Budget Deal a Shot in the Arm for California Sustainable Communities

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With less than 6 hours left before the constitutional deadline, California lawmakers passed a budget last night that includes substantial new revenues for implementing California’s landmark Sustainable Communities and Climate Protection Law (SB 375), both this year and into the future. The source of the new revenues is California’s Cap and Trade program, a market-based trading mechanism that is a key component of California’s Climate Change law AB32. 

The budget trailer bill SB 862 outlines the key details:

  •  35% of future cap and trade proceeds are allocated to transit, housing and other sustainable communities programs and projects:
    • 10% for a transit and intercity rail capital program – administered by the California Transportation Commission (CTC) and Caltrans;
    • 5%  for transit operations­ – administered by Caltrans and the Air Resources Board; and,
    • 20% for housing and sustainable communities (including planning, active transportation, transit and other supportive infrastructure, and not less than half for housing) – administered by the Strategic Growth Council  and ARB

One important detail: the percentages above apply starting in fiscal year 2015-2016. For this year (2014-2015), the above categories receive a total of $180 million (see the 2 charts below for more detail), with that number anticipated to rise substantially in 2015,when total program revenues are estimated at several billion per year.

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Senator Steinberg—author of the original SB 375 in 2008 and a true champion for sustainable communities—fought hard to ensure a permanent source of funding to implement this program and deserves significant praise for this accomplishment, which will be a much needed boost to communities throughout California. Local governments and regional agencies all around the state that have been hard at work crafting their Sustainable Communities Strategies to reduce greenhouse gas emissions through smarter transportation investments and land use decisions will now have a permanent source of funding to access to implement key projects and programs.

To dedicate 35% of future cap and trade revenues to ensure affordable housing and clean transportation, particularly for low-income Californians, healthier, safer and more livable communities is a fantastic legacy for the outgoing President Pro Tem of the Senate.

While we are still reviewing all details, NRDC and our Transportation Coalition for Livable Communities partners had urged the legislature to include a competitive process for distributing funds administered by the regional agencies responsible for implementing SB 375, as well as a program for counting each project’s reductions in greenhouse gases.   Now the agencies responsible for implementation must design the program to include these elements. We had also hoped the program would reward regions that met or exceeded their GHG targets, while also discouraging jurisdictions from approving development projects inconsistent with regional sustainability plans, such as Sacramento County’s Cordova Hills project, which I’ve written about in the past.

Going forward, all key implementing agencies including the Strategic Growth Council, Caltrans, the California Transportation Commission and the Air Resources Board bear significant responsibilities to fund projects that maximize greenhouse gas reductions and benefit California’s most disadvantaged communities.  We look forward to working closely with all agencies to establish an inclusive process that selects the projects that go the furthest towards achieving those goals.

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