Another plan for cap and trade revenue

By CMTA Staff

Capitol Update, May 23, 2014 Share this on FacebookTweet thisEmail this to a friend

This week an Assembly Budget Subcommittee heard a plan that would spend cap and trade revenue in a manner not in agreement with the Governor’s proposal. The plan would address perceived weaknesses in the Governor’s proposal – that it would lock in multi-year funding too early, not provide enough funding for local projects, that State projects receive less vetting than local projects, funding for Transit and Metropolitan Planning Organizations needed, and the California Environmental screen is flawed.

The Assembly plan limits the spending to $1.04 billion for one year, with a large role for the Strategic Growth Council (SGC) to make grants for competitive programs ($400 million) and allocation to State departments for projects that meet the same performance criteria as the grants (another $400 million). High speed rail (HSR) could be a part of that allocation. The Assembly would also authorize the HSR Authority to borrow up to $20 billion in federal loans to construct the HSR operations segment. The SGC could repay that money from cap and trade revenue “assuming it has met the criteria for funding” designated by the SGC.

Assemblyman Richard Bloom (D-Santa Monica), chair of the subcommittee, noted that metrics and criteria are necessary to ensure that we achieve greenhouse gas reductions in accordance with legal requirements for spending fee revenue under AB 32. He faulted the Governor’s proposal as insufficient in this regard. Some members expressed concern that the SGC may be the wrong entity to execute this function. Nevertheless, the proposal passed out of committee with only democrat support.

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