California
Opinion | California will make less money from greenhouse gas emission auctions
By Dan Walters, CalMatters
This commentary was originally published by CalMatters. Sign up for their newsletters.
Two decades ago, when California got serious about reducing or even eliminating carbon dioxide and other greenhouse gases, its political leaders weighed two potential tactics about industrial emissions.
The state could impose direct facility-by-facility limits, generally favored by climate change advocates. Or it could set overall emission reduction goals that would gradually decrease and auction off emission allowances, assuming their costs would encourage reductions.
The latter, known as cap-and-trade, was favored by corporate interests as being less onerous and was adopted, finally taking effect in 2012.
Since then, the California Air Resources Board has conducted quarterly auctions of emission allowances, collecting a total of $35 billion dollars so far, which, in theory, is being spent on projects that would reduce emissions.
The revenues have varied from year to year, but they have generally increased as the emission caps have declined. Since reaching a peak of $8.1 billion in the 2023-24 fiscal year, however, auction proceeds have been declining.
Roughly half of the money has been given to utilities to minimize cap-and-trade’s impact on consumer costs. However, the program has been widely criticized as a de facto tax on gasoline and other fuels, which were already among the most expensive of any state.
The remaining revenues have been deposited into a Greenhouse Gas Reduction Fund that governors and legislators have tapped for various purposes, not all of them connected to emission reductions. In a sense, it’s been a slush fund.
Last year Gov. Gavin Newsom and the Legislature overhauled the program in two bills, Senate Bill 840 and Assembly Bill 1207. The program was extended, it was renamed as cap-and-invest and new priorities for spending auction proceeds were set.
Notably, the state’s cash-strapped and long-stalled bullet train project would get a flat $1 billion a year, rather than the 25% share it had been getting. Project managers hope that lenders will advance enough money to complete its first leg in the San Joacim Valley; the plan is to repay the loans from the $1 billion annual cap-and-invest allocation.
Early this year, the Air Resources Board released new regulations to implement the legislative changes but faced criticism that they would increase consumer costs. That led to a revision in April that softens the rules’ impact — most obviously on refiners who have been threatening to leave California — but environmental groups are very critical.
The April version would also sharply reduce net revenues from emission auctions, according to the Legislative Analyst’s Office, providing barely enough for the $1 billion allocation to the bullet train and another $1 billion for the governor and Legislature to spend. Other programs that have been receiving cap-and-invest support, such as wildfire protection and housing, would probably get nothing.
The program has been tapped in recent years to backfill programs that a deficit-ridden state budget could not cover, so the projected revenue drop would exacerbate efforts by Newsom and legislators to close the state budget’s yawning gap.
“The (Greenhouse Gas Reduction Fund) is a relatively small portion of the overall state budget, but it has been a noteworthy source of funding for environmental and other programs in recent years,” the state Assembly’s budget advisor, Jason Sisney, says in an email. “Collapse of its revenues would change the state budget process noticeably. The state’s cost-pressured general fund seemingly would be unable to make up much, if any, of a significant (Greenhouse Gas Reduction Fund) revenue decline at this time.”
When Newsom presents his revised budget this week, he may reveal how he intends to cover the cap-and-invest program’s shortfall, particularly whether he will maintain the $1 billion bullet train commitment that project leaders say is vital to continuing construction of its Merced-to-Bakersfield segment.
It could boil down to bullet train vs. wildfire protection.
This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.
Redwood Valley, Calif. — A 5.6 magnitude earthquake shook Northern California on Wednesday morning, according to the U.S. Geological Survey.
The quake was centered 7 miles north of Redwood Valley in Mendocino County, north of Ukiah, and east of Highway 101. It had a depth of 5.0 miles.
A ShakeAlert notification went off on many people’s phones moments before the earthquake hit at 8:10 a.m., initially forecasted as a 6.1 magnitude quake by the U.S. Geological Survey (USGS) and downgraded moments later.
People across Northern California felt the quake. Reports came in from as far away as Eureka, Redding, Sacramento, and the Bay Area. Most people reported light to moderate rolling and shaking.
Since the initial quake, several aftershocks have hit the same area. Three smaller quakes between 2.6-2.7 magnitude were detected in the same area between 8:17 a.m. and 9:06 a.m., and are expected to continue.
