SIA Cabinet Report

Friday, April 05, 2013

A legislative legal opinion released Thursday casts further doubt on a proposal by the governor to include as part of the state’s constitutional funding guarantee for schools next year $450 million earmarked for energy efficiency projects.

The idea, which Brown included in his January budget, has already drawn sharp criticism from the non-partisan Legislative Analyst, which warned earlier this year that the money could not be counted in the school funding guarantee because it had been specifically identified as “special funds” as part of a voter initiative.

At a budget hearing Thursday, state Sen. Rod Wright, D-Los Angeles, read into the record what he said were the operative sections of a legal opinion he had asked for on the question from the Legislative Counsel’s office.

“We conclude that money transferred into the Clean Energy Jobs Creation Fund are true special fund money and not general fund for the purposes of Proposition 98,” Wright said. “Because the Legislature is clearly restricted as to the purpose for which those monies may be appropriated, the money transferred would not be included in the calculation or in meeting the Proposition 98 requirement.”

At issue is nearly $1 billion expected to be generated annually as a result of the passage last November of Proposition 39 – which closed a tax loophole that benefitted out-of-state companies doing business in California.

Capitol Weekly’s Greg Lucas on Proposition 39:

Gov. Jerry Brown wants to give California’s 1,032 school districts more than $2.6 billion over the next five years to help them lower their energy bills.

Districts say they don’t know where to apply, what they can spend the money on or how much of an overall need exists but they’ll gratefully accept the money – particularly after years of recession-fueled state funding cutbacks of at least $10 billion.

Cutting utility bills boosts classroom spending on kids, argue districts and the Democratic governor.

“Any way that school districts can save on their energy costs in the long-term is good,” said Cindy Marks, president of the California School Boards Association. “Cost savings from energy efficiency and renewable energy can be redirected to the classroom for greater student success.”

KQED’s Rachel Dornhelm reports on Prop 39:

President Obama raised eyebrows earlier this month by elevating climate change to a top national priority in his inaugural address.

California has long been a policy leader on the issue. In the last election, voters overwhelmingly passed Proposition 39, which closed a corporate tax loophole and uses the cash to create the largest energy-efficiency initiative of any state.

The proposition requires the money be spent on public buildings, however the details have been left to lawmakers. Now there’s the predictable debate over who will get the money and how it might be spent.

Peter Miller, Senior Scientist at the Natural Resources Defense Council, blogs about Prop 39:

Remember those scenes in the cartoons where the hero is about to be overtaken by the bad guys, but at the last minute he tells the co-pilot to turn on the “power boost” and the car leaps forward to the finish line?

Proposition 39 is our power boost, afterburner, or ultra-drive for energy efficiency, which already has saved Californians billions of dollars in lower energy bills and eliminated the need for 30 large power plants that would have spewed tons of toxic pollutants and carbon emissions into the air we breathe and water we drink.

California’s landmark building codes, appliance standards and utility programs have produced the cleanest, cheapest, fastest energy resource that we have: energy efficiency, which also creates good jobs and builds our economy. Proposition 39, which was passed by California voters last November, closes a corporate tax loophole costing California $1 billion annually and provides the opportunity to bring these benefits to some of the most deserving citizens of this state: children in disadvantaged neighborhoods and schools.

Justin Gerdes, energy and environmental journalist, outlines the current Prop 39 proposals in Forbes:

The Great Recession sent the California economy reeling. Home values plummeted, unemployment spiked, and state budget deficits soared. The state shed 1.4 million jobs, including 400,000 construction workers and 32,000 teachers.

But, on November 6, 2012, California voters approved two measures that should help stanch the bleeding. Proposition 30 increased income taxes on high earners for seven years and raised the sales tax by a quarter-cent for four years; Proposition 39 closed a tax loophole that favored out-of-state corporations, costing the state around $1 billion annually.

