that the problems with the cap’n trade program were made aware to the govt, but govt didn’t do anything to stop the problems.

    • Especially when they don’t fix it afterwards, when even the partisans can no longer pretend it’s working as they claimed it would.

      Cases in point: Bush and the Patriot Act, Obama and …anything, really.

  5. Since it is only in the $0.1 Billion range, cap-and-trade funds are useless for “needed” climate change efforts (ha-ha). High-speed rail was stopped due to paltry $10s of billions too much, but the promised climate change efforts (100% renewables) will cost in the $Trillions (maybe 10 or more, and still not work). Might as well make use of whatever money can be stolen now, and hope somehow the $Trillions will appear in the future (likely after current politicians are gone anyway).

      • Naw,
        Most all Socialistic Republics are labeled with “Democratic”
        The Democratic Peoples Republic of Korea DPRK
        The Democratic Peoples Republic of China
        The Democratic Peoples Republic of The Congo
        The Democratic Peoples Republic of Laos
        Those regimens that are more socialist use “Democratic” in their names.

        • It’s like the term science. A subject that has science in its name isn’t science. Political science, military science, social science, climate science – none of these use the scientific method.

  6. It doesn’t matter the source of revenue; the politicians will always siphon it off into whatever profits them the most (monetarily, power wise, votes). So-called “mandated uses” only force them to jump through a couple more hoops.

    Not just a symptom of socialist-working-on-communist States, either. Here in Arizona (even when it was a bright “red” State), I’ve watched these diversions going on ever since I became “woke” enough to notice. Lottery revenues, hunting and fishing licenses, tobacco tax hikes – all supposedly “mandated” to specific purposes. Very little is actually used for those purposes.

    • A few decades back, some politician tried to defend his breaking a No New Taxes pledge by declaring he wasn’t supporting a new tax, he was raising the rates on an existing tax.

    • Exactly what happened to the so-called Social Security Trust Fund. Raided and spent to cover debt.

      The trust was honored in the breach.

          • Allen W. Smith is a Ph.D. academic economist, Mike. More knowledgeable than you.

            Here is Merrill Matthew’s discussion of the Social Security fund at Forbes.

            His central point is, “the federal government has borrowed all of that trust fund money and spent it … the only way the trust fund can get some cash to pay Social Security benefits is if the federal government draws it from general revenues or borrows the money

            Posting a table of nearly meaningless numbers doesn’t make your point. Neither do your bald assertions.

          • Pat Frank says: “the only way the trust fund can get some cash to pay Social Security benefits is if the federal government draws it from general revenues or borrows the money”

            That is not true. The federal government gets cash to pay benefits from the FICA payroll taxes it levies.

          • Oh, by the way Pat Frank, did you know that the Federal Reserve can trade the IOU’s the federal government gave to the Social Security Trust fund for cash.

          • All diverted money because there’s no cash left in the SS trust fund CdL. That was the point.

      • There was never a “trust fund” in the sense that most people understand it, as being a sequestered account containing monies dedicated to a particular purpose. Every dollar not spent on current beneficiaries was used to purchase a special Treasury instrument that is available only to the SSA but acts just like a long-term Treasury bond. Income from the purchase of Treasury bonds becomes part of the general revenue pool, and that is also the fate of excess Social Security payments.

        • Just to make this really simple: the Social Security Administration for years collected more money in FICA payroll taxes than it needed. It borrowed the excess to the Federal Government, which gave them a fancy looking I.O.U. in return. The Feds then spend that money however they wished (it just went into the general fund). Now, with more Baby Boomers retiring the SSA does not collect enough in FICA taxes anymore to meet it’s monthly obligations, so it will have to start cashing in those I.O.U.s to make up the difference. Where do you think the Federal Government is going to get that money go pay them back? They will either have to raise taxes, or cut other programs, or likely both.

          All this time the Feds pretended that they had “invested” the excess FICA taxes, but really they just moved it from one pocket to another. It’s as if you had borrowed money to yourself and then spent it. Can you really claim that the I.O.U. you wrote to yourself has any value? Yet, as strange as this sounds, this is exactly what the government did. And most people have no idea they were fooled.

          • Excellent summary, but you missed one funding option – more borrowing. Borrowing is already occurring because SS in now running a deficit and must redeem the IOUs. Those IOUs will be exhausted by 2035, but the need for more borrowing will escalate each year as the IOUs are redeemed at a higher rate.