So far, there have not been any reports of major damage or injuries.
—
BE THE FIRST TO COMMENT
Report a correction or typo.
California
DOJ charges 10 Southern California defendants in largest federal healthcare fraud crackdown in US history
Laura Ingraham: Fraudsters beware!
The Department of Justice announces the largest healthcare fraud takedown in U.S. history, charging 455 defendants across 45 states. They allegedly stole $6.5 billion from Medicare and Medicaid through wound care schemes and other fraudulent claims. Some funds were used for luxury homes and vehicles like a $135,000 Maserati.
NEWYou can now listen to Fox News articles!
Federal authorities on Tuesday charged 10 Southern California defendants in a series of healthcare fraud schemes, including one case involving nearly $270 million in fraudulent Medi-Cal claims and another that allegedly defrauded Medicare out of approximately $27 million.
The charges were part of the Justice Department’s broader “2026 National Health Care Fraud Takedown,” which resulted in charges against 455 defendants nationwide in schemes involving more than $6.5 billion in alleged fraud.
Acting Attorney General Todd Blanche described the operation as “the greatest combined federal and state effort in combating healthcare fraud in history.”
“Fraudsters can no longer rip off American taxpayers,” Blanche said during a news conference announcing the initiative. “If you seek to harm or cheat Americans, we will find you, seize any assets and prosecute you to the fullest extent of the law.”
FBI ADDS 2 FUGITIVES TO ‘MOST WANTED FRAUDSTERS’ LIST AMID HISTORIC $6.5B HEALTHCARE TAKEDOWN: PATEL
Acting Attorney General Todd Blanche speaks during a news conference announcing what federal officials described as the largest healthcare fraud takedown in U.S. history, resulting in charges against 455 defendants nationwide. (Ken Cedeno / AFP via Getty Images)
In the Central District of California, federal prosecutors brought criminal charges against 10 defendants accused of defrauding government-funded healthcare programs or abusing their positions as medical professionals to illegally prescribe controlled substances.
The U.S. Attorney’s Office for the Central District of California said five individuals were arrested in the greater Los Angeles area for allegedly participating in a scheme that involved submitting nearly $270 million in fraudulent claims to Medi-Cal for expensive prescription drugs.
Among those charged was Christina Mareik, 61, also known as Christina Marie Sanchez Hernandez, of Whittier.
HOSPICE FRAUD USES STOLEN IDENTITIES FOR FAKE PATIENTS
The Justice Department announced charges against 10 Southern California defendants in connection with multiple healthcare fraud schemes. (Department of Justice)
Prosecutors allege Mareik helped facilitate fraudulent prescriptions that generated nearly $270 million in claims to Medi-Cal, which ultimately paid out more than $178 million.
According to prosecutors, the claims involved expensive drugs containing low-cost generic ingredients that were either not medically necessary or were never provided to the purported recipients.
Authorities said Mareik also sent thousands of fraudulent prescriptions to a co-conspirator and caused the submission of fraudulent prescriptions under her own name.
LOS ANGELES HOSPICE FRAUD REACHES BILLIONS AS MEDICARE PROVIDERS SCAM FEDERAL SYSTEM WITH FAKE COMPANIES
Federal prosecutors allege Southern California defendants participated in schemes that defrauded Medicare and Medi-Cal of hundreds of millions of dollars. (Department of Justice)
Mareik was arrested June 17 and charged with healthcare fraud.
The charges also include a San Fernando Valley man accused of operating hospice care companies that fraudulently billed Medicare approximately $27 million, according to prosecutors.
Prosecutors also charged Oren David Shachar, 59, of Van Nuys; Abraham Shin, 66, of Corona; and Jeannie Choi, 57, of Torrance.
The three defendants face a 16-count indictment alleging they conspired to defraud Medicare out of approximately $27 million.
CLICK HERE TO DOWNLOAD THE FOX NEWS APP
The charges include conspiracy to commit healthcare fraud, healthcare fraud, aggravated identity theft, monetary transactions involving criminally derived property exceeding $10,000, and violations of the Anti-Kickback Statute.
