As a result of years of budget deficits and wasteful spending by the state legislature, California faces difficult budget challenges for the next ten years. This bad news is courtesy of a recent analysis of the state’s long-term debt obligations by state Treasurer Bill Lockyer. The analysis adds to a growing list of bad fiscal news for California, a state already struggling under the nation’s worst credit rating and suffering the highest unemployment in the country at 12%.

Even as California deals with this financial crisis, a career politician is pushing a ballot measure that would raise taxes by nearly $1 billion — but doesn’t allocate one penny to balance the state budget, pay down its debt, or to fund existing critical programs like education and public safety. This measure, the so-called California Cancer Research Act, would mandate a new bureaucracy with six political appointees that can spend tax money on buildings, salaries and benefits. This includes $16 million spent on overhead and $117 million on new buildings and facilities. These are not one-time expenditures, as such spending will continue year after year.

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California State Treasurer Bill Lockyer is absolutely right to scoff at accusation in the Wall Street Journal that California is the “the Lindsay Lohan of states”. Ms. Lohan is currently in Court Ordered rehab at the Betty Ford Clinic, whereas wily California is still “at large” and making lots of new Ponzi scheme promises to pay existing municipal bondholder with future borrowings.

Treasurer Lockyer in his Op Ed crows that California has approximately $89.4 billion in revenue and only $36 billion mandated as priority to pay schools, leaving “$53.4 billion available to pay debt service on bonds — more than eight times the $6.6 billion of interest payments the state will need to make this year.” But he conveniently forgets to tell readers that those interest costs are headed to $9 billion, pension costs will double to $8 billion, the State budget has a $24 billion expected shortfall over the next 18 months; and the State must by law pay back $27 billion in short term borrowing from State agencies.

California does have many similarities to Ms. Lohan. Both were America’s premier child stars, but over the last fifteen years they have increasingly been overwhelmed by their addictions. For Ms. Lohan, the addiction is cocktails and drugs; for California, it is shopping and spending. Psychiatrists explain that addictive behavior is any behavior that has become the exclusive focus of a person’s life and physically, mentally, or socially and harms the individual and or others. The addictive behavior produces beta-endorphins in the brain, which makes the person feel “high.”

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Last week, the premier of British Columbia, Gordon Campbell, paid a visit to the California State Legislature.  He spoke at length about his province’s green energy partnership with California in supplying California with electricity while helping the state meet its greenhouse gas reduction goals.

I listened to the leader of the Western Canadian province of 4.4 million people and I found myself asking, “What is he selling?”  So, I decided to follow the money.  What follows is a summary of an international green energy scam that costs California taxpayers millions while robbing California of jobs due to higher electricity costs and electricity imports.

The Scam

Decades ago, the West Coast began exchanging electricity.  During the summer, when air conditioning use spiked in California, Washington State and British Columbia would ship hydropower down to the Golden State.  Later in the year, during California’s mild winters, when rivers levels were low in the Northwest, California would return the favor.  The power exchange worked well for everyone.

During California’s 2000-2001 energy crisis, our northern neighbors took Enron-like advantage of us.  BC Hydro, a state-owned utility, through its marketing and trading subsidiary, Powerex, aided in the rampant market manipulation that ended up costing California consumers millions.  Bill Lockyer, then California Attorney General, sued.  In March 2005, Powerex settled and refunded a fraction of the profits they made at the expense of California ratepayers.

The current version of this energy scam is breathtaking in its scope.

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