Cap and Trade Funds to be Loaned to General Fund
Governor Jerry Brown issued the May Revise for the state budget yesterday, and one provision has some transit advocates unhappy. The governor’s budget proposed to loan cap-and-trade funds to the general fund, which are promised to be repaid but it’s not entirely clear how that would work:
Yesterday, Governor Jerry Brown unveiled his budget for the 2013-2014 fiscal year that includes the first round of funds collected under the cap and trade system. In the budget, Brown “loans” the half billion in funds collected to the general fund to be paid back at some point in the unspecified future.
“We disagree with the Governor’s proposal to transfer the $500 million in cap-and-trade auction revenues to the general fund and postpone needed investments in projects and programs that could achieve greenhouse gas reductions this year,” writes Stuart Cohen, the executive director of TransForm CA….
“A decision delayed is an opportunity lost. We’re disappointed because we think that there was a real opportunity to put together an investment program that would have mattered,” said Denny Zane of Move LA.
I’m sure there are more details to this story, but I don’t see how this is a good thing to do. The cap-and-trade program is controversial and while AB 32 has weathered right-wing attacks before, including the failed effort to repeal it at the 2010 ballot, there is a very real risk that the program would lose some legitimacy and public support if it’s to be given to the general fund instead of immediately spent on projects to reduce carbon emissions. Yes, it’s a loan so the money will come back, but it would be even better for that money to be spent now on green projects.
Now it is entirely possible that the governor intends to use the money in the general fund for green things. He could start by giving more operating funds to local transit agencies, or helping to fund mass transit infrastructure. Cities and counties across the state have great plans for better bike and pedestrian infrastructure that are sitting on shelves for a lack of money, and $500 million would go a long way to helping fund those.
Some in Sacramento may defend the loan by saying there are other vital needs for that money, such as health care, schools, or human services. And I agree those are priorities too. But the state has a surplus this year. In addition, projects that reduce carbon emissions tend to be those that also help low-income folks get around more easily and cheaply (especially if that project involves transit). Green projects also usually reduce other kinds of air and water pollution, in turn improving the health of nearby communities.
I am sure that this is just the beginning of the story and that we will learn more about why this was proposed as well as how the debate over the cap-and-trade funds will unfold over the next four weeks. I also know that Governor Brown supports the cap-and-trade concept as well as green infrastructure, transit, and high speed rail. So I’m not casting doubt on anyone’s motives here. But I do agree with the other advocates that the money should be spent on green things, with transit and high speed rail being atop the list.