Gov. Drops Fees From Plan

Gov. Arnold Schwarzenegger, after proclaiming himself a “green” governor, has dropped millions of dollars in fees that he had included in his budget to protect forests. And he has agreed to oppose other regulatory fees intended to safeguard the coastline.

Schwarzenegger has come out against the fees amid objections from Republican lawmakers and business lobbyists, which threatened to further delay passage of his $103-billion state budget, now two weeks late.

“We thought the governor seemed sympathetic to the principle that the polluter should pay,” said Bill Allayaud, state director for Sierra Club California. Allayaud was one of 11 environmental activists who co-signed a letter to the governor and legislative leaders Tuesday, defending the fees and urging a strong financial commitment to environmental programs.

“There is a concern that the administration appears to be edging more and more toward a business perspective and further away from the environmental perspective [Schwarzenegger] touted as a candidate,” the letter said.

Democratic legislative leaders, who had supported the fees, assented to eliminating them as part of the bargaining in the final stages of the budget talks.

“In a budget negotiation, when you don’t hold all the cards, you get some things, you give some things up and you cut your losses. And that’s essentially some of what we did,” said Assembly Speaker Fabian Nunez (D-Los Angeles).

Senate President Pro Tem John Burton (D-San Francisco) said: “My feeling is, if the price of protecting poor people is to acquiesce to some special interest the Republicans want, it ain’t that tough a choice for me.”

Without the fees, the services will be paid for out of state coffers already under strain.

Schwarzenegger had made the fees a part of his budget so people who used specific government services would have been the ones footing the bill.

This was an approach championed by the state’s nonpartisan legislative analyst, who called upon the governor to go even further than he had proposed in his budget and make sure that taxpayers were not left to pick up the cost of regulatory chores triggered by private interests.

Business interests made the opposite argument. They see the fees as an attempt to get private industry to substitute for government.

A number of industry representatives, including the California Chamber of Commerce, the Farm Bureau and oil producers, had sent their own letter to the Legislature last week objecting to some of the charges as a “new form of taxation without representation.”

The business groups warned against taking steps to “aggravate the current budget crisis by taxing productive economic enterprise” in ways that would “further tarnish California’s image among businesses worldwide looking to locate here.”

Environmentalists saw the fees as consistent with Schwarzenegger’s pledge to defend the environment.

The day after he announced he was running for governor, he said: “I’ve always been environment-friendly, and I will fight for the environment. Nothing to worry about that.”

In scrambling to round up Republican votes for his budget, Schwarzenegger dumped the fees. H.D. Palmer, spokesman for the state Department of Finance, said Tuesday: “These were issues that were very important to Republicans, and they were part of the discussion that the governor had with them. And the governor agreed that these fees were not going to go forward.”

Sen. Dick Ackerman (R-Irvine) the Senate’s Republican leader, said: “Our position on the fees is we opposed probably all of them. Most of them we consider hidden taxes.”

Ackerman said he and fellow Republicans worked through the governor’s legislative liaison, Richard Costigan, former chief lobbyist for the Chamber of Commerce.

“He understands our position,” Ackerman said.

The Schwarzenegger administration said it would scrap a new fee on timber owners that would have raised $10 million. The money would have been used to cover costs borne by the California Department of Forestry and Fire Protection in reviewing and enforcing logging plans.

The fee had been part of the governor’s 2004-05 budget proposal.

Schwarzenegger is also planning to roll back an existing fee that would have collected about $103 million this year (reflecting two years worth of assessments) to underwrite firefighting on range land and brushland and in other parts of California where fire protection is provided by the state.

Private landowners were to be assessed $35 per parcel, covering a portion of the firefighting costs. The fee had also been part of the governor’s budget proposal.

Schwarzenegger is opposing other fees that are moving through the Legislature but that were not included in his budget. One would increase the cost of a permit for development along California’s coast. The existing fee nets about $500,000 a year. The proposed fee would bring in an additional $2.3 million -- raising the total to a level that would cover half of the California Coastal Commission’s regulatory costs, according to the legislative analyst’s office.

“The longer the budget sits out there [without being passed into law], the more that business, industry and their cronies are taking shots at it,” said Ann Notthoff, California advocacy director for the Natural Resources Defense Council. “The fact is that California’s environmental programs are already cut to the bone.”

Underpinning many of the fees is the notion that taxpayers are paying too much of the cost of some government functions. An analysis by the legislative analyst’s office shows that even if the firefighting fees stood, they would pay only 9% of the forestry department’s fire protection costs, which total $590 million.

“All the taxpayers of California have been paying for them to have fire service,” said Legislative Analyst Elizabeth G. Hill. “We thought it made better public policy sense to make those who benefit pay a share.”