BAD POLICY

California Mayors Join Campaign to Buy Out PG&E – The Wall Street Journal

California hits Philly-area Amazon seller with $1.6 million sales-tax bill

There is much to like about California, except its economic and social policies. Not surprising many firms and people chose to leave the no so sunny state. Policymakers place political priorities over the best interests of their communities.

There is clear need for PG&E to enact some level of reforms. Some of the wildfires led directly to their negligence and their financial performance potentially harms service to customers. The path forward that some local policymakers seem to deem appropriate is to buyout PG&E and make it government owned or a cooperative. On face value, the move appears to appease the need to keep service up and provide a false sense of change.

The reality community residents need to consider is whether a government owned entity will perform any better than a monopoly. Also, consider the massive cost that will be passed on to residents not only in energy bills, but through taxes required to fund the cooperative. Residents should also consider other possible alternatives.
There is probably little that could be done to avoid a need for assistance

in the short term. But, long term objectives can be potentially better achieved through opening up the energy market to more competition, which can spread the burden of maintaining power infrastructure. The cost could be privatized rather than passed onto the taxpayers.
Leveraging private market solutions may help avert the need for California to find new aggressive manners of collecting revenue, like retroactive tax collections that seek tax revenues for transactions not taxable at the time of completion. The practice is a clear violation of long held constitutional principles against retrospective punishments.

One can argue a tax is not a punishment, but it essentially is so when applying it to transactions not accepted as taxable at the time. Taxes and other laws are supposed to be applied on a go forward basis. Actions done prior to the passage of legislation are grandfathered in because of the lack of applicable law.

The aggressive revenue approach is not a good look for prospective businesses, both large and small. The perception is government will simply claim liabilities against an entity that is clearly unfair and immoral simply to pad the government coffers. While some may not always like the business practices that occur in the market, government should act in a more stable manner.

Governments should not issue harm to business and economic climate in response to political aspirations or situational problems. Policymakers should operate in the best long term intentions of its people and common economy.