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Poseidon Resources Hits Up Taxpayers for $1/2 Billion

By       Message Eddie Scher     Permalink
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On Wednesday, November 18, the three-person California Debt Limit Allocation Committee (CDLAC) will meet in Sacramento to decide on Poseidon Resources' request for a $530 million tax-free bond. Each year the IRS allocates a total amount of tax-free bonds the state can issue to fund housing and infrastructure projects that benefit the public. The CDLAC (made up of the state Treasurer, Comptroller, and Governor) determines what projects qualify for these funds. Unfortunately, these bonds are too often directed to private corporations for projects with questionable public benefits.

The Poseidon bond request, if issued, would represent a $159 million taxpayer subsidy to a project that has already asked for $350 million from the Metropolitan Water District of Southern California. MWD last week granted the $350 million subsidy, though the board of directors amended the agreement to allow MWD to cancel the contract based on changed future financial circumstances.

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A coalition of environmental, labor and consumer protection groups is demanding that CDLAC, "support projects that are sustainable and fiscally responsible." Public interest groups contend that Poseidon has a "proven track record of failure" and that giving this corporation taxpayer funds, "undermines the goal of using tax-free bonds to promote projects with broad public benefits."The proposed Carlsbad plant, they say, "will drastically increase CO2 emissions in the state, kill marine life, and produce expensive, unreliable, unsafe water."

The California Debt Limit Allocation Committee, which decides what housing and infrastructure projects can draw from the state's yearly allocation from the IRS of tax-free bonds, is made up of State Treasurer Bill Lockyer, Governor Arnold Schwarzenegger, and State Controller John Chiang. The CDLAC will meet on Wednesday, November 18, in Sacramento.


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Poseidon Resources Hits Up Taxpayers for $1/2 Billion