Blogs

By: @Elisa Arcidiacono, Townsend Public Affairs, Inc.

California's newly approved $10 billion climate bond, passed through Proposition 4, directs funding toward a range of climate-related initiatives focused on addressing challenges such as wildfires, water accessibility, and climate resilience.

Bond funding is intended to assist local jurisdictions with a variety of issues over the next several years, and includes:

• $3.8 billion for Water Resilience and Management, aimed at ensuring safe, clean drinking water, improving water infrastructure like dams and levees, and preparing for extreme droughts and floods;
• $1.5 billion for Wildfire and Forest Resilience, utilizing funds to mitigate wildfire risks, improve forest health, and invest in early fire detection systems;
• $1.2 billion for Coastal Resilience to support adaptation efforts for sea-level rise, restore coastal ecosystems, and protect against flooding and erosion;
• $1.2 billion for Biodiversity Protection and Nature-Based Solutions to enhance habitat connectivity, protect threatened species, and fund conservation efforts;
• $700 million for Park Creation and Outdoor Access to focus on expanding green spaces, especially in underserved communities, to promote public health and environmental benefits;
• $450 million for Extreme Heat Mitigation for urban greening projects, resilience centers, and other initiatives to reduce the impacts of higher temperatures and heat waves;
• $300 million for Sustainable Agriculture to assist farms and ranches in adopting sustainable practices and improving climate resilience; and
• $850 million for Clean Air and Community Programs, targeting air quality improvements and initiatives in disadvantaged communities.

A minimum of 40 percent of the bond funding is reserved to support vulnerable and disadvantaged communities, promoting an equitable distribution of resources to those most affected by climate change. Funds will be awarded through competitive grants to ensure cost-efficiency, with annual reporting and audits conducted to uphold transparency.

Governor Newsom’s January proposal of the 2025-2026 State Budget, would provide $2.7 billion in funding for the initial year of a multi-year spending plan. This includes competitive grants for the following programs:

• Dam Safety and Climate Resilience Local Assistance Program ($231.5 million)
• Water Quality and Safe Drinking Water and Tribal Water Infrastructure ($183.2 million)
• Flood Management Projects ($173.1 million)
• Water Reuse and Recycling ($153.4 million)
• Salton Sea Management Program ($148.2 million)
• Forest Health Program ($82.2 million)
• Regional Projects in high-risk regions ($79.5 million)
• Local Fire Prevention Grants ($59.1 million)
• Resilient State-Owned Lands ($33.4 million)
• State Conservancies–Watershed Improvement and Wildfire Resilience ($22.4 million)
• Wildfire Mitigation ($9.1 million)
• Coastal Resilience ($30.8 million)
• Sea Level Rise Mitigation and Adaptation ($20.3 million)
• Dam Removal and Related Infrastructure ($8.5 million)
• Urban Greening Program ($46.8 million)
• Fairground Updates ($37.6 million)
• Extreme Heat and Community Resilience Program ($16.1 million)
• Protect and Enhance Fish and Wildlife Resources ($176 million)
• State Conservancies–Supporting Regional Action ($79.9 million)
• Tribal Nature-Based Solutions Program ($9.4 million)
• State Water Efficiency and Enhancement Program ($37.6 million)
• Healthy Soils Program ($35.9 million)
• Invasive Species Projects ($19.9 million)
• Statewide Park Program ($190 million)
• Deferred Maintenance Program ($84.4 million)
• Reduction of Climate Impacts and Creation, Protection, and Expansion of Outdoor
• Recreation ($11 million)
• Development of Port Upgrades to Serve Offshore Wind Generation and Other
• Purposes ($228.2 million)
• Demand‑Side Grid Support Program ($50 million)

The Governor’s proposed budget also incorporates a shift of $273 million from prior state funding obligations to Climate Bond funding. This includes:

• Stewardship of State‑Owned Land ($68 million GF)
• Water Recycling ($51 million GF)
• Dam Safety ($47 million GF)
• Watershed Climate Resilience ($32 million GF)
• Demand‑Side Grid Support Program ($18 million GF)
• Systemwide Flood Risk Reduction Program ($15 million GF)
• Community Resilience and Heat Program ($15 million GF)
• Deferred Maintenance ($14 million GF)
• Home Hardening ($13 million GF)
• Clean Energy Reliability Investment Plan ($32 million Greenhouse Gas Reduction Fund)

Since the Legislature will have to appropriate bond funds through the budget process, these discussions will be ongoing through the summer and into future fiscal years. The exact schedule for fund disbursement will vary based on project readiness and the prioritization of initiatives aimed at addressing climate-related challenges.

When voters approved Proposition 68 in June of 2018, draft guidelines were released approximately three months after passage with the first round of applications due that November. Given the urgency of today’s climate resilience efforts, it is anticipated that the state will begin allocating funds to high-priority projects as soon as possible, with disbursements continuing over several years as projects are developed and implemented. Given the most recent fires raging through southern California, the Governor has stated his intent is to accelerate projects and programs that build water and wildfire resilience.

Because dollars are intended to be distributed on a competitive basis with readiness and urgency in mind, special districts should begin identifying local projects that emphasize the identified buckets and provide solutions for climate-related challenges. Special districts would also be well-advised to develop local and regional support for projects and potential grant applications. Support from overlapping and neighboring local governments, community organizations, labor, business and others can be helpful to success. Identifying multi-benefit projects that support more than one purpose, entity, or community can also be helpful.

After projects are identified, locals should begin engaging with their elected officials in Sacramento to garner additional support that will be valuable in submitting applications once programs are announced later this year.