Studies Predict AB 32 will Crash Calif. Economy
The hit to state residents will total $35 billion in 2020 — exceeding California’s combined revenue from sales taxes, corporation taxes, insurance taxes, estate taxes, liquor taxes, tobacco taxes and vehicle fees, according to a study by Andrew Chang & Company for the California Manufacturers & Technology Association. The average family will pay an extra $2,500 by 2020 due to increased energy prices.
Two new studies are predicting economic devastation in California as the myriad regulations and costs resulting from AB 32, the Global Warming Solutions Act of 2006, take effect in the next eight years.
The total cumulative cost to consumers will be $136 billion by 2020, according to the report. California’s gross state product will be reduced by $153 billion, representing a 5.6 percent decrease. That is roughly equivalent to California’s GSP loss in the Great Recession from December 2007 to June 2009. In addition, the state will have 262,000 fewer jobs in 2020 than if AB 32 had not been enacted. Total state and local tax revenues will be reduced by more than $7.4 billion annually in 2020.
These figures are based on an “optimistic” scenario, assuming a lower range for fuel price hikes and a higher range for energy efficiency the reduction in vehicle miles traveled. The actual costs could be much higher: California families could be paying an extra $4,500 annually, while state and local tax revenue could drop $39 billion by 2020.
“These policies will create a large but hidden tax on families and will add new burdens to a fragile state economy,” said CMTA President Jack Stewart. “This new tax is not what we need while Californians struggle to find jobs, meet mortgage payments and maintain a reasonable quality of life. This poses great risks to manufacturers and other firms competing in regional and global markets. Current data shows that California already is lagging the nation in new manufacturing investment because of other cost pressures and uncertainties. The Legislature must use this critical data to get control of AB 32 costs.”
Hardest hit may be the state’s businesses, particularly those in ..