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Governor’s Funding Plan for Climate, Drought

Governor Brown has released a proposed budget that reaffirms the state’s commitment to boosting drought resiliency and battling climate change. While specifics are likely to change before the budget is finalized in June, here is a summary of key proposals.

  • Cap and trade. California’s recent efforts to combat climate change have been funded from its cap-and-trade program. The program faces an uncertain future because its statutory authority is set to expire in 2020. Partly due to this uncertainty, 2016 cap-and-trade auctions raised a fraction of the money raised in previous years. At the governor’s budget press conference, he announced legislation that would extend the program beyond 2020. Appropriation of cap-and-trade funds in the new budget is dependent on the passage of this bill—which will require a two-thirds vote in both the senate and the assembly. Should it pass, the governor proposes appropriating $2.2 billion for cap and trade, a decrease from last year’s $3.1 billion. As in past years, 60 percent of the proceeds would be for ongoing funding of public transit, affordable housing, sustainable communities, and high-speed rail. The rest is split among one-time investments. This year, the largest sum in the one-time investment pot ($863 million) is for public transit improvements aimed at increasing ridership and decreasing greenhouse gas emissions. Smaller sums include $142 million to fund local climate actions in the state’s most disadvantaged communities and $128 million for projects in forests and urban and agricultural landscapes that remove carbon dioxide from the atmosphere and store it in vegetation or soils.
  • Emergency drought spending. While recent rains have drenched California, the governor’s emergency drought declaration is still in effect, and the new budget appropriates an additional $188 million in one-time resources for drought relief. Roughly half ($91 million) is allocated to CAL FIRE—the agency dedicated to fire protection and stewardship of the state’s forests—to enhance its firefighting capacities and support the removal of dead trees. The drought has contributed to widespread tree mortality, which has raised concerns that the dead trees might fuel future destructive wildfires.
  • Water bond updates. Nearly 80 percent of Proposition 1 water bond funding has already been appropriated (though far less has been awarded for spending). This year, the governor proposes appropriating $248 million from the bond for an Integrated Regional Water Management grant program. These funds are meant to incentivize regional cooperation with the goal of resolving complex water management challenges at a broad scale while balancing social, environmental, and economic objectives. For instance, these funds could foster a regional approach to helping water systems adapt to climate change. An additional $3.8 million would enable the State Water Resources Control Board to enforce the implementation of California’s groundwater law.

Although state money represent only a fraction of California’s total water sector spending (13%—the rest is mostly locally funded), it is an important piece of the funding pie. While the governor’s proposed budget would bring welcome funding to a number of critically important areas, key water challenges continue to experience long-term funding gaps—especially safe water for small rural communities, flood control systems, stormwater management, and ecosystem management.

Learn more

Read California’s Water: Paying for Water (from California’s Water briefing kit, October 2016)
Visit the PPIC Water Policy Center

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