Today, Governor Newsom’s proposed a $222.2 Billion State budget for 2020-21. In the budget, he proposes significant investment in CalPERS, environmental and emergency preparedness and response spaces. It draws on multiple funding sources, including the general fund, greenhouse gas funding, and a proposed climate resiliency bond, among others. Many of the proposals will be of interest to special districts and could provide additional grant funding opportunities if implemented.
The Budget reflects the following priorities to address climate interventions:
- Transportation—Decarbonization in the state’s largest sector of emissions by providing clean vehicles, clean fuels, low-carbon transportation options, and transit-oriented development, with enhanced prioritization on short-term environmental and public health benefits in disadvantaged and vulnerable communities.
- Natural and Working Lands—Strategies that increase sequestration and reduce emissions from the state's forests, agricultural lands, and conservation lands, and that support resilience across water systems.
- Climate Resilience—Assistance to regions and communities to become more resilient in the face of current and future climate impacts.
The climate budget includes $12 billion over the next five years. Three key areas of the climate budget are a proposed climate resilience bond, cap-and-trade expenditures to continue the transition to a carbon-neutral economy, and a new Climate Catalyst Fund. For additional information see the Climate Resilience chapter starting on page 117 and the climate resilience section of the Infrastructure chapter starting on page 182.
Of particular interest:
- Climate resiliency bond: The projected climate budget relies heavily on the proposed $4.75 climate resiliency bond being passed by voters on the November’s ballot. 80% of these funds would be allocated to address nearer term risks such as floods, drought and wildfire, with the remaining funds aimed at addressing longer term climate risks such as sea level rise and extreme heat. The proposed bond includes $250 million for community resilience; $2,925 million for drinking water, flood, drought; $750 million for wildfire; $500 million for sea level rise; and $325 million for extreme heat. (See page 119)
Sustainable Groundwater Management Act: The climate resilience bond proposes $395 million for projects to implement Groundwater Sustainability Plans. In addition, the Budget proposes $60 million General Fund to support planning and water trading pilot projects across critically over-drafted basins, and water efficiency improvements in depleted groundwater basins. For additional information, see both the Climate Resilience and Infrastructure chapters. (See page 122, 128)
Cap and Trade Expenditure Plan: $965 million Cap and Trade Expenditure Plan, which includes a $25 million ongoing investment to provide support for programs, including support for the Fifth California Climate Change Assessment. (See page 124)
Climate Catalyst Fund: The Budget includes a $1 billion General Fund investment ($250 million in 2020-21, with additional funding in later years) for a Climate Catalyst Fund, to be administered by the state’s Infrastructure Economic Development Bank in consultation with the Strategic Growth Council and the Labor and Workforce Development Agency. Climate Catalyst Fund projects would be focused on transportation emission reduction, climate smart agriculture and forestry, and the circular economy – including municipal waste and recycling, compost, wood waste collection and utilization, and carbon/methane capture and utilization. (See p.127)
- Draft Water Resilience Portfolio: In addition to the funds proposed in the climate resiliency bond, a one-time $103 million General Fund expenditure to support efforts and $35 million in ongoing funding to support various resources investments that align with the portfolio. (See page 119, 128 and the Infrastructure chapter)
In Emergency Preparedness and Response, the Governor has proposed a $2 Billion program to fight catastrophic wildfires and other disasters:
The Budget continues to build on emergency response and preparedness funding priorities from 2019-20, including improving the resiliency of the state’s critical infrastructure, minimizing impacts of PSPS events, and wildfire prevention efforts. For additional information see the Emergency Preparedness and Response chapter starting on page 129.
Of particular interest:
- Wildfire Forecast and Threat Intelligence Integration Center: The Budget includes $9 million ($8.8 million General Fund) and 22 positions across Cal OES, CAL FIRE, the Military Department, and the PUC to begin implementation of the Wildfire Forecast Center. This new Center will derive data and intelligence from multiple sources to build accurate, comprehensive, and timely weather impact information. This data will be used to develop forecasts for tracking and predicting critical fire weather systems and improve situational awareness of fire threat conditions in real-time. (See page 131)
- California Disaster Assistance Act (CDAA): $16.7 million one‑time General Fund to increase the amount of funding available through CDAA, which is used to repair, restore, or replace public real property damaged or destroyed by a disaster, and to reimburse local government costs associated with certain activities undertaken in response to a state of emergency. This augmentation increases total CDAA funding included in the Budget to $79.3 million. (See page 132)
- Community Power Resiliency: A proposed $50 million one‑time General Fund to support additional preparedness measures that bolster community resiliency. This proposal will support a matching grant program to help local governments prepare for, respond to, and mitigate the impacts of power outages. There are no details on who specifically is eligible for these matching grant funds, but CSDA will work to ensure special districts have access to any proposed funds that move forward. (See page 132)
What does this mean for special districts? It is clear the Governor is a driving force behind the proposed climate resiliency bond and will be dedicated to working with the legislature to get it passed and signed in time to qualify for the November 2020 ballot. This means it will move quickly, have many voices competing for funds and interests, and CSDA will need to ensure the funding is inclusive of special districts. Additionally, infrastructure investments will continue to focus on climate adaptation and sustainability needs with wildfire mitigation a continuing priority, which may create opportunities for additional funding and will likely be a major focus and central focus of legislation this year.
CalPERS
Similar to the 2019-20 budget, the Governor is proposing making an additional payment towards the State’s share of the $250.6 unfunded pension Liabilities in the California Public Employees’ Retirement System (CalPERS). The Governor has proposed making an additional $1.1 billion in payment s above their normal costs in an effort to save money in future years for the State. What does this mean for special district? Well, not a lot. The additional investments from the State will do nothing to reduce unfunded liabilities for anyone other than the State. However, the additional dollars will reduce drawdown on the fund to liabilities. The reduced drawdown allows for greater investment, which in turn has the potential to increase returns. Increased returns reduce annual payment increases. So, in this case, while special districts will not see a direct benefit, any increased contributions from the state will have some benefit to the CalPERS system as a whole.
For more information on the Governor’s budget visit the Department of Finance budget website at http://www.ebudget.ca.gov/.