The Association, along with thirty local and statewide organizations, is working hard to convince the Governor to prioritize transit during Cap-and-Trade reauthorization.
By Arianna Smith
Managing Editor
Transit California
There will be a gap of about $250 billion between the amount of funding required to pay for California’s transportation needs over the next decade and the predicted revenue from existing sources. Stable funding is an essential component to meeting these needs. (For more information about this projected shortfall, see this month’s feature article on the 2025 Transportation Needs Assessment).
It makes sense, then, that Association members - as well as business, labor, local government, social justice, and community organizations that rely on the services of transit agencies - are joining together to seek key stable funding sources for critical projects and operations.
This spring, a coalition of nearly thirty such groups launched the Climate Safe Infrastructure Coalition (CSIC) to bring a message to Sacramento policymakers during a sensitive moment for reauthorization: “Cap-and-Trade reauthorization should prioritize investments in physical and natural infrastructure that have a proven track record of reducing greenhouse gas emissions, strengthening California's resilience, and creating good-paying, middle-class jobs.”
Legislative discussions regarding Cap-and-Trade reauthorization are happening now, with legislation likely to be considered in the coming months. Here’s where the policy stands currently, what CSIC wants, and how CSIC members are working to secure future funds.
The status of Cap-and-Trade
Originally adopted in 2006 by California under then-Governor Arnold Schwarzenegger, the Cap-and-Trade program expires in 2030. Simplistically, the state charges polluters when they produce more carbon emissions than are allowed under the law. The money collected is used for programs and projects that improve air quality and public health, reduce fossil fuel use, conserve the environment, and provide a twice-yearly California Climate utility bill credit.
“California must continue to lead on reducing pollution and ensuring our climate dollars benefit all residents. That’s why we’re doubling down on cap-and-trade: one of our most effective tools to cut emissions and create good-paying jobs,” said Governor Gavin Newsom in April 2025, when he and legislative leaders announced that they would seek an extension of the Cap-and-Trade program this legislative session. “In just the last decade, cap-and-trade has invested billions of dollars in projects by holding polluters accountable – helping clean our air, protect public health and propel new careers. Cap-and-trade is a huge success and, working together, we’ll demonstrate real climate leadership that will attract investment and innovation to deliver the technologies of tomorrow, right here in California.”
The Governor’s office, the Legislature, and stakeholders have been engaged in Cap-and-Trade reauthorization discussions throughout the spring and into the summer. The Legislature could vote on proposed updates to the program by the end of session in mid September. (For more information on the reauthorization negotiations, see Transit California’s June 2025 article on this session’s budget deal.)
Concurrently, the Association’s Cap-and-Trade Reauthorization Subcommittee has served as a hub of expertise and leadership to ensure that transit agencies are shaping these discussions.
CSIC takes action
The members of CSIC ultimately joined forces to urge policymakers to prioritize five key areas in the Cap-and-Trade reauthorization trailer bill language: state-supported transit and rail infrastructure; wildfire resilience infrastructure; local land use infrastructure that would support high-density and infill development; climate adaptation and sea level rise infrastructure; and clean local transportation infrastructure.
On July 8, CSIC leaders brought its message to policymakers and the public with a rally at the State Capitol. A recording of the rally is available here.
“Investments in public transit made to date under the Cap-and-Trade program have helped deliver more than 245 transformative transit programs statewide, this is the equivalent of taking 5.3 million gas powered cars off the road annually,” said the Association’s Executive Director Michael Pimentel at the event. “We must hold the line on this level of investment – or expand it – if we want to make true progress on climate change.”
Other leaders speaking at the rally emphasized how transit and clean transportation infrastructure meet the overarching pollution reduction and climate change mitigation goals of Cap-and-Trade.
“This monumental investment is putting people to work, improving the transportation infrastructure that we rely on every day. Every person, family and community – including disadvantaged communities – benefits from climate safe infrastructure. We urge the Governor and the Legislature to prioritize this investment,” said United Contractors Director of Government Relations, Gus Flores.
“Our coalition is rallying behind diverse investments in climate infrastructure that will make us safer, reduce pollution and emissions and support tens of thousands of family-supporting middle class jobs,” said California Alliance for Jobs Executive Director Michael Quigley.
Since the rally, CSIC members have expanded the advocacy and public affairs campaign by meeting with legislative members and staff on key committees and working groups.
On July 14, CSIC submitted a coalition letter to Governor Newsom and legislative leadership communicating the coalition’s priorities in greater detail.
Of special interest to Association members are the request to consider continuous allocations to a variety of state and local infrastructure. The letter calls for continuous allocations to capital projects of regional significance with funds to be used to support the buildout of an integrated transit and rail network, including the Transit and Intercity Rail Capital Program (TIRCP) and High-Speed Rail; continuous allocations to local and regional transit agencies to support the recovery, stabilization, and growth of transit and rail service statewide, including the Low Carbon Transit Operations Program (LCTOP); and continuous allocations to local, rural and regional governments to support projects consistent with a sustainable communities strategy, including funding for local infrastructure around Transit Oriented Development.
The letter also calls for a variety of funds for local governments to safely implement green transportation infrastructure that would affect transit agencies, including hydrogen and EV charging infrastructure, support for local active transportation infrastructure, funding for local government and transit clean fleet compliance, and the development of a network of regional vehicle miles traveled (VMT) mitigation banks to offset local transportation project costs.
Finally, the coalition letter calls for the reauthorization to include funding opportunities for mitigating climate disaster recovery and response, including the expansion of local fire evacuation routes and the relocation or replacement of existing transportation and other critical infrastructure threatened by sea level rise.
In the weeks ahead, CSIC and the Association are preparing for the launch of a targeted digital advocacy campaign. For more information about CSIC’s work, follow CSIC’s social media platforms (YouTube, X and Facebook) and watch for the Executive Director’s weekly emailed report.