Resources Subcommittees Dig Deeper into Manufacturers' Pockets

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, May 23, 2003

With the ink still drying on the Governor's controversial "May Revise", budget subcommittees met this week to consider the implications of the Governor's proposals. Once again, the Senate and Assembly Resources Subcommittees are rubber-stamping recommendations from the Legislative Analyst's Office (LAO) to backfill General Fund cuts.

Of concern to manufacturers are recommendations to increase air emission fees on industrial plants, consumer products and paints by $5.4 million, and wastewater dischargers by $6.8 million. These new fees would be over and above the $10 million increase on air fees and $13.6 million on wastewater authorized by ABx1 10, signed earlier this year. The LAO is also recommending substantial increases for pesticide manufacturers and registrants.

With each new increment in fee increases, the "polluter pays" rhetoric cited as justification becomes more hollow. The most pointed example is the proposed increase on air emission fees which would be paid by about 200 sources to cover roughly half of the state's costs for a program that "benefits" thousands of sources statewide. Under ABx1 10, the financial contribution of these sources is already grossly disproportionate to their actual contribution to the state's air quality problems. The LAO's current proposals would exacerbate this problem. Moreover, the trend toward incremental restoration of General Fund cuts through fee increases relieves pressure on the agencies to prioritize their workload.

The LAO's current proposals are symptomatic of the continual piling on of new costs, in many cases on the same companies, with no consideration being given to the cumulative impact of these actions. The resources fee increases alone amount to several hundred thousand dollars for some companies. These costs are additive to massive increases in energy costs, workers compensation premiums and a host of other operating costs that are unique to California and are contributing to a rapid exodus of manufacturing jobs.

CMTA believes that a moratorium on new fees should be a component of an economic stimulus package that is tied to the budget, to help turn the state's economic tide.
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