Carl DeMaio and AB 23: Right Diagnosis, Fake Medicine

The Hedge — Brutal Honesty Over Hype Since 2008

The Pitch

Assemblyman Carl DeMaio’s Cost of Living Reduction Act (AB 23): when California prices exceed the national average by more than 10%, state agencies must automatically reduce taxes, fees, and mandates until prices come down. He’s also promising $2,500 per middle-class family annually in cost-of-living rebates, funded out of the Greenhouse Gas Reduction Fund. DeMaio’s diagnosis of Sacramento’s failure is largely correct. The prescription is where it falls apart.

What He Gets Right

The benchmarking concept is intellectually interesting — automatic accountability that doesn’t depend on any individual politician’s will. His examples are real: average ER visit in California runs $3,238 versus $682 in Maryland. Average ambulance ride $2,407 versus $662 in North Carolina. The differential is primarily regulatory.

The $2,500 Per Family Math

California has approximately 13 million households. At $2,500 each, that is $32.5 billion per year. The Greenhouse Gas Reduction Fund historically disburses $3 to 5 billion annually. Emptying it doesn’t get you to $32.5 billion. It gets you to 10 cents on the dollar. DeMaio has not explained this gap. This is a campaign number, not a policy number. When a politician promises $32.5 billion out of a $4 billion fund, you either don’t understand the math or you’re hoping voters won’t check.

The Gas Tax Suspension Problem

Suspending state gas taxes “until politicians fix it” has no defined endpoint. It’s either a permanent tax elimination (explain the budget math) or a temporary measure with no exit condition. Meanwhile the roads don’t get maintained.

The Bottom Line

DeMaio mixes legitimate structural reforms with numbers that don’t survive basic arithmetic. When a politician tells you a $32.5 billion annual promise will be funded by a $4 billion fund, that is not a rounding error. That is the whole ballgame.

Rating: The best critique of the status quo in the race. The math is theater.

— Timothy McCandless | The Hedge | timothymccandless.wordpress.com