            This borrowing will have to take place because pushing the full cost of SS onto the taxpayer would get the politicians voted out of office. Cutting benefits would get them voted out as well. Better to quietly borrow more money. Of course, eventually the money spent on interest payments will overwhelm the federal budget that there will be a reckoning whereby taxes are increased and other programs cut.

  7. Here in British Columbia we HAD a “revenue neutral” CO2 tax. Well to no one’s surprise guess what? It’s now general revenue! Wow, who could have seen that coming?? The hypocrisy of the AGW crowd is a bottomless pit, just the way they seem to think my wallet is…

    • Just last week, several of our trolls were defending carbon taxes with the claims that they were guaranteed to be revenue neutral.

      • But they are. They take $500 per year from you and give it bacl to yout less fortunate neighbor (aka Government)

        • No, it is more of giving your less fortunate neighbor $245, after paying the salaries of the administrators.

    • Isn’t it amazing how politicians can swiftly repurpose money with a few strokes of ink on a piece of paper? And yet, the populace has no ability to hold them accountable.

  8. “…capturing methane pollution from dairies.”?? Good luck with that one. The more pollutants they can invent, the more the climate is victimized, the more taxes can be levied. Vicious cycle.

  9. “Instead, lawmakers plan to fund the much-needed water cleanups with $100 million a year in cap-and-trade dollars — money that is paid to the state by polluters and which is legally required to be spent on projects to reduce the greenhouse gases responsible for global warming.”
    Translation: State extortionists plan to fund water cleanups with $100 million in extortion money – money paid to the state by the providers of energy and by business and industry as part of a fraudulent scam punishing CO2 which is responsible for a greener planet and maybe, just maybe, a very slight, totally beneficial warming.

  10. Why don’t they tax stupidity, short-circuiting belief in AGW, and raise a whole lot more money?

    • That’s exactly what they are doing.
      The entire premise of AGW is a tax foisted on the stupid and ignorant.

      • “The entire premise of AGW is a tax foisted on the stupid and ignorant.”

        FIFY: The entire premise of AGW is a tax foisted on everyone, by the stupid and ignorant.

        • “The entire premise of AGW is a tax foisted on the stupid and ignorant.”

          FIFY: The entire premise of AGW is a tax foisted on everyone, by the stupid and ignorant.

          The entire premise of AGW is a tax forced on everyone, foisted by the stupid and ignorant, fermented and fertilized by the 1% who end up with the money taken from everybody else.

  11. The essence of cap-and-trade is that the poor (consumers) pay money to the rich (owners of “carbon sinks”)

      • You mean the logic of EV subsidies in general (although I doubt many Tesla Roadsters were bought solely on the basis of the $7500 rebate – which goes to the owner, BTW, not Tesla).

  12. If the LAT editorial staff is somehow surprised that the cap-and-trade tax fund has become a general slush fund, they are about as clueless about politicians as any newspaper editorial staff can possible be.

    https://www.ocregister.com/2019/06/13/californias-high-speed-rail-is-the-very-definition-of-a-boondoggle/

    Now add in the high-speed rail boondoggle (see link above), California’s high homelessness rate and its high electricity rates. What I am left with is enough evidence to more than reinforce my cynicism of politicians in general and Democrat-led states in particular. For all the good that people may believe that politicians do, those politicians also produce more than enough reasons for others to put them on the same level as con artists.

    • I trust most con artists more than politicians. They are at least honest after the fact that all they were after was stealing your money.

  13. Proponents of a carbon tax have said that the impact on the poor would be mitigated by reimbursements back to them. There’s a majority of Californians who barely make it month to month, and they’re paying 4$ a gallon or more for gas, and twice the National average for electricity as well as all the myriad of hidden costs of high energy prices. God knows why we keep electing the same morons year after year. But we do.

      • OR they keep bringing in new ones.

        One of the primary purposes of ‘sanctuary cities’.

    • God knows why we keep electing the same morons year after year. But we do.“. What God knows is this: If the government reaps say a commodity tax from companies, and with fanfare pays some of it to some individual citizens, then those citizens will vote to re-elect that government – even if the tax actually costs them more than their handout. That’s because they see only the handout, not the indirect tax. If there are enough such citizens, then the government keeps getting elected.

