California Budget: Say a Prayer for the Pretender

By July 25, 2009Economy, Energy, Taxation

From Reuters, “California kills offshore oil lease project,” reporting on the elimination of revenue-producing language in the state budget agreement that would have also improved U.S. energy security.

LOS ANGELES, July 24 (Reuters) – The California state assembly killed a chance on Friday for the state’s first new offshore oil drilling lease since 1969, after the idea narrowly passed the senate earlier in the day.

The measure was defeated by a 43-30 vote in the assembly and was taken out of the budget bill approved on Friday that seeks to close a $26 billion budget deficit.

Plains Exploration & Production Co (PXP.N) had wanted to drill off an existing platform in federal waters into state waters. The project off Santa Barbara was to raise about $100 million annually for 15 years in oil royalty payments to the state.

The state had the opportunity to raise needed revenue under the strictest of environmental conditions, and yet said no. In another state, organized labor might have exercised its political clout in favor of jobs and growth (and even budget sanity), but in California, it’s the public employees unions that hold sway. The only thing they’re interested in drilling is the taxpayers’ wallets. So the environmental lobby gets its way.

Let’s look at those CNBC rankings again for top states for business. Ah, California. Business friendliness, and cost of doing business: 49th. The state actively discourages the creation of wealth.

It’s hard to escape the conclusion that California’s polity is irreparably broken.

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