Unpacking Baker’s $1.4 Billion Bond Bill
by TIM CRONIN, MARCH 20th, 2018
In the wake of Massachusetts’ third major winter storm, Governor Baker announced an ambitious new $1.4 billion bond bill (H.4318) to fund climate adaptation programs.
The bill goes further than just authorizing bonds. It also includes over two dozen provisions related to clean energy policy, marine fishing, municipal water zoning, climate adaptation regulations, and much more. In this way, it is not only a means to fund climate adaptation, but also a vehicle for other policy changes Governor Baker wants to pursue.
Below is a summary of the key provisions of the bill, along with an explanation of its next steps on Beacon Hill and the policy landscape it faces.
OVERVIEW OF THE BILL’S BOND FUNDING
Although climate change adaptation is considered the primary purpose of the bill, it accounts for only 11% of total bond funds. Comparatively, conservation & recreation receive four times as much funding, while environmental protections and other local investments receive about twice as much funding as climate adaptation and mitigation.
Overview of Bond Allocation in H.4318
Bond funding will likely be spread over five years, meaning certain items will need to be renewed at the end of the five years. Most funds from the bond are directed to the Executive Office of Energy & Environmental Affairs (EEA), Department of Conservation & Recreation (DCR), and their sub-agencies.
CLIMATE ADAPTATION FUNDING
The bill includes about $310 million in bond funding for “infrastructure and climate change prevention, adaptation, and mitigation.” $165 million is dedicated to adaptation, in the form of new and improved seawalls, the building of natural coastal barriers, the expansion of municipal vulnerability plans, and adaptation plans for state and regional agencies. $110 million is directed towards dams.
The remaining $35 million is directed to “new climate change initiatives,” that focus on mitigation. This includes workforce training on climate change, an EV program to electrify state fleets, monies for collecting data on climate change, and funds to reduce carbon emissions in agriculture.
The legislation also codifies portions of Governor Baker’s previous executive order on climate adaptation, ensuring that future governors will be required to implement the program.
COMPARISON TO CAMP LEGISLATION
There is some overlap between CAMP legislation (S.2196), filed in the legislature for a third session, and the Baker bond bill, but there are also significant differences.
One area where the two bills differ is in the centrality of the coastal buyback program. CAMP legislation invests heavily in state programs dedicated to purchasing coastal properties vulnerable to climate impacts so they can be converted into natural barriers that protect residents from future storms. This new bond bill, in contrast, does not explicitly create a buyback program, but allows the Governor to establish one if she/he sees it necessary to do so. Even if created, the funding is limited to just $30 million over five years.
Another key difference between the two bills is funding. The Baker bond dedicates fewer net funds towards climate adaptation than previous CAMP proposals. Estimates of the cost of adaptation in Massachusetts fall as low as $350 over five years. Yet, the Baker bond bill only sets aside $165 million for adaptation, after subtracting out extra funds slated for dam infrastructure and mitigation (see table above). This allocation carries risk as we face higher costs associated with climate change damage in future decades.
CLEAN PEAK STANDARD & CLEAN ENERGY
The bill also creates a “Clean Peak” standard that requires a minimum level of clean energy to supply the grid during the most expensive times of the year.
The policy’s intended purpose is ensuring that clean energy is used when capacity is most in demand. In Massachusetts, 10% of hours in the year account for about 40% of total energy costs for ratepayers. Traditionally, this meant switching to additional gas and even oil to meet the state’s energy needs during significant winter storms. However, clean peak would encourage an influx of renewables into the grid during these shortages. California has already implemented clean peak into law and the policy is also in proposed legislation in Arizona.
When designed correctly, clean peak standards can have real benefits in meeting energy demand with renewables. Moreover, the policy has the potential to drive investment toward clean technologies like energy storage and microgrids. Storage is critical for renewable sources like wind and solar to supply the grid during peak periods.
There is, however, a concern that the bill’s current language may lead to new natural gas consumption. As it reads, it is up to state officials to define what a clean peak resource is, “including, but not limited to” storage, renewables, and demand response.
Check back for a detailed analysis of ‘clean peak,’ and how it will effect natural gas consumption in Massachusetts.
