California’s previous yearly budgets made it possible for Gov. Gavin Newsom to spearhead his ambitious investments in climate-smart infrastructure.
Though California has made aggressive strides to cut carbon pollution, especially with its push for zero-emission transportation by 2035, the state is tasked with a new issue — keeping up momentum while being hit with a projected decline in state revenues.
Newsom’s proposed budget maintains a $48 billion investment toward the state’s climate plan through 2026, a $6 billion cut from its initial pledge of $54 billion in 2021.
Climate programs across the board are receiving budget reductions, though programs surrounding coastal resiliency, nature-based climate solutions, extreme heat response and community resiliency, and transportation infrastructure are the ones facing the biggest cuts.
If more money is available in 2024, most of these budget reductions will be restored, Newsom said.
The governor said that despite the reductions, the budget will continue to prioritize investments for historically underserved populations.
“In partnership with the Legislature, we’ll continue to prioritize the issues that matter most to Californians while building a strong fiscal foundation for the state’s future,” Newsom said.
Following Newsom’s proposed 2023 state budget released Tuesday, state leaders said they are looking to offset costs with federal funding and specialized state funding to keep their promises of a greener California.
Despite the cuts, there is still room for revenue changes between now and Newsom’s revised budget proposal in May, and specific dollar amounts are likely to change once the Legislature reviews and adjusts the budget.
Lauren Sanchez, Newsom’s senior climate advisor, said that the budget leans into available climate funding from President Joe Biden’s Inflation Reduction Act and the Infrastructure Investment and Jobs Act, from which the state has already received $48 billion.
There’s also a trigger mechanism in place, in case sufficient funds become available to restore reductions made in the state climate plan, and state heads are considering a bond measure to get more state dollars.
“This budget ensures that California is not going to back down from our climate commitment. We have already provided billions of dollars over the last two years to supercharge our march away from polluting fossil fuels,” Sanchez said. “We are now sprinting towards a clean economy future that is inclusive.”
She added that the budget still has $2.3 billion dedicated to climate-friendly housing, jobs, education and health.
“That we were able to achieve this in an economic downturn is a testament to this incredible team,” Sanchez said.
In the transportation sector, a proposed $2.7 billion general fund cut will likely reduce future funding for the Transit Intercity Rail Capital Program, a project to modernize public transport, and the Active Transportation Program for better walking and biking infrastructure, and delay funds on the Safety Grade Separations program, which would improve safety near rail crossings.
Transportation projects will be partially mitigated by $500 million in specialized funds, meaning it has maintained 84 percent of its initial investment amount of $13.8 billion set in 2022.
California Transportation Secretary Toks Omishakin said that there is still room for federal and local dollars to offset costs, and noted a state highway account is protecting the state’s $200 million climate-friendly infrastructure program from receiving cuts.
“We are already putting state and federal dollars to work to build a more sustainable and connected transportation system, focusing on putting people first,” Omishakin said. “Our core four priorities of safety, equity, climate action and economic prosperity will continue to help us achieve many of the goals that we want to achieve as a state.”
The state’s leading efforts to accelerate the usage of zero-emission vehicles is also receiving general fund cuts of $2.5 billion. About $1.4 billion of the cuts will likely be offset by revenues made by the state’s Cap and Trade program, which requires polluters to purchase an allowance of emissions, said Secretary Yana Garcia of the California Environmental Protection Agency.
Garcia said she’s proud that the state is preserving roughly $2.1 billion — or 91 percent — of funding for programs dedicated to making EVs and their charging stations accessible to low-income residents.
“These are historic amounts by any measure for sure. We’ll continue to pursue federal funding, and if cap-and-trade auction proceeds exceed projections, discretionary funds will also be allocated to these programs,” Garcia said.
One area that the budget is certainly not skimping on is its drought response and water resiliency plan, with more investments allocated toward flood risk reduction.
Despite the budget constraints, this year the state has proposed an additional $200 million in general funds to enhance flood protection efforts like strengthening levees and adding infrastructure to urban areas and the Central Valley, given the ongoing winter storm cycle that has flooded large portions of California.
Wade Crowfoot of California’s Natural Resources Agency said he’s happy to see California prioritizing flood prevention while still putting funds toward drought and wildfire mitigation.
“We all know about this climate, supercharged extreme weather,” Crowfoot said. “We know we need sustained investments to actually achieve this resilience we now so desperately need.”
He added that despite the incremental cuts, California is still investing in a deeper and broader climate plan than much of the world.
“We know that we need to sustain investments over time to actually meet these carbon climate emission goals here in the next couple of decades,” Crowfoot said. “This year’s budget will only be the next tranche of funding in that, and whether that’s EV infrastructure or other areas, we’re going to continue to make those investments in coming years.”