San Diego Government Officials Warn of Increased Costs and Lost Revenues from California Climate Change Policies
San Diego City and County will Lose $170 million in local tax revenue
Aug. 23, 2012
SAN DIEGO – San Diego City and County will be financially impacted over the next eight years by more than $260 million as a direct result of climate change policies under California’s AB 32 law. This according to a new case study commissioned by the California Manufacturers & Technology Association and made public today by San Diego government officials.
More than 3 million people reside in the County of San Diego, with the city of San Diego being home to 1.3 million individuals, the eighth largest city in the nation. The implementation of multiple programs, including a cap-and-trade auction that starts in November 2012, will force San Diego City and County to face severe financial impacts, including significant revenue losses and increased costs to local agencies.
The County and City of San Diego will suffer a significant decline in local tax revenues due to the economic slowdown caused by the sweeping regulations. The region’s small businesses will be hit the hardest under this regulatory scheme. Those businesses will lose $173 million in revenue over the next eight years and $59 million in 2020 alone – all a result of higher costs and financial uncertainty.
“The County of San Diego relies on its small businesses as part of its livelihood. Now is not the time to add more financial burdens to those who can put California and San Diego back on track to economic recovery,” stated Sam Abed, mayor of Escondido. “There must be a less expensive way to reach California’s environmental goals.”
San Diego County also provides vital services to its residents, most importantly, law enforcement for more than 930,000 residents. The implementation of these climate change programs will increase costs to the County by over $1 million in 2020 alone, the equivalent of the costs to employ 19 Deputy Sheriff’s.
“At a time when local governments throughout the state have to cut programs and services, there is not a feasible way for us to take on more costs,” stated Abed. “Our residents will be the ones affected by these new costly regulations in the form of cuts to vital services like public safety,” continued Abed.
The County of San Diego includes eighteen cities and employs nearly 16,000 individuals. However, out of California’s 58 counties, San Diego County currently has the tenth highest unemployment rate in the state.
“If we are forced to take on additional costs on top of millions of dollars in lost tax revenues, we will be forced to cut jobs. The County of San Diego simply cannot afford to see more residents out of work,” said Abed.
The study also shows that although electricity and water usage will decline each year due to greater efficiency, the costs for these municipal necessities will still increase by a total of $89.9 million cumulatively by 2020.
The San Diego Water Authority will face increased costs as well. Water agencies throughout the County will bear $75 million in cumulative water costs and $17.7 million in 2020 alone. In order for the County to endure these increases, these costs will undoubtedly get passed on to San Diego residents.
“From manufacturing to working families to state and local government services, the entire spectrum of our economy is hit by these regulations,” said Jack Stewart, president of the California Manufacturers & Technology Association. “It is critical that California takes a close look at implementing these regulations in a more cost-effective manner that is favorable for all Californians and our economy.”
The study conducted by Andrew Chang and Company titled, Fiscal Impacts of the California Global Warming Solutions Act of 2006 on San Diego’s Local Government, is an addition to the previously released study on the overall impacts on the economy. The studies can be found at www.cmta.net.