CONSERVATION & RECREATION
The majority of the bill’s bond funding, $580 million, is directed to deferred maintenance of recreation facilities and expanding conservation in the state, including $25 million for expansion of trails in state forests. The remaining funds will go towards upgrading and building new facilities for the Department of Conservation & Recreation (DCR), and to the Department of Fish & Game (DFG) for parks, forests, beaches, playgrounds, bike trails, and watersheds.
The legislation also includes $270 million for environmental protection. These funds will support programs improving air and water quality monitoring, hazardous waste cleanup, and restoring rivers, wetlands, and lakes. Part of the money will be used for the state’s Clean Water Trust, which helps local towns and cities maintain and develop water infrastructure.
There are a number of other provisions in the bill, including:
- $4 million in grants for public entities, like large cities and state agencies, to transition fleets of electric vehicles.
- $25 million for local tree planting and forest land protection programs.
- $50 million towards the complete streets program which provides safe and accessible options for all means of transportation – walking, biking, transit and vehicles – for people of all ages and abilities.
- $125 million for community grant programs to municipalities, and regional planning agencies to work with the EEA.
- The Department of Agricultural Resources (DAR) will be given the authority to require training for municipal animal inspectors.
- DAR will also receive new authority to enforce laws relating to local pesticide spraying.
- Allows the state to enforce new marine fishery laws by updating old fines and penalties.
- Provides new discounts on parking passes and fishing and hunting licenses for veterans.
NEXT STEPS FOR BAKER’S BOND BILL
Introduced in the House last week, the bill (H.4318) has a complicated path to becoming law, with many opportunities for amendment along the way. The bill must pass through each of the following steps:
- Joint Committee on Environment, Natural Resources and Agriculture, where the bill awaits its first reading. (House Chair Smitty Pignatelli, Senate Chair Anne M. Gobi)
- [Likely public hearing before the committee]
- House Committee on Bonding (Chair, Antonio F. D. Cabral).
- House Ways and Means Committee (Chair, Jeffrey Sánchez )
- Vote of the full House Chamber**
- Senate Committee on Bonding (Chair, John F. Keenan )
- Senate Ways and Means Committee (Chair, Karen E. Spilka )
- Vote of the full Senate Chamber**
- A conference committee, where 6 members from both chambers will iron out differences
- Conference report will go back for a vote of the full House Chamber
- Conference report will back for a vote of the full Senate Chamber
- Finally, it will be sent back to Governor Baker, who must sign it into law
[**may also be referred to a rules, policy, or steering committee]
This process must be completed in the four and a half months before July 31st, the end of the legislative session.
A hearing of the bill before the Joint Committee on Environment, Natural Resources and Agriculture will be scheduled for sometime in the next month. There is a possibility of additional hearings before each chamber’s Committee on Bonding.
THE WIDER LEGISLATIVE ENVIRONMENT
Baker’s bond bill enters the legislative fray alongside two other major bills seeking to act on climate adaptation: existing CAMP legislation (S.2196) and the Senate’s Omnibus Clean Energy Bill (S.2303).
The CAMP legislation (Comprehensive Adaptation Management Plan) is similar to previous bills submitted in the legislature, all of which failed to gain traction in both chambers. A current version of the bill (S.2196) passed unanimously in the Senate and is before the House Ways & Means Committee.
Furthermore, the Senate’s Omnibus Clean Energy Bill (S.2303), also includes significant adaptation provisions. The omnibus bill fully integrates the perennial CAMP bill (S.2196), in addition to over two-dozen other clean energy provisions. The path to law for this bill is much more difficult than that for the Baker bond bill or the standalone CAMP bill. Yet, one could imagine CAMP surviving if a final compromise version of the omnibus bill passes both houses.
Some sort of climate adaptation measure is expected to be passed into law this session; the question remains which one of the three bills will be the vehicle for it.
TIM CRONIN POLICY ASSOCIATE
Tim assists in coordinating CABA’s Policy Program, and is a young professional with experience in community organizing and state politics. He is currently pursuing a B.A. in Economics at Stonehill College. Tim has previously studied Politics, Philosophy, and Economics (PPE) at Oxford University, and has interned at the State House and in local government. He currently serves as student-body president at Stonehill College where he has continued to fight for sustainable initiatives such as fossil fuel divestment, expanding the college’s solar farm, and reducing food waste. Tim is on the board of a local civic association in his hometown of Weymouth, and is the founder of the community nonprofit Green Weymouth. Tim enjoys reading The Economist, listening to podcasts, and exploring state parks in his free time.