Volkswagen's Settlement Cash Isn't Spreading Sunshine and Rainbows in Texas

Sprinkle a bag of cash on an area and what happens? The highest authority in said area collects it all and then decides how to dole it out. And, just like at a children’s birthday party, the squabbling soon begins — usually sparked by one guest complaining that another got a larger slice of cake.

That’s what’s currently happening in Texas, where a city with dirtier air claims it’s being short-changed after seeing the windfall headed to a smaller, cleaner city. No fair!

Officials in the state’s largest city, Houston, aren’t happy about second-ranked San Antonio’s cut of the dirty diesel loot.

In its settlement, Volkswagen agreed to funnel a total of $2.9 billion to U.S. states, letting those jurisdictions decide where and how the money should be spent to offset the pollution spread by its emissions-rigged vehicles over the course of seven years. Highly populated Texas received a large cut, of which 81 percent (some $169.5 million) will be distributed to five population centers.

A problem arose when Houston learned that San Antonio, roughly two-thirds its size, stood to receive 35.1 percent of the state total, or $73.5 million. Under the Texas Commission on Environmental Quality’s plan, Houston receives only $13.1 percent of the cake, or roughly $27.4 million. Why the discrepancy? Apparently, San Antonio’s closer to meeting federal air quality standards than its larger neighbor.

Houston claims that, besides having worse air quality than San Antonio, one quarter of affected VW models in Texas resided within its boundaries. Thus, the state should fork it over.

As reported by Houston Public Media, the city wants the state to provide at least $50 million. Not only that, it wants an exemption from a requirement stating it must match 40 percent of the amount, claiming it’s still feeling budget pressure from last year’s devastating hurricane. “So we deserve at least a quarter of those funds, because we’re the ones that were harmed,” said Kris Banks, a government relations assistant to Houston Mayor Sylvester Turner.

The state claims there’s still $31 million from the settlement that’s up in the air. However, that particular bundle of cash must be spent on electric vehicle charging stations.

In the wake of the settlement, many U.S. states and cities decided to put the money towards the upgrade of diesel-heavy transit and truck fleets. It’s an easy way to quickly lower emissions and reduce air pollution, while also creating some breathing room in tight budgets. Still, even if cities feel they got their fair share, other problems piggy-backed on those VW dollars.

In June, the city of Eau Claire, Wisconsin, learned that the portion of the state’s $67.1 million cut set aside for the purchase of new buses might not help it get its hands on new rolling stock. If Eau Claire took the VW money allocated for new buses, the state would cut the city’s transit aid by 20 percent of the value of the new buses. Like other municipalities, the city depends on that aid to pay transit salaries and fuel costs. As such, Eau Claire remains on the fence when it comes to the purchase. Its aging buses still ply the roads.

Naturally, the $109 million cut set aside for Illinois created a scandal. In May, Governor Bruce Rauner was forced to announce public hearings on how best to spend the money after critics accused the state’s environmental chief of cutting deals with big business.

Who knew winning the lottery could create problems?

[Image: Volkswagen]