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Proposed 2021-22 State Budget includes investment in climate resiliency, but limited direct funding for cities

January 13, 2021
Gov. Gavin Newsom’s sweeping $227 billion proposed 2021-22 State Budget includes a number of climate resiliency-related items, ranging from wildfire preparedness to electric vehicle deployment. 
 
Due to an unexpected budget windfall of approximately $15 billion, largely in one-time funds, the Governor is putting some of these funds towards supporting climate resilience and recovery.
 
In keeping with his priorities from the past several years, the Governor indicated that wildfire preparedness, which he frames as climate resiliency, will continue to be a budgetary priority. However, unlike previous years, local governments are not receiving the same type of environmental and climate resiliency funding they have in the past. Due to the projected budgetary future, many environmental programs are funded on a one-time, rather than continuous basis.
 
Overall, the Governor’s climate resiliency budget priorities center on wildfire preparedness and forest management, and electric vehicle deployment. While investments in these areas help make the state more resilient to climate change, there is little to no money included in the proposed budget that goes directly to local governments to address issues like sea level rise or implementing climate change adaptation projects. Below, Cal Cities has outlined the various pots of funding related to climate resiliency that pertain to cities.
 
Cap-and-Trade
The Governor’s budget proposes a $1.37 billion Cap-and-Trade expenditure plan, which is up slightly from the $965 million expenditure plan proposed in January 2020. This expenditure plan includes $30 million for safe and affordable drinking water, $635 million for the Governor’s electric vehicle deployment plan, $325 million for community air quality protection, and $355 million for forest health management. In recent years, Cap-and-Trade has included funding for California Department of Resources Recycling and Recovery (CalRecycle) to meet the state’s waste diversion goals. This year, that pot of funding is not included in the Cap-and-Trade expenditure plan, but is included in the Governor’s Climate Catalyst Fund proposal.
 
Forest Management Task Force — Wildfire and Forest Resiliency Action Plan
In 2020, the Legislature and Governor included approximately $90 million for the California Department of Forestry and Fire Protection (CAL FIRE) to enhance their fire protection capabilities.
 
This year, the Governor is proposing another significant investment in CAL FIRE by proposing $1 billion to support the Forest Management Task Force's Wildfire and Forest Resiliency Action Plan. This plan touches on numerous items, ranging from forest health and management to building fire breaks and creating home hardening grant programs.
 
This action plan includes:
  • $512 million for resilient forests and landscapes, including $23 million for urban forestry
  • $335 million for wildfire fuel breaks
  • $38 million for community hardening, including $25 million for home hardening grants
  • $39 million for science-based management
  • $76 million for forest sector economic stimulus, including $50 million for the Climate Catalyst Fund within the California Infrastructure and Economic Development Bank (IBank) to support climate smart agriculture loans to advance climate change-related projects 
Out of this $1 billion plan, $323 million is proposed for early action in 2020-21 to accelerate fire prevention projects that protect communities and other efforts to jumpstart economic recovery in the forest sector.
 
Climate Catalyst Fund
In 2020, the Governor’s January budget proposal unveiled an ambitious new program called the “Climate Catalyst Fund,” with the intent to fund programs to address transportation emission reductions, climate smart agriculture and forestry, and circular economy development and implementation. Due to COVID-19-inflicted budgetary strains, the fund was created, but no money was appropriated into the fund. This year’s budget proposal includes close to $1 billion in funding for two programs to further these goals.
 
Fifty million is proposed for the IBank to support climate smart agriculture loans to advance projects, such as methane reduction, water efficiency, healthy soils, circular economy development, and energy efficiency for food processing. Of note, the Governor’s Administration has indicated that this pot of funding could be used for infrastructure projected, related to the implementation of SB 1383 (Lara, 2016) organic waste diversion mandates.
 
Additionally, $47 million of the approximately $1 billion allocated to the Climate Catalyst Fund is for the wildfire and forest resilience package outlined in this article.
 
Recycling
This year’s budget proposal includes $5 million to CalRecycle to expand pilot programs to increase consumer redemption in communities underserved by recycling centers. With many recycling centers closed in recent years, this funding is much needed to address the lack of redemption centers in California.
 
Disaster and Emergency Preparedness
With California continuing to face COVID-19 and the threat of catastrophic wildfires, the Governor’s budget proposes $256 million to the California Office of Emergency Services (Cal OES) to fund the California Disaster Assistance Account (CDAA). The CDAA assists local governments to serve their communities in the wake of emergency events. This funding will go towards repairing, restoring, or replacing public real property damaged or destroyed during a disaster or to reimburse local governments for certain costs associated with the emergency activity undertaken.
 
Additionally, $67 million this fiscal year and an additional $158 million over the next three years is proposed to fund a large federal flood risk reduction project along the American River. The Governor is also proposing $75 million for deferred maintenance on levees in the Central Valley.
 
Lastly, the Governor proposes $25 million in 2020-21 for Cal OES and CAL FIRE to support implementation of a home hardening pilot grant program. These funds would go to basic retrofits for homes of low-income Californians who live in high fire threat areas.
 
EV Charging
The budget proposal includes $1.5 billion for infrastructure and incentives to support the implementation of the state’s zero-emission targets. Specifically, $1 billion in future revenues for electric vehicle charging and hydrogen fueling stations, and $465 million in Cap-and-Trade funding to improve access to new and used zero-emission vehicles.
 
The budget also proposes statutory changes to extend existing vehicle registration fees currently set to expire in 2024 under AB 8 (Perea, 2013) and authorize the securitization of these future revenues to support the expansion of the California Energy Commission’s Clean Transportation Program.


 
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