Newsom says he’s working on Bay Area transit loan deal — but details being hashed out in secret

Last week transit advocates raised alarm bells that Gov Gavin Newsom was dragging his feet on finalizing million loan included in the state budget to prevent serious utility cuts to Bay Area transit But just as advocates were gathering in San Francisco s Civic Center Plaza for a rally to push Newsom to authorize the loan on Monday morning the governor s office circulated a announcement saying that the loan isn t dead yet We are working closely with all stakeholders on the parameters of a funding deal the comment read Our shared goal is to agree on the terms of a deal by this fall That could mean that Newsom is holding out on the loan as a bargaining chip over lawmakers before the end of the session a tactic he has used before The budget is one of the only areas where the governor has leverage to advance his guidelines priorities This year they include a controversial plans to renew the state s cap-and-trade venture as well as the expensive Delta water tunnel that Newsom says is an essential part of California s drought mitigation strategy Sen Scott Wiener who has been in talks over the terms of the loan with the governor s office mentioned during the Monday morning rally that he is a little bit more optimistic about the funding coming through He announced he couldn t comment on the specific conversations he d had with the governor s office over the weekend BART AC Transit and Muni among other agencies have been counting on the million to help cover their operations until a long-term source of revenue like a proposed regional sales tax comes together to help fill the funding gap beginning in fiscal year Without the loan BART has reported it might have to cancel two of its five lines and reduce provision from every minutes to every minutes Other agencies also anticipate ending function earlier or increasing the time between buses The terms of the loan such as the interest rate or oversight into how the funds are spent may come together after the Legislative session Wiener announced the governor s office indicated it may extend talks through January Inquired to comment Newsom s office did not provide any further information beyond its report Transit agencies are eager to know as soon as attainable whether they can count on the loan or if they need to begin cutting services now reported Laura Tolkoff transportation plan director for the urban guidelines group SPUR which has been leading the charge to fund transit If you lose your job you don t wait six months to start cutting back your expenses she declared Ahead of the Legislative deadline Newsom wants to see lawmakers reauthorize the cap-and-trade venture which sets a ceiling on how much California companies can pollute and allows them to buy credits to surpass that limit In latest years cap-and-trade has brought in various billion annually to the state but it is set to end in Newsom wants to see the effort renewed through The issue is how future revenues should be spent Newsom wants to put billion annually toward California High Speed Rail which is looking for a stable stream of state funding to lure private assets and billion to pay for Cal Fire s firefighting and prevention But dedicating funds to firefighting and high-speed rail could leave fewer dollars for other programs that rely on cap-and-trade dollars like conservation or clean air and water programs and crucially transit Of the billion that cap-and-trade has brought in since Bay Area transit agencies have gotten billion nearly of the project s revenues The greater part of this money has been required to go toward capital expenditures like the Caltrain electrification project or designing the BART extension to San Jose But with ridership still far lower than pre-pandemic levels Bay Area transit agencies want to use cap-and-trade dollars to pay for more of their operating funds too As pandemic exigency funds dry up BART is looking at an operating deficit of million AC Transit faces a shortfall of million The debate over cap-and-trade is the rare issue that has managed to pit constituents transit advocates against high-speed rail promoters groups that would typically be on the same side were they not fighting over the same pot of money So far Newsom s office and legislators aren t discussing publicly how the negotiations over cap-and-trade negotiations are progressing The governor has used transit funding as a bargaining tool before In he proposed eliminating billion from his budget that had been previously slotted for transit But following negotiations with the Legislature Newsom approved a billion lifeline to transit agencies in return for a pared down version of his infrastructure plan which relaxed environmental reviews for solar wind water and transportation projects To announce the deal the governor s office disclosed a video of Newsom sitting on a BART train signing the thick budget package https x com CAgovernor status