Funding for bullet train draws controversy

SACRAMENTO — There are still a few days to go until Gov. Jerry Brown unveils his new budget proposal, but one of his ideas is already stirring controversy.

The governor wants to use cap-and-trade revenue to bolster the state’s high-speed rail project, which has run into legal and financial trouble. The money could help keep construction going while bond funding is held up by a lawsuit.

The plan was described by sources who were not authorized to speak publicly before the governor releases his budget proposal Friday.

Cap-and-trade money is generated by forcing polluters to buy credits in order to release greenhouse gases into the atmosphere. Brown previously raised the possibility of using the revenue for the bullet train last January, describing it as “a fiscal backstop” for the $68-billion rail project.

Although environmentalists support the bullet train, they don’t want to see cap-and-trade money used to support it. Kathryn Phillips, director of Sierra Club California, said there are other projects that would reduce greenhouse gas emissions more quickly.

“High-speed rail will not get us reductions for many years,” she said. “It doesn’t make sense to invest those funds now into something that will not get us reductions now.”

The nonpartisan Legislative Analyst’s Office, in a 2012 report, raised legal concerns over whether the money could be used for the bullet train. The report also said other environmental programs, such as improving energy efficiency, could also be a more cost-effective way to reduce greenhouse gas emissions.

Brown’s use of cap-and-trade money generated controversy last year as well, when he borrowed $500 million from the sale of pollution credits to cover general fund expenses. The governor has promised to return the money, although a repayment schedule has not been released.

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Twitter: @chrismegerian