California Senate to Vote on Climate Change Fees

UPDATE (25 August 2008): The bill that is the subject of this post, AB 2558, was withdrawn by Assemblymember Huffman, and will be replaced later by another proposal.

I know there has been a lot of statewide material on this site lately — more local coverage will resume soon, but I did not want this one last morsel to get lost in the furor over AB 3034 and high-speed rail. Earlier this year, the bill AB 2744 died in the Assembly Transportation Committee; but, had it passed through the legislature and into law, it would have authorized the Metropolitan Transportation Commission to levy a fee on each gallon of gas purchased to generate an additional pile of money to be used for transit and programs related to climate change. The motor vehicle fuel fee didn’t work out, but how about charging a greenhouse gas emission fee instead? AB 2558, which just passed last week through the State Senate Appropriations Committee and which will be heard soon by the full Senate, aims to do essentially that. The bill is a joint Northern and Southern California product, co-authored by Mike Feuer (D-Los Angeles) and Jared Huffman (D-San Rafael), who also authored the aborted AB 2744.

AB 2558 would authorize both the Bay Area’s MTC and the Los Angeles Metropolitan Transportation Authority (MTA) to assess a climate change mitigation fee in their jurisdictions, and then apply the funds that are collected to implementing a plan that is specifically geared towards reducing or at least limiting global warming. The mitigation fee could take one of two forms:

• A fee on fuel for motor vehicles, not to exceed 3% of fuel sales price at the time the plan is adopted; or
• An annual fee assessed for each registered vehicle; the fee would vary based on the carbon emissions of each individual vehicle, but is not to exceed $90.

AB 2558 requires that any such plan allocate at least two-thirds of the collected funds to transit. Other than that, the requirements for the funded plan are rather general — but the remaining one-third or less of funds are to be applied to programs that accomplish “regional environmental and transportation needs,” including new infrastructure that encourages biking and walking, as well as programs that maximize efficiency of current freeway infrastructure (e.g. high occupancy vehicle lanes) without building new freeways.

Here in the Bay Area, the fee could be charged for 30 years in order to fund a plan that would have to be jointly approved by both MTC and the Bay Area Air Quality Management District; once approved, the plan would then be sent to the voters, where it must be supported by a majority in order to be enacted. One point I thought I should mention as a side remark is that a fuzzy overlap area remains with Proposition 218 between which charges can be thought of as regulatory “fees,” and which charges can be thought of as “taxes,” and that distinction is especially fuzzy for special taxes, in which the money is to be applied to a specific purpose (for instance, implementing a climate change mitigation plan). Taking advantage of these fuzzy borderline definitions, groups like the Stop Hidden Taxes Coalition, taxpayer associations, and chambers of commerce have attacked AB 2558, claiming that the bill unconstitutionally uses the word “fee” instead of “tax,” in order to circumvent the California Constitution. Per Proposition 218, the Constitution states that a local government needs two-thirds of the vote before it may levy a special tax. (See the California Constitution, Article XIIIC.) This standard is more rigorous than the majority vote requirement that is included in AB 2558. However, in the case of AB 2558, there is an especially close connection between the activity on which the charge is assessed (basically, polluting through driving) and the expenditure goal for the funds (mitigating effects of greenhouse gas emissions). This close connection supports the view that AB 2558 enacts a fee, rather than a tax.

In any case, MTC surveys indicate that a climate change mitigation plan would be poised for popular support, at least here in the Bay Area. According to one such survey, 65% of Bay Area residents believed global warming to be an “extremely important” consideration in planning, and 69% indicated that they would consider paying an extra 25 cents for gasoline if the additional money was used to fund programs that would reduce effects of global warming. It is encouraging to see Bay Area residents embrace this progressive attitude, as they have done in the past — even if that progressive attitude does not always translate into, you know, actually riding transit regularly. Bills like AB 2558 and AB 2744 are an important part of the solution to the problem of reducing greenhouse gas emissions because they use the powerful double-pronged approach that underlies congestion pricing and other similar tools — positive incentive in the form of improved transit, and negative incentive in the form of increasing the expense associated with driving — all geared toward putting a cap on vehicle miles traveled. And if it generates a new revenue stream in the process? So much the better, especially in the midst of a budget crisis that the Governor believes is best solved by what has become an annual tradition of raiding transit funds at budget time.

At the risk of sounding like a broken record, you know the drill: if you are reading this post from California, give your state senator a ring soon, before the Senate votes on AB 2558. Urge your senator to demonstrate a commitment to cleaner air and better transit by supporting this bill.