California climate programs would lose billions in Newsom’s budget

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Update: On June 30, legislative Democrats announced a deal to borrow $10 billion for climate action, including $3.8 billion for drinking water and groundwater, $1.5 billion for wildfire and forest programs and $1.2 billion for sea level rise. The Legislature plans to vote July 3 on the measure, which would go before voters on Nov. 5. 

Democratic lawmakers and environmental advocates are urging Gov. Gavin Newsom to support a bond measure to help pay for billions of dollars in climate programs endangered by the state’s record deficit and deepening budget cuts.

The lobbying comes as an array of key climate programs — including efforts to combat rising seas and help low-income Californians buy electric cars — face significant cuts and delays as California seeks to close a $56 billion deficit over the next two fiscal years.

The governor and the Legislature two years ago approved a $54.3 billion spending package for what he called his “California Climate Commitment.” After a round of trims last year, Newsom in January proposed an additional $2.8 billion in cuts, or 7%, this year. Then, earlier this month, he proposed more than doubling that amount by adding another $3.3 billion in funding cuts. In all, that is a 17% reduction, or $9.4 billion, from the 2022 peak.

The governor also has proposed delaying the funding of some of the state’s programs.

For instance, the Clean Cars for All program, which helps lower-income Californians replace their older gas-powered cars, was slated to get $45 million next year, but Newsom has suggested delaying that money until the 2027-28 fiscal year. He will be termed out of office by then. The program received $611 million in one-time funding in the 2021 through 2023 budgets but it has not all been allocated yet.

Climate and public health advocates say cutting or delaying spending on programs that reduce greenhouse gases or help California adapt to climate change will exacerbate natural disasters and weather emergencies and allow air pollution to continue for years to come.

California’s climate spending includes programs to enhance coastal resilience as sea levels rise, prepare for wildfires, ensure water security and develop solar and wind energy projects.

Advocates are raising the alarm about reductions in “resiliency” programs meant to help California adapt to climate change, particularly sea-level rise and extreme heat. The Coastal Conservancy, for instance, is facing $392 million in cuts for various coastal programs, according to a state Assembly committee summary.

“The climate crisis doesn’t take a break for tough budget years,” said David Weiskopf, senior policy advisor for NextGen California, which advocates for environmental and social issues. “Anything we put off for later will only cost us more and run up the bill we will have to pay as the climate crisis worsens.”

“The climate crisis doesn’t take a break for tough budget years. Anything we put off for later will only cost us more … as the climate crisis worsens.”

David Weiskopf, NextGen California

The Senate and the Assembly have passed competing measures that would seek voter approval in November for a bond to pay for climate programs. Newsom has not endorsed either of them.

The tough budget choices come after the state budget ballooned with record surpluses after the COVID-19 pandemic, buoyed by an influx of federal spending, a soaring stock market and higher earnings, particularly for high-income Californians.

Newsom saw that windfall as an opportunity to shore up a state reeling from calamitous wildfires, droughts and floods. In 2021 he began setting aside two consecutive years of surplus to combat climate change, but then began cutting back last year.

Now, facing the large deficit, Newsom said he would rather not eliminate or scale back climate programs that he supported. Earlier this month, Newsom said the 83% of the climate funding that he is proposing keeping intact is significant.

“There (are) no material cuts to the climate agenda,” Newsom said during a May 10 press conference. “There was a lot of creativity.”

But environmental advocates disagree, saying that the cuts will affect California’s efforts to fight  the effects of a warming planet.

“There (are) no material cuts to the climate agenda…There was a lot of creativity.”

Gov. Gavin Newsom

California is already in danger of failing to meet its ambitious goals unless it almost triples its rate of reducing greenhouse gases through 2030, according to recent analysis. If the state has to scale back programs aimed at reducing emission, those goals may become harder to meet.

“It’s very fair to say we’re slowing down California’s transition to its climate goals and its clean energy goals,” said Barry Vesser, chief operating officer of The Climate Center, an advocacy group. “Unfortunately, as you and I know, physics and chemistry and climate change do not really care about the state’s fiscal condition.”

Facing a June 15 deadline to pass a revised budget, legislators are pressing for a bond measure that would fund some of those programs.

Assemblymember Eduardo Garcia, a Democrat from Coachella and author of the Assembly’s bond bill, AB 1567, said “advancing a climate bond offers a can’t-miss opportunity to alleviate funding disparities while making the investments we need to protect” Californians from climate change. Sen. Ben Allen, a Democrat from El Segundo, author of the Senate’s bond proposal, SB 867, said in a statement that California “urgently needs to invest in solutions to mitigate the worst impacts of climate change.”

At the press conference, Newsom would only say that “we’re maintaining a posture of engagement” on a climate bond.

He said he is wary of another bond measure after suffering a ballot box setback in March, when voters approved his $6.4 billion mental health bond by the slimmest of margins, 50.2% to 49.8%. That experience, Newsom said during his press conference, “sobered, I think, a lot of the conversation up here.”

“The public wants to see results,” the governor told reporters. “They are not interested in inputs, they are not interested to talk about how much money we’re spending.”

Jon Coupal, president of the Howard Jarvis Taxpayers Association, said he was wary of bonds that might pay for climate programs, especially if those programs don’t pan out.

“Are they really going to create those kinds of projects with a long-term benefit?” he asked.

On Wednesday, the state budget committee overseeing climate programs delved into the governor’s proposal in detail. Assemblymember Steve Bennett, a Democrat from Oxford and chair of the committee, said he hopes to avoid some of the reductions. 

“I will continue to fight for maintaining and restoring funding for wildfire preservation, water resilience, sustainable agriculture and environmental justice within the bounds of the budget constraints that we have,” Bennett said. “Given this budget shortfall, and our current fiscal reality, for every dollar we try to restore, we have to cut somewhere else.”

Newsom is increasingly relying on the state’s cap-and-trade program — the market for companies buying and selling greenhouse gas credits — to make good on his previous spending commitments. He is proposing funding $5.2 billion of his climate agenda from cap and trade’s Greenhouse Gas Reduction Fund.

Environmental justice advocates oppose the cap and trade program because it allows pollution from some facilities to continue, largely in the state’s poorest communities. 

The Lung Association recently identified California as home to six of the 10 smoggiest cities in the country. Vehicles are the primary source of the state’s smog, and delays in the funding of low-emission programs such as the clean car rebates will undermine the state’s efforts to clean the air, said Will Barrett, a senior director with the American Lung Association.

“These are programs intended to reduce harmful pollution,” Barrett said. “To the extent that these resources are taken away from those purposes, that’s obviously concerning.”