America’s founders rightly feared the concentration of power in government, leading George Washington to remark, “Government is like fire, a dangerous servant and a fearful master.” This is why we have three branches of government in America — each checking the others’ power.
Unfortunately, the modern Administrative State has seen the breakdown of checks and balances. For instance, when Congress passed the Telecommunications Act of 1996 they gave the Federal Communications Commission (FCC) the power to unilaterally raise taxes through the universal service subsidy program. Having the power of taxation without representation, the FCC proceeded to double rates, hiking the universal service fees from less than $2 billion in 1996 to more than $6 billion today — all while phone revenues remained flat.
Another version of investing the power to regulate, tax, and spend in a single agency can be found at the state level with the Southern California Air Quality Management District (SCAQMD). The mission of the SCAQMD is vast and noble, as is always the case in government: to improve air quality. The SCAQMD covers the urban portions of Los Angeles, San Bernardino, and Riverside counties, as well as all of Orange County. It oversees a total of 10,743 square miles housing 16 million people. The SCAQMD has a 12 member governing board, none of whom are directly elected for the task. The district has a budget in excess of $100 million per year, 67% of which comes from fees on business.
The SCAQMD’s sense of mission, combined with insulation from the voters and its blending of executive, legislative and judicial power, provides absolute power in its domain. A domain, by the way, that it has the power to redefine at will as it takes on new tasks and powers.
As if this regulatory agency’s unchecked power wasn’t enough, it has now started using taxpayer money to influence the Legislature. In just this last legislative session alone, it paid more than $590,000 in lobbying fees. Meanwhile its executive director, Barry Wallerstein, pulls down $183,855 per year. That’s more than the Governor, any legislator, or either of California’s two U.S. Senators. He receives this generous salary while traveling on taxpayer money to such swank getaways as the Resort at Squaw Creek and Granlibakken (both at Lake Tahoe), La Quinta (Palm Springs) and Idaho’s Coeur d’Alene Resort. Apparently, environmental regulation has become just another big business, replete with incentives, profit motive, perks, and high-priced lobbyists.
Perhaps it’s time to ask some questions.
For instance, beleaguered businesses in Southern California have been taking orders and paying fines to finance the SCAQMD for decades. Is that even legal or constitutional?
What about the SCAQMD’s impact on the free market? There is considerable evidence that shows industry is constantly seeking ways to cut costs by improving efficiency, improving air quality in the process. Might SCAQMD regulations actually discourage some air quality improvements by discouraging industry from investing in plant upgrades? For example, the significant emission reductions we have seen in the rail industry recently were achieved through voluntary agreements, not via regulatory fiat.
Perhaps what is more troubling in the short term is the SCAQMD’s response to the many proposed transportation improvements for Southern California. Will the SCAQMD play a responsible role as a partner, or will they throw up immovable roadblocks as California’s elected leaders seek to reduce transportation gridlock?
Finally, we should take a step back and consider whether it is right to bestow an unelected agency with the near-limitless combination of the authority of the legislative (rule making), executive (enforcement), and judicial (fine levying) while being run by a high-salaried staff with expensive travel tastes and a half-million dollar lobbying budget? My answer is most assuredly, “no.”