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    Gov. Schwarzegger Vetoes SB 927, Sen. Lowenthal's Container Fee Bill (For Clean Air Programs, Rail Cargo Projects, Port Security); Sen. Lowenthal Says It's "Not The End Of The Fight, Only The Beginning"

    (Sept. 22, 2006) -- Governor Arnold Schwarzenegger has vetoed SB 927 by State Senator Alan Lowenthal (D., LB-PV-SP), a bill that would have levied a $30 fee on cargo containers to fund air quality programs, rail cargo projects and port security...and the Governor plans to boast of the veto in his weekly radio address scheduled for Saturday.

    "I vetoed a series of bills [including SB 927] that would have imposed more than $700 million in new fees and taxes on Californians," Gov. Schwarzenegger is slated to say in his weekly radio address [scheduled for Saturday, previewed in a release from his office. "The people in our state are best served by actions that stimulate economic growth. That means putting more money back into the people's pockets and improving our state's business climate so we can create more jobs and make the right investments in our infrastructure."

    In his full veto message (posted in full below by, Governor Schwarzenegger cites his support for a November ballot measure that asks taxpayers to incur roughly $20 billion in infrastructure bond debt to (among other things) expand port goods movement capacity while allocating roughly half as much for environmental mitigation.

    Responding to the Governor's veto, State Senator Alan Lowenthal (D., LB-SP-PV) told he found the Governor's veto message "as empty as those containers that we're shipping back to Asia." To the Governor's veto message calling his bill "flawed," Senator Lowenthal the Governor's veto message struck him as flawed. "Right now we're subsidizing cheap plasma TVs for Omaha; the container fee might have added a half cent or quarter cent to a pair of shoes." [further comments below] .

    SB 927 (in its original SB 760 form) was supported by the City of Long Beach (via a 2005 City Council vote), LB Mayor Bob Foster, the South Coast Air Quality Management District and the Coalition for Clean Air (among others)..but was opposed by the CA Chamber of Commerce (which labelled it a "job killer"), the Long Beach Area Chamber of Commerce and (in its original SB 760 form) the "California Ass'n of Port Authorities," an entity in the which the Port of Long Beach is a member...although the Port of LB says it was publicly "neutral" on the bill. posts the verbatim text of Governor Schwarzenegger's veto message on SB 927 below:

    To the Members of the California State Senate:

    I am returning Senate Bill 927 without my signature.

    Improving the quality of life for all Californianís through congestion relief and environmental improvement has been one of my top priorities as evidenced by the introduction of my Strategic Growth Plan resulting in the enactment of Senate Bill 1266 (Chapter 25, 2006).

    Senate Bill 1266 (Chapter 25, 2006) is the largest transportation and air quality bond in the history of the United States. It provides $1 billion in new funding to improve air quality in California which will directly benefit the communities in and around the Los Angeles and Long Beach Ports. Senate Bill 1266 also provides $1 billion to address port mitigation issues, $2.1 billion for trade infrastructure and $100 million in port security funding. This is in addition to the $140 million annually for air quality mitigation contained in Assembly Bill 923 (Chapter 707, 2004) which I sponsored and signed. Although the policy objectives of Senate Bill 927, to develop more secure ports, congestion relief and environmental mitigation, are laudable, this measure is flawed in its construction, application, lack of accountability and failure to coordinate with other public and private financing sources ignoring opportunities to leverage additional funding.

    Senate Bill 927 provides no mechanism for the usage of the fees collected to favorably leverage the billions of dollars in available funding to develop public private partnerships. Although SB 927 does generate funds, if done in a more coordinated fashion with the public and private sector, funding for additional congestion relief and mitigation could be increased geometrically. Additionally, this measure is drafted to include only two ports and applies only to goods shipped in containers, ignoring all other forms of shipping and ports of entry.

