California's budget is starting to cramp its environmentally hip style.
Gov. Arnold Schwarzenegger is proposing to borrow money from special funds to pay for implementing the state's ambitious plan to roll back greenhouse gas emissions to 1990 levels by 2020.
The administration wants to borrow the money from various funds filled by driver's license and vehicle registration fees, as well as tap into recycling deposits, to help pay for 212 positions at a dozen state agencies.
Legislative fiscal watchdogs are worried, though, that those funds would be stretched too thin.
"The administration is punting yet again on finding a reliable funding source for arguably one of the most important pieces of legislation the governor has signed to date," Senate President Pro Tem Don Perata said in a statement. "Taking money from the state's recycling fund is shortsighted, and I plan on discussing all funding options as part of the budget process."
A joint legislative hearing on the Global Warming Solutions Act of 2006, the climate change law more commonly called AB 32, is set for Monday.
In trying to figure out how to monitor and regulate greenhouse gas emissions, the administration is proposing to hold off imposing fees until after the state Air Resources Board adopts a strategic plan at the end of the year.
But some Democratic lawmakers and public interest advocates suggest that, given the tight budget, the ARB should go ahead and levy a fee on industries known to be major contributors of greenhouse gases.
"The bottom line is the administration is delaying the difficult decision of enacting a fee," said Mark Newton, director of resources and environmental protection at the Legislative Analyst's Office.
Schwarzenegger's plan calls for spending $55.5 million in the fiscal year beginning July 1, an increase of $23.6 million over the current fiscal year, to pay for more staff at the Air Resources Board, Department of Forestry and Fire Protection, the Department of Water Resources and other agencies.
Staff will be assigned to evaluate the effects of climate change on state forests and waters, and to develop ways to monitor low carbon fuel standards. In addition to lowering greenhouse gases, the governor has called for a 10 percent reduction of carbon output in transportation fuel by 2020.
James Goldstene, executive director of the Air Resources Board, said the board plans to reimburse the borrowed funds with money collected from future fees and it's important that those fees reflect actual emissions.
"I think the point is we don't have all the information we need to make the decision" on how to structure the fees, Goldstene said.
The ARB's strategic plan is expected to serve as a blueprint for reducing all sources of greenhouse gas emissions and help regulators establish a fee schedule, which is expected to affect all Californians whether through fuel purchases or electricity use. The final plan is scheduled to roll out at the end of 2011.
Lenny Goldberg, a tax law lobbyist who works on behalf of organized labor and education, argued that the state doesn't have to wait for the strategic plan in order to impose fees.
"You certainly can do midcourse adjustments," Goldberg said.
The Legislature initially raised concerns last year about the lack of money for a planning staff and directed the administration to come up with a plan to fund it. This year, the analyst's report found that planning to borrow the money isn't sustainable in the long term.
The analyst's office has advised the Legislature to hold off on approving Schwarzenegger's funding plan until the administration comes up with a better idea.
Steve Maviglio, a spokesman for Assembly Speaker Fabian Núñez, said the leader will study all forms of funding.
"AB 32 needs to be funded or it will be toothless, and this year our options are limited," Maviglio said.
Goldstene, of the Air Resources Board, said imposing fees now would require staff to come up with two sets of regulations in "a matter of months."
After the board adopts its strategic plan, it will take at least 18 months to start collecting fees so those revenues wouldn't be available until July 2010 or later, Goldstene said.
Until then, the state would continue to borrow from special funds such as the Motor Vehicle Account and Beverage Container Recycling Fund – both of which will have to be paid back with interest.
Call Judy Lin, Bee Capitol Bureau, (916) 321-1115.