      The same governments will tend to be in favour of things like unlimited immigration, because those immigrants will very likely join the hand-out queue and therefore end up voting for that government.

      The process lasts until there is no more money.

  14. It might as well be a law of nature. Give a politician a pot of money, and he/she will always find a way to divert that money so that it benefits the politician.

  15. The CBC now for months has been promoting the climate change agenda, in particular since the Trudeau Liberals are up for re-election. The CBC is now launching a full effort called “In our Backyard” https://www.cbc.ca/news2/interactives/inourbackyard/index.html in order to ramp up the climate issue.
    In this series, a loss of an elderly during a heat wave, the loss of a house during a fire or a flood and coastal erosion, selected events are presented playing first and foremost on the emotional and not the rational. This has the hallmark of propaganda not information.
    Today, a flurry of separate articles are setting up strawman by willing journalists:
    https://www.cbc.ca/news/technology/cbc-explains-what-is-climate-change-1.5175642
    “Climate change and global warming — are they the same thing?
    Not exactly. Global warming refers to rising temperatures, which is only one aspect of climate change. Climate change is a broader umbrella term that captures the effects of greenhouse gases, but these gases affect more than just warming temperatures, said Laura Coristine, a conservation biologist at the University of British Columbia Okanagan.
    Climate change encompasses a wide range of atmospheric variants, including rising temperatures, forecast unpredictability, extreme weather events and natural disasters such as wildfires, floods and droughts.”
    Visibly this journalist has never heard of, even less read Curry’s climateetc…
    Or that one https://www.cbc.ca/news/business/it-s-a-problem-for-society-climate-change-is-making-some-homes-uninsurable-1.5173697, bypassing historical flood level references in order to only refer to the usual “dollar” losses, a typical skewing that Roger Pielke jr. has denounced
    The same had already proven on BC forest fires where the western Canada biggest fire Chinchaga 1956 fire is conveniently located only in Alberta so BC statistics can look even worse.
    In April 2019 as the Canada Climate Change Report was released, a CBC journalist used the infamous Nature cover of Antarctica warming illustrating the Steig et al. 2009 paper without mentioning this paper had been refuted by O’Donnell et al. 2010 https://www.cbc.ca/news/technology/climate-report-1.5081643
    The most alarmist scientific papers are highlighted and every aspects of meteorology are systematically tied to climate change with dubious and incomplete explanations, such as on Arctic warming https://www.cbc.ca/news/canada/north/historical-high-temperatures-territories-1.5063243 obfuscating that these 21 C warm temperatures in the NWT are a consequence of a March 20th brutal minus 43 polar air mass descent. And rather than correcting their initial misleading article, they followed up with this “Should we blame the NWT warm March on climate change? One researcher says yes” without addressing the intricacies of atmospheric circulation. So much for information!
    CBC does not seem to find any scientists providing a different opinion. In fact, CBC has participated in the lynching of Dr. Susan Crockford in 2018.
    So when Mark Harrison, executive producer of CBC News Content Units, today justifies CBC’s biased coverage of the climate through claiming that “The environment is shaping up to be major issue in election year” while rehashing the usual alarmist lines that the Liberals in power have been carving now for months , one wonders who this public media works for.
    Even worse, this producer, appearing with the circumstantial stern face supposed to make all of us partake into the planet saving alarm, justifies their worse effort at brainwashing all segments of the population “In Our Backyard is an ambitious and comprehensive CBC News project about how climate change is affecting our lives. You’ll see and hear it wherever CBC News is… online, on television, on the radio and on CBC Kids News, because Canada’s youth care deeply about this issue.” I.e. the gullible voting youth is targeted. https://www.cbc.ca/news/technology/climate-change-editor-note-1.5175490
    And as usual, it is all about money and behaviour… “But irreversible doesn’t mean unalterable. The United Nations’ Intergovernmental Panel on Climate Change (IPCC) said there is also “high confidence” that risks in the future can be reduced with action.”
    Pay up, give up you lifestyle, to save the planet, make Trudeau Great Again and believe the CBC is an independent news outfit!
    And then, cherry on the cake, comes the article about water usage in Metro Vancouver… https://www.cbc.ca/news/canada/british-columbia/vancouver-water-restrictions-1.5176561 forgetting that politicians of all stripes have not built any new water reservoirs despite a doubling of the population over the last 35 years, from 1.2 million in 1981 to 2.4 million in 2016! But blaming their incompetence on climate change is much easier and requires no serious investment in citizens’ well-being… Shame indeed!

