California officials split on how to divvy up $500 million in clean-energy funds

Published: Tuesday, Apr. 30, 2013 - 12:00 am | Page 3A
Last Modified: Tuesday, Apr. 30, 2013 - 7:35 am

The fight over Proposition 39 didn't end at the ballot box.

Six months after voters overwhelmingly approved a change in the corporate tax code that's expected to net the state an additional $1 billion in revenue for five years, lawmakers are wrangling over how to spend an estimated $500 million a year the measure earmarks for energy efficiency projects.

The ongoing debate, which pits Gov. Jerry Brown against legislators and the initiative's deep-pocketed supporters, involves what types of projects should get priority for funding and what the criteria for receiving grant or loan money should be.

"You've got to make sure, we have to make sure, and I'm damn sure going to make sure, that we do this thoughtfully and intentionally so we get the most bang for the buck, so we can give the public a return," said state Sen. Kevin de León, D-Los Angeles, who was a co-chair of the Proposition 39 campaign.

The November ballot measure calls for sending half the estimated $1 billion in revenue generated by the tax code change to a special account created to fund energy efficient retrofits at public buildings, including schools, colleges and universities, and "job training and workforce development programs related to energy efficiency and alternative energy."

Much of the money is expected to be used for upgrades at the state's schools, to start.

Supporters of that approach, which is central to the three major competing proposals, say it's the best way because it ensures the money goes to projects throughout the state and allows schools to save money on utility bills in the future. Focusing on the same types of facilities could also help standardize energy retrofit processes and develop a system for tracking the effectiveness of the upgrades.

Gov. Jerry Brown has proposed sending the entire pot of cash to schools and community colleges, giving the Department of Education and the Chancellor's Office for the California Community Colleges authority to allocate the funds based on enrollment.

His administration argues that approach, contained in his January budget proposal, will ensure that projects get started quickly and lower utility costs for schools and colleges down the road. The plan, backed by Superintendent of Public Instruction Tom Torlakson and the state's community colleges, also allows the governor to count that money toward the minimum school funding levels mandated by Proposition 98.

"I think there's no concern whatsoever that we could very easily spend these dollars and get the dollars out quickly and get Californians to work and meet the requirements of Proposition 39," Dan Troy, vice chancellor for fiscal policy at the California Community College's Chancellor's Office, testified recently.

But Brown's plan has faced criticism from lawmakers and the nonpartisan Legislative Analyst's Office, which detailed "many serious concerns" with the legality and effectiveness of his plan in an analysis released earlier this year.

"I'm not going to vote for anything that looks like this," Democratic Sen. Hannah-Beth Jackson said at a recent budget subcommittee hearing on the plan. "I think it's way too simplistic and doesn't reflect in any way what the spirit of what this initiative was."

De León blasted the plan at a recent hearing, saying it "runs counter to the spirit and letter of Prop. 39" and has the potential to become "Solyndra on steroids" because of a lack of accountability measures.

"The Department of Finance's proposal has no benchmarks, no measurements, no verifications," he said.

De León has introduced his own proposal for allocating the funds. Under Senate Bill 39, which will be heard in the Senate Energy and Utilities Committee today, preference would be given to qualified projects proposed by "economically disadvantaged schools."

In addition to saving those districts money over time, the bill argues that investing in upgrades in low-income areas will "enhance community pride and sustain neighborhood vitality."

His bill, which also directs officials to create guidelines for issuing grants and loans for projects at the state's colleges and universities, has the backing of Tom Steyer, the billionaire Democratic donor and environmental activist who bankrolled the Proposition 39 campaign.

"I had talked to Senator de León about the way we did it, and that was the way I thought we would end up doing it, and I think that Kevin still thinks that's the best way, so I trust Kevin on that," Steyer said after a speech at the state Democratic Party convention earlier this month. "He's thought about it more deeply and thoughtfully than I have."

Questions have been raised, however, about whether smaller school districts will be able to compete to secure cash under the process de León has proposed.

Lawmakers also have concerns about making sure the money isn't spread too thin. They say that's more likely if the allocation is based on enrollment, as in the governor's plan, rather than on impact or the need for upgrades.

"If I'm a school site and I get $300, I could put in some really good LED light bulbs, which are really really efficient, but I don't necessarily create any jobs from that," said Assemblywoman Nancy Skinner, D-Berkeley, who has introduced Assembly Bill 39 to direct the funds.

Skinner's bill puts a bigger emphasis on funding schools based on the potential energy-saving effects.

Assembly Speaker John A. Pérez has signed on as a co-author to that bill. Pérez spokesman Steve Maviglio said the speaker's priority is making sure the money goes to "shovel-ready projects" that align with the goals of the initiative.

Pérez wants to see some of the remaining $500 million in general fund revenue go toward lowering the cost of college, an idea he pushed with 2012 legislation that would have used the revenue from the change for scholarships for middle-class families.

"I'm sure my colleagues in both houses have other ideas on how to use that money," Pérez said at a Public Policy Institute of California luncheon last month. "But when you look at the long-term impact of college affordability on our economy, it's huge."

Call Torey Van Oot, Bee Capitol Bureau, (916) 326-5544. Follow her on Twitter @capitolalert.

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