Fox News Digital’s Alexandra Koch contributed to this report.
The IPOs of SpaceX, OpenAI and Anthropic could deliver billions of dollars to California’s coffers.
We’ve seen this movie before.
In 2022, California recorded a nearly $100 billion surplus, saved just $10 billion in its rainy day fund and then spent the rest. Two years later, a $56 billion deficit loomed.
Now, with the state facing ongoing operating deficits of more than $10 billion, we’re back in familiar territory.
The coming IPO windfall is a rare second chance. But we’ll only benefit from it if we first fix the structural flaw that’s caused us to squander every previous boom — a budget reserve that isn’t built to hold what we put in it.
The stakes this time are higher than ever. The war in Iran raised recession risk, and the federal government is systematically dismantling the funding streams California has depended on for decades.
When Washington retreats, Sacramento has to choose: cut services, raise taxes or have enough saved to bridge the gap. Right now, we don’t have enough saved.
We’re not outside observers wringing our hands. We helped shape the fiscal architecture the state is now straining against, and we’re here to say: It needs to be rebuilt.
As California state controller, one of us campaigned alongside Gov. Arnold Schwarzenegger to pass Proposition 58 in 2004 — creating California’s first Budget Stabilization Account. The other authored the Assembly Constitutional Amendment that became Proposition 2 in 2014 — the stronger, harder-to-raid replacement that voters approved with 69% support.
California’s tax system is the envy of progressive states and the nightmare of budget directors. We tax the wealthy at high rates, capture enormous capital gains revenue in boom years and then discover — every single time — that the peak doesn’t last.
If California treats the IPO windfall from SpaceX, Anthropic and OpenAI as permanent revenue, our state would repeat exactly the mistake we made four years ago.
Gov. Gavin Newsom and Assemblymember Avelino Valencia have each proposed important reforms to strengthen the fund. First, they call for requiring the state to make deposits until the fund reaches 20% of the general fund total, rather than the current 10%. Second, they propose changing an arcane accounting rule that treats saving for future downturns as spending.
We see one additional opportunity to make the rainy day fund even stronger.
If we want a larger budget reserve, we have to do more than merely allow it — we need to require it. Proposition 58 taught us everything we need to know on this front: Between 2004 and 2014, with that proposition fund in place, only two deposits were made. If we want consistent deposits during the boom times, they can’t be optional.
These reforms should be a win-win for the California Legislature. A larger reserve is the most durable protection that public sector workers, social service recipients and education advocates have against the kind of emergency cuts that have repeatedly gutted programs during downturns.
It’s also the strongest argument against tax increases in a recession because you don’t need to raise taxes if you actually save during the booms.
Building a stronger rainy day fund isn’t the cautious choice. It’s the visionary one — the closest thing we have to investing in the next generation of Californians.
We built the last rainy day fund because we’d lived through the consequences of not having one. We’re making the same argument again, for the same reason except now the stakes are higher. This time, the federal backstop is weaker, and the next storm is closer than it looks.
Fix the fund this year. The next generation of Californians will thank us for it.
Mike Gatto served in the state Assembly between 2010 and 2016, and he authored the measure that created California’s current rainy day fund. Steve Westly served as state controller between 2003 and 2007, and he co-championed Proposition 58, California’s original rainy day fund. Westly chairs the 21st Century Alliance, a nonpartisan organization focused on solutions to the state’s most pressing challenges.
-
Michigan5 minutes agoMichigan heatwave on way. See day likely to set a record high
-
Massachusetts7 minutes agoMassachusetts man accused of wanting sex with girl busted in World Cup trafficking operation
-
Minnesota13 minutes agoVance Boelter’s sentencing date set in deadly Minnesota lawmaker shootings
-
Mississippi20 minutes agoMississippi youth court law puts families' rights at risk, lawsuit says
-
Missouri22 minutes agoFour years after Dobbs, Missouri abortion fight continues in court, ballotbox
-
Montana28 minutes agoUpdate: Missing family found safe north of Butte
-
Nebraska35 minutes agoTour de Nebraska bicycle ride begins five-day route in Hartington
-
Nevada37 minutes agoNV Energy issues PSOM watch for northern, eastern Nevada amid elevated fire weather
