State Senate Skeptical of Loaning Cap and Trade Revenues to General Fund
Last week Governor Jerry Brown announced in his May Revise of the state budget a proposal to loan $500 million in cap-and-trade revenues to the general fund rather than to earmarked carbon emissions reduction programs such as transit. Well, a State Senate budget subcommittee does not seem very interested:
The two Democrats and one Republican on a Senate budget subcommittee denounced Brown’s plan, which was included in a revision of his state budget last week.
The $500 million loan to the general fund is designed to partially offset the Brown administration’s forecast that revenues will dip below earlier projections in the 2013-14 fiscal year by $1.8 billion, but members of the committee said it made little sense since the same budget proposes to repay some of the state’s “wall of debt,” which is mostly money owed to schools.
Money from the fees is supposed to pay for programs that reduce greenhouse gases, and the Legislative Analyst’s Office had warned in the past that using the fees for other purposes could be illegal.
“It’s a little bit of an odd exception to reducing the wall of debt,” Sen. Jim Beall, D-San Jose, the subcommittee chairman, said. Republican Jim Nielsen of Gerber and Democrat Hannah-Beth Jackson of Santa Barbara joined in the criticism. The committee was poised at one point to formally reject the loan, but decided to leave the issue open instead.
Senators Beall and Jackson are both good progressive Democrats and I’m pleased, though not at all surprised, to see them push back against this proposal. $500 million is a lot of money that could provide an important and much-needed boost to transit in California, especially electric passenger rail. The Legislature should use that money for its intended purpose – to reduce carbon emissions.