SACRAMENTO (AP) — Democratic legislative leaders and Gov. Jerry Brown are divided over whether to divvy up more than $1 billion collected from carbon auctions or retain it as an enticing bargaining chip while they struggle to win support for extending California's climate programs.
The top Senate leader upped the ante Wednesday by proposing to spend $1.2 billion, nearly all of the $1.4 billion that's been collected but not yet earmarked. The plan by Senate President Pro Tem Kevin de Leon, D-Los Angeles, would allocate money through 2017 for lower-emission vehicle incentives, transit funding and money to help low-income families make energy efficiency upgrades.
"Each day, each month, each year that we don't push these dollars out into the community is a day lost that we'll never recapture again in terms of cleaning up the dirty air that children breathe into their lungs," de Leon said.
De Leon's proposal puts him at odds with Brown and Assembly Speaker Anthony Rendon, D-Paramount, who would prefer to hold onto much more of the windfall.
The money is the fruit of California's cap-and-trade law, which requires companies that emit climate-changing gases to buy pollution permits, which are auctioned quarterly. The funds can be spent only on initiatives that reduce greenhouse gases and are a major source of funding for Brown's favored high-speed rail project, along with transit construction and energy conservation around the state.
Pollution credits consistently sold out after the cap-and-trade program began in 2012, but demand this year has plummeted amid uncertainty about the program's viability. The result was a steep decline in available revenue, prompting concerns that funding won't be available to continue programs long-term.
Results of the most recent auction, held Tuesday, are expected to be released next week.
"Given the overall volatility of the funding stream, we do need to be realistic and prudent in how much and where we spend," Rendon said in a statement after de Leon released his spending plan. He declared that a "responsible" spending plan will be approved this year, but his office declined to say how much he believes should be spent.
The debate over how much to spend comes as an effort by Brown, environmental groups and some Democratic lawmakers to extend the program until 2030 falters in the Assembly amid strong opposition from oil companies, Republicans and moderate Democrats. That 2006 law, known as AB32, is the legal framework that underpins the carbon-auction program and many of California's other climate-change programs, but its authority beyond 2020 is uncertain.
In another example of the strength of opposition to climate-related legislation, a spokeswoman for Assemblywoman Autumn Burke said Wednesday that the Los Angeles Democrat is giving up on her proposal to require that 15 percent of new cars be emission free by 2025. The spokeswoman, Allison Ruff, said the proposal met stronger-than-anticipated opposition "from a variety of groups including the Western States Petroleum Association," which represents oil companies.
"We were surprised by the level of opposition and how quick and strong it came on" Ruff said.
Burke announced her proposal just last week, saying California's existing zero-emission-vehicle mandates were too weak to require significant new investments by automakers. AB1108 would have made plug-in hybrid vehicles, which include a gas engine, ineligible to comply with the mandate.
Revenue from carbon auctions has been accumulating because lawmakers failed to agree on a spending plan last year, creating a rare pot of state money that isn't already spoken for. It's a tantalizing bargaining chip that allows supporters of extending the program to direct funding to projects in the districts of wavering lawmakers.
With two weeks left in the legislative session, groups eagerly awaiting funding for their favored programs are urging lawmakers not to wait another year.
School districts, for example, are eying millions of dollars for alternative-fuel buses.
"What's important for us is the students that are riding in outdated buses, riding in buses that aren't working," said Bill McGuire, deputy superintendent at the Twin Rivers Unified School District in Sacramento. "We can go out and buy old-generation school buses and solve the problem. But then we're not being good stewards of our money, we're not using the resources available to the school district to the fullest advantage."
Districts must make purchases soon to comply with a state mandate to phase out buses with engines from 1994 and earlier by Jan. 1, 2018.
Sen. Fran Pavley, an Agoura Hills Democrat who wrote the original legislation that led to the cap-and-trade program and is seeking an extension, said a delay in spending the money results in pollution that can't be undone.
"It's hard to tell your constituents about the tangible benefits of AB32 if you don't have projects you can show them," Pavley said.