California Gov. Gavin Newsom wants to use the cap-and-trade program to fund the state’s much-maligned High-Speed Rail project, which is behind schedule and over budget.
While Newsom proposed that funding source in his budget revision last week, a new report on Monday revealed that the expected price to finish the Merced to Bakersfield line has once again increased by millions of dollars.
Driving the news: Newsom said last week that he wants to extend the cap-and-trade program through 2045 to fund High-Speed Rail
- The cap-and-trade program is funded by credits that major polluters pay to the state and is currently scheduled to expire in 2030.
- Newsom proposed sending $1 billion annually from the cap-and-trade program to High-Speed Rail for the next two decades.
What we’re watching: Newsom will need to get approval from the Legislature for his proposal. State lawmakers will debate the budget in the coming weeks as they work to finalize the $322 billion budget by the end of June.
- Republican lawmakers, such as Asm. Alexandra Macedo (R–Tulare), have called on Newsom to divert cap-and-trade funding for water infrastructure and other uses.
- Newsom’s colleagues on the left want the funding to go toward environmental causes.
What they’re saying: “The Governor has the authority to redirect the $1 billion of cap-and-trade funding that goes to the High-Speed Rail Authority to pay for vital services, especially wildfire prevention and water infrastructure,” Macedo said in a statement last week.
Zoom in: KCRA reported Monday that the High-Speed Rail Authority provided an update to consultants and lawmakers last week sharing that the funding gap to complete the Merced to Bakersfield line could be as large as $10.2 billion.
- That would be an increase of $3.2 billion from previous estimations, with the state already $7 billion short. The total cost for the 171-mile stretch would be $38.5 billion.
- The projected cost for the Merced to Bakersfield line when voters approved the project in 2008 was $6.2 billion, with the entire project slated for a $33 billion budget.