    • Why, yes it is. It’s not just your imagination. link

      Folks without college degrees are leaving because of the cost of living. The rich are leaving because of taxes. California is gaining people with college degrees who can afford the real estate and aren’t too worried about taxes yet. They’ll be next. California will be left with a disproportionate load of people on welfare. Ask Detroit what happens after that.

  16. The new entertainment industry of California is in watching it from a safe distance with popcorn and laughs.

  17. If you go back in a few years and investigate you will most likely find:

    (1) the contracts to “fix” the water systems were awarded to politically connected companies. These companies are shell companies owned by relatives of the politicians in a disguised fashion. The real work is contracted out to real companies who pay a portion back to the shell company. Or these companies are making kick-backs to the politicians in the form of generous campaign contributions.

    (2) after the water systems were “fixed” the water systems were no safer and the water no cleaner than before the contracts. The point is the money in the contracts, not the need for the work.

    (3) The communities who get the contracts are not actually poor communities. They are communities in the home district of the politicians over-seeing the program. The money is allocated based on political clout.

    (4) There will be glowing reviews of the program with exaggerated claims of what was accomplished. The reports will be larded with sociological jargon. And the news media will eat it with a spoon.

  18. It would not surprise me if major corporation decides to move their home office. At some point Cal’s goverment will have to them pay higher taxes.

  19. Name one bureaucracy that ever said “we fulfilled our purpose, so you can now shut us down to save money.” Name one bureaucracy that ever said “our budget is too big, decrease it.” That will never happen because if it did, the people in that bureaucracy will need new jobs. So the solution for them is to never solve a problem until there is one or more to replace it, even if one has to be invented. The result will always be an ever increasing bloat in government. And when a politician suggests that a bureaucracy be reduced or eliminated, the people in it start caterwauling and claiming how important they are.

    Another problem, people in bureaucracies do not really understand how to spend money well. In a business, you have to earn money. Therefore you understand how hard it is to obtain, thus you understand how to spend it wisely. In a bureaucracy, you take money. It was never earned. Lifelong bureaucrats do not understand how hard it is to get, thus they waste. Obviously there are exceptions to this principle. And this is not to suggest bureaucrats are corrupt. It is meant to say their life experience is different so they have a different way of looking at money. This also results in progressively more and more waste, and thus more bloat.

    • Name one bureaucracy that ever said “we fulfilled our purpose, so you can now shut us down to save money.”

      the “Bundesanstalt für vereinigungsbedingte Sonderaufgaben” formerly known as “Treuhandanstalt”. It was responsible for dealing with the former state-owned (by East-Germany) industries, commodities and finances…

    • Name one bureaucracy that ever said “we fulfilled our purpose, so you can now shut us down to save money.”

      Name one bureaucracy that ever said “our budget is too big, decrease it.”

      Robert Mueller Investigations.

      Nanci Pelosi Indictments.

      Freddy Mac, Fannie Mae, Lehmann Brothers.

      https://www.google.com/search?q=freddie+mac+fannie+mae+foreclosures&oq=freddy+mac+fanny&aqs=chrome.

      Angela ‘angie’ Merkel, Bundeskanzlerei.

      Alexandria Occasio-Cortez independent Home Paging.

  20. Starting in 2014 Southern California Edison would randomly give users what they called a “rebate” that for me would reduce a monthly bill by as much as 85%. An explanation letter would come with the bill saying they hoped I would use the windfall for ‘energy saving’ investments but no one was checking so it could be used for anything. In the meantime our rates steadily increased due to taxes associated with “infrastructure, maintenance, and renewable costs”. So they taxed us more under the auspices of spending it on renewables and by state law they had to spend it on renewable improvements or return it. Tax, then return. Looks like that will stop with our new Progressive “woke” governor who is putting the finishing touches on turning California into a openly Socialist state…… except for high tech. After all, they help to put him in power and keep him there.

  21. Corruption = Government = Socialists = Democrats = MSM = Academia = Silent Science = CAGW = Entertainment Industry = Crony Renewables Capitalists = Big Data = Economic Destruction = liberty lost = revolution

  22. “I’m shocked, shocked to find that gambling is going on here!” (The croupier hands him his money.) “…Your winnings, sir.” “Oh, thank you very much!”

