Why is so much climate funding still on the table at the end of the legislative year

By Melissa Sparks-Kranz, legislative advocate (environmental quality)

The Legislature still has some significant deals to finalize this session, including the reauthorization of the Cap-and-Trade Program and the initial allocation of the voter-approved Proposition 4 funding. Here's what cities need to know about both pots of funding.

Cap-and-Trade Program

With Cap-and-Trade set to expire in 2030, negotiations are in full swing for a late-session deal. Cal Cities and other local government, transportation, and labor partners have urged state leaders to prioritize climate-safe infrastructure improvements during negotiations.

These negotiations take time, especially when they involve the big three - the Senate, Assembly, and Governor. To make things more complicated, Gov. Gavin Newsom has already made high-speed rail a priority in negotiations and set aside in this year's budget a significant amount of Cap-and-Trade funding for Cal Fire's state costs.

The Cal Cities-led coalition held a rally in July on the Capitol steps, calling for the Cap-and-Trade Program to invest in:

1. Local clean transportation infrastructure
2. Climate adaptation programs, such as sea level rise, flood infrastructure, and organic waste infrastructure
3. Land use and infill development for affordable housing and sustainable communities
4. State and regional clean transit infrastructure
5. Wildfire resilience infrastructure at the local level

Cities should take action and send a letter of support to their Legislators for the coalition priorities that could bring much-needed climate funding to their communities.

Proposition 4

Absent in the final budget deal was funding from the November climate bond. The current fiscal year was supposed to be the first of a multiyear expenditure plan. The budget deal punted first-year funding details to a budget trailer bill that will likely use some Proposition 4 funding to backfill other deficit holes.

Cal Cities and dozens of stakeholder groups that supported the bond pushed back in the budget discussions, arguing that clawing back Prop. 4 funding went against what voters approved in November. Cal Cities anticipates legislators will take up the budget trailer bill in the final weeks of session.

What's next?

Lawmakers have until late August to get any measures out of appropriations and onto the floor for a full, final vote. The final day for lawmakers to send bills to the Governor's desk is Sept. 12.

If state leaders fail to close a deal, Gov. Gavin Newsom could call a special session to reconvene the Legislature on these and other topics that don't get fully addressed by Sept. 12. Cal Cities will keep members updated on the Cap-and-Trade and Prop. 4 climate funding.