Our View: Bad budget news for Brown

The state's independent Legislative Analyst's Office warns that Gov. Jerry Brown relies on too much money from cap-and-trade taxes to shore up the state's beleaguered budget.

In his 2012-13 budget, the governor overestimates how much relief he can expect from businesses forced to buy "credits" beginning in August to permit greenhouse gas emissions. The 2011-12 budget fell billions short of Brown's projected revenue, despite his boast last year that it was balanced.

Brown should not count on $500 million from the controversial carbon-emission cap-and-trade revenue to bolster the general fund, the analyst's office reported last week. The analyst's office said there are "only a handful of programs — totaling around $100 million — that could potentially meet the above legal requirements."

Anthony Simbol, analyst's office deputy legislative analyst, told us cap-and-trade revenue may be used only to reduce greenhouse gas emissions. Brown's intention to backfill general fund shortfalls therefore must be limited to the qualifying $100 million, not the $500 million he projects.

But that makes it likely cap-and-trade revenue, which Brown estimates to be up to $3 billion a year, will spur additional, new spending, expanding the budget, rather than backfill shortfalls.

Brown recently suggested a major expansion of government spending with the billions from cap-and-trade taxes: the proposed high-speed rail system. The cap-and-trade scheme ostensibly was implemented to fight global warming. Instead, it is clear its primary purpose will be to shore up budget deficits, and expand government spending.