  23. This is just normal for progressives. They believe the State owns everything, including all the money. The State is benevolent, the State knows best and has the answer to everything. If you are against the State you are to be eliminated.
    Ever notice how that falls in line with fascism : authoritarian ultranationalism characterized by dictatorial power, forcible suppression of opposition and strong regimentation of society and of the economy

  24. Anyone who moves to California should be given an orientation kit, which would include knee pads, a tube of KY jelly and a diagram showing the proper orientation.

  25. Imho there’s a single cause for the unbridled criminal insanity – the web of deceit we call The Media. And a coordinated effort to expose its true nature and free the unbridled TRUTH will set us all free.

  26. If they can steal more money from their people, then they will find more ways to spend it. It never ends – well, until the state goes bankrupt of course. This is how socialist states are created – at the willingness of their people while things are going well.

    By raising all this new spending now they are setting themselves up for a spending disaster when the economy hiccups. The solution of course will be to raise more taxes.

    If you are an industry in California, you need to prepare to flee now.

    • There are a lot of socialists who want to punish any person or company that tries to escape their grasp by seizing most of their assets, and or making it impossible for them to return/do business with the US.

  27. If you are going to spend other people’s money, “ what difference does it make?

    Did I plagiarize there?

  28. Would you believe that in the province of Quebec, which shares its cap and trade program with California, we had the same problem with monies that were supposed to go to emission reducing initiatives? From an article in the Montreal Gazette: It was being managed in any old way people wanted,” Premier François Legault told reporters Wednesday reacting to the report. “There were several ministries dipping in (to the fund) and no optimization in terms of reduction of greenhouse gases.

  29. They could start an obesity campaign where everyone is encouraged to gain weight and sequester carbon. Those seen working out and therefore exhaling too much CO2 could be charged a carbon tax to pay for food for the homeless so they can gain weight and sequester carbon for the fit people. This would probably pass in CA.

  30. Climate change has always been about a new tax. Man does not control CO2 or the climate.

  31. Who among us actually knows or mixes with one of these destructive bureaucrats who write and enforce these regulations that are so often criticised?
    One might imagine two separate groups, the f****s and the f****d, about whom the latter know little about the former and vice versa.
    I spent some years in industry in Oz managing Government business and I cannot recall meeting more than about 3 of the bureaucrat class. Not a large enough base to make generalisations. Seemed like nice people, mostly introspective, did not give the impression of covert wickedness.
    Seems to me that there needs to be a stronger. more travelled path over this bridge. Are we suffering in silence, when a few private words between groups could head off emerging conflict?
    Do these Californian fund diverters know that their move is a sham, a dodge? Do they know it is unpopular? Do they sleep deep at night? Or do adequate messages get through to them to ruffle their complacency?
    Tell us some 1 on 1 interactions you have had. Geoff

    • They don’t listen to you unless you have money or can deliver votes. I have sent enough letters and made enough calls to know that they don’t listen. I sent a letter once to my representative and the reply had nothing to do with my letter. I sent another letter with his reply attached pointing out that he didn’t answer my letter. I got the SAME letter back. It was only when I threatened to write to the editor of the local paper pointing out that he pays no attention to what his constituents write, that he actually paid attention to what I had said and replied to my concerns.

  32. Cap and trade is a terrible tax because, in the end, it hurts the poor the most and the politicians are not honest about who is at the bottom of the chain of harm.
    However, I am much more in favor of actually doing something useful like cleaning water instead of funding harmful things like “green energy.”

  33. To Geoff Sherrington

    The collective apathy towards the homeless epidemic in Los Angeles is staggering- officially there are 58,986 people here receiving some sort of services from the city but the actual number is probably much higher. The mayor took a lot of abuse for opening a homeless shelter that houses less than fifty people at a time while campaigning to be governor last year; that’s the type of token gesture pervading the grossly overwhelmed bureaucracy here. The state of California gave the city over $85 million to address this emergency but the “covert wickedness” of those in power have prevented this money being used for homelessness except for a $2.7 million payout to the Skid Row area downtown that looks like a sidewalk tent district littered with trash and crap; this funding was given only because the city representative in that district pushed hard for it; perhaps he was the haunted in his sleep exception to the apathetic standard of his peers gobbling down $16 muffins at the snack bar during their ‘important’ board meetings while staying at luxury hotels on taxpayer money.

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