    Public safety is and has been my top priority which includes increasing the security at all California ports. My Office of Homeland Security and Emergency Services has aggressively worked with the U.S. Office of Homeland Security and all our local counties and cities to support them as they develop their local plans for port security and identify their needs. Over 127 million dollars has been awarded and allocated on a competitive basis to California ports for security. These grants are being used for port security training, communications equipment, cameras, lighting underwater surveillance and protective equipment for port first responders. We have an additional 100 million dollars included in the strategic growth plan specifically for port security. Additionally, we are working with the U.S. Department of Homeland Security on their just announced award investing over 1 billion dollars on radiological and nuclear detection capabilities.

    As Governor, I have traveled to both China and Japan working to improve our trading relationships with these nations -- trade that includes both imports and exports. It is very important that any measure that increases fees that impact exporters not have the unintended consequence of negatively impacting the sale and delivery of goods grown and manufactured in California. SB 927, unfortunately could negatively impact these exports as well.

    Finally, my goods movement task force is developing a comprehensive report that will provide more thorough and strategic direction and insight on what the best options are to address goods movement and port related challenges. This report will be available by the end of this year.


    Arnold Schwarzenegger

    Senator Lowenthal said he's "not giving up" and added, "This is not the end of the fight. It's only the beginning. I'm going to be back with an even stronger colaition of responsible businesses, citizens and environmental groups...and this time we're going to be successful." asked Sen. Lowenthal why he believes he'll be successful in the future. [Background: Governor Schwarzenegger vetoed Lowenthal's "no net increase in port pollution" bill in 2004...and Assembly Democrats [apparently piqued with Lowenthal advancing redistricting reform legislation] blocked an updated "no net increase bill [SB 764] in 2006.] Sen. Lowenthal replied to us philosophically:

    "When I first began roughly 15 years ago, working to close [cover] the [formerly open air] petroleum coke piles, we were given all kinds of excuses, threatened litigation. No one thought we'd have any change, but we did. And people are now aware that there's a health crisis. At minimum 1,200 people dying prematurely each year [related to goods movement]."

    What about the Governor citing the November bond in his veto message? "The bonds are just a downpayment, a drop in the bucket compared to what's needed" Sen. Lowenthal said.

    What about the Governor's veto message promisiung a goods movement task force "report" by the "end of the year" [i.e. after the November election]? Sen. Lowenthal said, "It was supposed to come out earlier this year...He [the Governor] knows there's nothing there."

    Should the Governor's veto of the container fee bill become an election issue? "I think the Governor has let California down. He vetoed a bill that would have helped clean up the air and secure our ports and yes, that should be publicized."

    Sen. Lowenthal added, "I'm saddened but I'm emboldened. We are going forward."

    At a Sept. 20 press event urging Gov. Schwarzenegger to sign SB 927 -- at which Sen. Lowenthal, LB Mayor Bob Foster, Councilwoman/AQMD Boardmember Tonia Reyes Uranga and L.A. Councilwoman Janice Hahn were featured speakers (extended coverage below), we asked the elected officials if they'd still support the Port expansion bond measure if Governor Schwarzenegger vetoed SB 927. They all said yes...but Mayor Foster attached a significant caveat to his support:

    "We've got two choices to clean this port up. Either the federal government takes its responsibility as a national asset and puts a nationwide container fee to get this done or we're going to have to put the cost on where it belongs, which is on the people consuming the goods and services. 70% of the goods coming out of here wind up outside of California...Our kids' asthma rates are three times the statewide average. That asthma is subsidizing somebody's low cost TV in Kansas. That's not acceptable." Mayor Foster said.

    Sen. Lowenthal added at the time that he "cannot imagine the Governor vetoing this bill."

    [Comment: Watch for's editorial on this, coming a few hours after sunset on Sunday night, Sept. 24]

    Related coverage:

    LB Mayor Foster, Sen. Lowenthal, Councilwoman/AQMD Boardmember Reyes Uranga, L.A. Councilwoman Hahn & Multiple Clean Air Advocates Tell Gov, Schwarzenegger: Sign SB 927 (Container Fee For Clean Air, Rail Projects, Port Security)

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