Prop 39 stipulates that over the next five years half of the recovered revenue be spent on clean energy and energy efficiency projects in public buildings. After five years, all of the revenue flows to the state’s General Fund.

Chris Megerian from the LA Times discusses the LAO’s reaction to the Governor’s proposal for Prop 39 funds:

When Legislative Analyst Mac Taylor rolled out his review of Gov. Jerry Brown’s budget proposal on Monday, some of his sharpest criticisms involved plans for new tax money generated by a change in corporate taxes.

The change, approved by voters in November as part of Proposition 39, sets aside about $500 million annually for clean energy projects for the next five years. Brown wants to spend the money on increasing energy efficiency at thousands of local schools and community colleges, distributing the funds based on the number of students in each district.

There’s three major problems with the governor’s plan, Taylor says. First, he says, the ballot measure requires the money to be spent on ways that maximize energy savings and job creation, and focusing solely on schools may not accomplish that.

“We believe a more effective approach would be to first evaluate the relative energy savings and job benefits among all potential projects,” said a report from Taylor’s office.

LA Times

Chris Megerian

When Gov. Jerry Brown releases his budget proposal Thursday, he will include his plans for $500 million in new spending on energy efficiency and related programs.

Assemblywoman Nancy Skinner and Jody London, the president of the Oakland Unified School District Board, write about the opportunities for Prop 39 to make schools more energy efficient.

Aging facilities that waste energy forced California’s public schools to pay more than $1 billion last year in utility bills. For the more than 1,000 cash-strapped school districts in California that have to choose between paying teachers or keeping classroom lights on, Proposition 39 is a harbinger of better times ahead.

Prop. 39 provides the opportunity to abandon the outdated and inefficient energy infrastructure powering California’s schools – a project akin to replacing an incandescent bulb with LED lighting on a very large scale.

The initiative, which voters approved in November, is expected to generate $1.1 billion in tax revenues annually by eliminating a tax loophole that rewarded out-of-state companies at the expense of California jobs. For five years, half of the tax revenues raised will go to the state’s general fund and half will fund clean energy and efficiency projects at schools and similar buildings, thus providing jobs to Californians who insulate walls, replace heating and air-conditioning systems, and install solar rooftop panels.

The Oakland Unified School District provides an example of what we might expect statewide once Prop. 39 is fully implemented. The Oakland school district has launched an aggressive energy management model in three of its high schools – McClymonds, Oakland Technical and Castlemont – that have been spending roughly $775,000 a year on their PG&E bills. Using state and local bonds and utility incentives, these three high schools upgraded their furnaces and water-heating systems this year, improvements projected to reduce the three schools’ energy costs by $116,000 annually. Also, the upgrades to more efficient energy systems will reduce global-warming carbon emissions by 343 tons per year.

Kate Gordon, Director of Advanced Energy and Sustainability at The Center for the Next Generation writes a piece for The Huffington Post  Blog on Prop 39:

Lately the news has been full of articles urging the United States to invest in our future by bringing our aging infrastructure up to modern standards. As it washed away hundred-year-old concrete and brought down old power lines, Hurricane Sandy underscored the fact that our nation’s very foundation is crumbling, and our ability to compete with other nations along with it. This Sunday’s New York Times lead editorial gave one reason for this inaction, noting that “The need for investment in public works, never more urgent, has become a casualty of Washington’s ideological wars.”

New Study from The Center for the Next Generation Makes Case for School Retrofits

as State Legislature Considers How to Direct New Funds

San Francisco, CA – California’s students, workers, and communities could reap huge benefits from a new, voter-approved initiative that closes a business-related tax loophole.  Proposition 39, approved 60-40 by California voters on November 6, could provide these benefits by funding energy efficiency upgrades in thousands of California schools over the next five years, according to a new analysis released today by The Center for the Next Generation, a non-partisan think tank (to view the full analysis, visit: www.tcng.org/files/Prop39_Investing_In_California.pdf ).