Loren Kaye’s piece yesterday did a very good job of outlining one of the less publicized elements of items under consideration at the Governor’s Commission on the 21st Century Economy, a proposed Pollution Tax. As the author of that item, I would like to add a couple of thoughts.
First, the idea of modernizing our tax system should, as directed by the Governor in establishing the Commission, both reflect the current composition of California’s economy, and the future to which we aspire. One of the clear aspirations we have as a state is to be part of the solutions to global climate change, especially reducing Green House Gas emissions. Perhaps the enduring legacy of the current state administration will be their very positive and aggressive public policy efforts to reduce GHG’s, and establish California as one of the primary centers in the world for developing and taking climate change solutions to market (think about Tesla and the many other California-born ideas in this regard).
Second, the idea of having a tax reform package that supports the creation of new jobs, rewards work, and encourages the formation of capital, is at the heart of what the Chair of the Commission, Gerry Parsky, is trying to accomplish. He and other Commissioners are working on elements of the package that speak to reforms of the existing state Personal Income Tax system, the Bank and Corporation Tax, the Sales and Use Tax, and a possible Business Net Receipts Tax. Additionally, the Commission has included a Pollution Tax in the mix of ideas that are working their way into the final package.
Third, as an individual Commissioner, I am holding a series of working group meetings to develop the best pollution tax we can. In this instance, “best” means a tax that will at least partially internalize the currently externalized costs of burning carbon-based fuels (reduced agricultural production, increased public health costs, acidification of our coast and oceans, and more). Such a tax should also have some impact on consumption, and help open the markets for cleaner burning vehicles and renewable transportation fuels. The next working group meeting will be held on Tuesday, August 25, 2009 from 9:30 a.m. to noon, at the headquarters of the state Board of Equalization, 450 N Street, Sacramento. Please feel free to attend.
At our last working group meeting, held on August 18, 2009, a wide range of interested parties (including representatives of oil companies, transportation interests, state and local government groups, environmental organizations, state Senate and Assembly tax and revenue staff) worked on a Pollution Tax that would add 18 cents per gallon to the existing tax. These funds would be used, according to Article XIX of the state Constitution, for state and local transportation system maintenance. We are also trying to see if we can help implement SB 375, Senator Steinberg’s landmark smart growth statute, in ways consistent with the Constitution. Legislative Counsel will have a bill draft for us all (including you) to review at our meeting on the 25th.
As we attempt to modernize California’s very out of date tax system, many of us on the Commission hope that a Pollution Tax will be a part of that effort. It would reflect in tax policy the state’s established public policy of moving toward cleaner fuels and a healthier state, both in terms of human health and the health of our economy.
Again, I appreciate Mr. Kaye’s piece, and Fox and Hounds’ invitation to write this piece.