Enviro Groups Slam Budget's Cap-And-Trade Funds Diversion

The budget deal finalized by Gov. Jerry Brown and legislative leaders Monday night borrows $500 million from California’s cap-and-trade auction revenues, as Brown proposed last month.

That’s bad news to environmental groups. California League of Conservation Voters CEO said in a statement that the funds grab was "a particular insult to voters."

Bill Magavern, policy director at the Coalition for Clean Air, told the Sacramento Bee that the decision was "disappointing and shortsighted."

"It's bad for the health and economies of our most disadvantaged communities," he said.

The Brown administration’s argument for borrowing the funds: temporarily diverting auction revenue to the general fund gives the state more time to come up with effective programs to improve environmental quality and lower carbon emissions. California has already raised more than $260 million from auctioning off carbon emission rights.

Environmental groups say there are plenty of worthy clean energy projects to spend the money on during the coming fiscal year, but Brown defended the move during a Tuesday afternoon press conference.  “Yeah, we’re borrowing the money,” he said. “We do that with a number of funds. We don’t think we’re quite ready yet, and this is a reasonable accommodation.”

The governor rejected the idea that delaying cap-and-trade spending would dampen environmental efforts in the Golden State. “We’re the most aggressive in the Western Hemisphere in terms of our clean energy goals,” he said. “(Alternative energy portfolio standards will eventually require) 33 percent renewable energy for the electricity sector, very right regulations on building and appliance efficiency.”

Brown also pointed to the $450 million in new Proposition 39-generated revenue for energy efficiency projects in public schools. This week’s budget deal included a new agreement on how to distribute the remaining Prop. 39 money, which comes from the closure of corporate tax loopholes.

Brown had wanted to distribute the money to schools throughout the state, while Senate Democrat Kevin de León and other legislators had pushed for a more competitive, targeted approach.

As Capitol Weekly reports, the compromise will funnel Prop. 39 revenue to schools through a funding formula:

According to (de León spokesman Greg) Hayes, each district will be given a poverty-weighted allotment that is based on Average Daily Attendance (ADA), integrating both the governor and legislature’s means of determining which districts received what amount of revenues. Furthermore, though the competitive bid process was scrapped, legislative concerns about accountability were addressed through an application process that would prevent schools from receiving money for “phantom projects,” Hayes said. The agreement additionally requires benchmarks and outcome verification, according to a statement from de León.

“We cannot blow this opportunity. It’s $2.5 billion the voters voted for,” de León said during the conference committee hearing of the unique opportunity presented by Proposition 39. It seems no one ever told him not to mention a no-hitter while it’s in progress.