A California Chamber of Commerce-opposed-unless-amended bill that will increase costs and place regulatory burdens on businesses passed the Senate Environmental Quality Committee this week.
SB 43 (Allen; D-Santa Monica) increases electricity rates and cost of transport by proposing to duplicate existing climate policy with a carbon-based sales tax, and threatens retail and manufacturing jobs by creating a cumbersome and arbitrary regulatory process. The bill proposes to create a new regulatory scheme to measure the “carbon intensity” of every product sold in California.
In testimony to the committee, CalChamber Policy Advocate Leah Silverthorn said that while the CalChamber appreciates the desire to study carbon intensity, sales tax touches almost every part of the state’s economy. Due to the substantial economic impact, the CalChamber believes it is imperative that the study:
• Evaluate mechanisms to ensure that a retail carbon tax avoids a regressive impact on low-income individuals and communities, and whether it is fair to apply a carbon-based tax to retail goods but not other sectors of the economy.
• This bill has a stated intent to “encourage the use of less carbon-intensive products.” This study must evaluate the impact on transportation infrastructure funds that would result from a decrease in fuel usage, and how such deficits would affect California’s transportation system.
• Consider the impact and efficacy of replacing all carbon-based programs, including impacts on the various programs currently funded by cap-and-and trade.
• In addition to the changes proposed above, the study also should: evaluate impacts on sales and use tax revenues; expand core purpose of study to include economic impacts to business; consult with all agencies affected by a sales tax to carbon tax swap; consider retail barriers; determine evaluation parameters; and include input from entities subject to a new carbon tax.
Key Vote
SB 43 passed Senate Environmental Quality on March 20, 5-2:
Ayes: Allen (D-Santa Monica), Hill (D-San Mateo), Skinner (D-Berkeley), Stern (D-Canoga Park), Wieckowski (D-Fremont).
Noes: Bates (R-Laguna Niguel), Stone (R-Riverside County).
