Gov. Gavin Newsom on Tuesday proposed closing a $22.5 billion shortfall in California’s next fiscal year budget in part with multibillion-dollar cuts aimed at a cause that has become a landmark of his administration is – combating the effects of climate change.
The draft 2023-24 budget still includes significant support for efforts such as preventing wildfires, reducing the environmental damage associated with oil exploration and stabilizing water supplies. And during a Tuesday morning news briefing, as storms continued to batter the state, the governor underscored new proposed funds to reduce the risk of flooding in cities and shore up levees.
But the original proposal calls for about $6 billion in cuts in climate spending over the next few years, with significant cuts from funds previously pledged to accelerate California’s transition to green cars, clean up the water supply, Decarbonize buildings and protect people from the effects of extreme heat.
“It’s true that Governor Newsom has some really difficult decisions to make given the dire budgetary situation. I’m just disappointed that so many of the cuts are coming from climate and environmental solutions that we really need to stave off the worst impacts of the climate crisis,” said Laura Deehan, country director of the nonprofit advocacy group Environment California, in response to the proposals.
Many of the climate cuts are contained in what is called a “budget trigger,” meaning they could be restored next January if the country hasn’t slipped into a recession or if California’s revenues don’t otherwise take the hit the state is currently taking project.
Anyhow, Newsom pointed out that his goal is to avoid much larger cuts to some of these programs by deferring rather than canceling planned spending and finding other sources of funding. One example is a proposal to use $300 million from the State Highway Fund instead of general funding for projects to make roads more bike-friendly and pedestrian-friendly.
California also plans to aggressively pursue federal funding from the massive infrastructure and inflation laws Congress passed in 2021 and 2022 to fill the gap, Newsom said. Deehan noted that ironically, California may have a better shot at some of these competitive federal funding programs since its fiscal position is now direr than many other states.
Environmentalists also noted that the budget released by Newsom on Tuesday is a first draft.
“Today’s budget proposal is just the beginning of six months of negotiations,” said Mary Creasman, CEO of California Environmental Voters. She said her organization wants to use this time to work with allies, lawmakers and Newsom to “show that climate justice is still a priority.”
“Another delay in these investments will further exacerbate the climate crisis. And the cost of inaction will be far greater,” Creasman said.
As California faced record-breaking surpluses in 2021 and 2022, lawmakers passed budgets that provided about $54 billion over five years to advance the state’s climate agenda. But as tax revenues fell due to high inflation and fears of a potential recession, California swung from a $101 billion surplus last year to next fiscal year’s projected deficit of $22.5 billion.
Newsom’s new draft budget calls for an 11% cut in climate funding, or $48 billion, over the next three years to make up the difference.
One of the biggest hits is a $1.1 billion drop in planned funding for zero-emission vehicle, or ZEV, programs, which would account for 11% of expected spending in the space. This includes reducing funds for projects such as expanding the charging infrastructure for electric vehicles in low-income neighborhoods and supporting electric buses.
When asked if he was concerned that such cuts could hamper the state’s plan to be carbon neutral by 2045, Newsom said, “Absolutely not.” He said he’s confident they could bring federal funding to the table now. But the governor also said the private sector needs to help build that EV infrastructure like they did with gas stations decades ago.
“The world has already evolved,” he said. “The markets have already signaled that. There isn’t an automaker that isn’t already aggressively moving in this space.”
And while proposing a $1.1 billion cut in those funds, Newsom pointed out that his budget still includes $8.9 billion to help California transition to clean vehicles.
“We recognize that this transformation offers one of the greatest economic opportunities in the world, and we want to dominate in this space,” he said. “That $8.9 billion is a dominant pillar to express our market focus, and we’re going to see an extraordinary amount of private sector money flowing behind it.”
Of significant importance to Deehan are the proposed cuts to government solar storage programs. Newsom’s budget includes a 30% cut, or $270 million, in a program that incentivizes solar power and storage for low-income utility customers, and a $50 million cut in funding for long-term energy storage projects. Deehan noted that California didn’t suffer severe power outages and other grid problems during last summer’s extreme heat, in part because solar storage had improved, so she said now is not the time to back off such efforts.
Newsom’s budget also includes $100 million in cuts in both drought and wildfire programs. These include cutting funding for projects aimed at making forests on state-owned land more resilient, supporting defensible space inspections and recycling more water.
Two other proposed cuts: A $70 million cut in funding aimed at helping clean up PFAS, or so-called “forever chemicals,” from California water sources, and the cancellation of a $5 million project targeting bottled water -Installed refill stations in public schools.
Republican Assembly Chairman James Gallagher of Yuba City criticized Newsom for failing to allocate new funding to water storage projects, which he says are badly needed as California “jumps between floods and droughts.” Otherwise, Gallagher slammed spending on what he called “pork projects,” saying “it’s high time we refocused our budget on core government functions.”
But David Weiskopf, climate policy director for nonprofit advocacy group NextGen, said cuts in climate programs in response to revenues rising and falling each year are short-sighted.
“The loss of $6 billion in climate finance undoubtedly does more damage to the state in the long term than it saves in the short term,” Weiskopf said.
“Until we take a broader approach, the fate of our state remains tied to the hope that we only have good fiscal years.”
Next, the Legislative Analyst Office will release its analysis of the proposed 2023-24 budget. Then come legislative hearings before a revised budget is released in mid-May. Lawmakers have until June 15 to pass the new budget, which goes into effect on July 1.
https://www.ocregister.com/2023/01/10/newsoms-2023-24-budget-would-slow-spending-on-climate-projects/ Newsom’s 2023-24 budget would slow spending on climate projects – Orange County Register