Legislative Updates

Governor Newsom’s revised budget and Cap-and-Trade reauthorization proposal were both released last week and are currently dominating conversations in Sacramento. Due to the federal policy upheaval, economic uncertainties around tariffs, a volatile stock market, and the Los Angeles fires, the Governor’s office projected a $12 billion deficit for the California State Budget Year 2025-26. This is a significant shift from the projected budget surplus in January. 

The May Revision did not respond to advocates’ concerns about using Proposition 4 funds to backfill for General Fund commitments made in previous years. Instead, the Governor’s budget maintains the $273 million of backfill included in the January proposal and allocates additional Prop 4 backfill ($46 million) to fund the development of offshore wind energy. In Sacramento meetings, SBC has continued to share concerns about using Prop 4 as backfill, a perspective that most legislators agree with.

On the Cap-and-Trade front, the Governor is suggesting a “clean reauthorization,” which would mean few major changes to the mechanics of the program. His proposal does not address the ongoing allocations from the Greenhouse Gas Reduction Fund (GGRF) — that is, the programs like High Speed Rail, Affordable Housing and Sustainable Communities, and Low Carbon Transportation that automatically receive Cap-and-Trade revenue every year. However, Newsom would like to use the leftover GGRF (also called the discretionary allocations, which are budgeted annually as one-time expenditures) to pay for $1.54 billion of CAL FIRE’s operational expenses and lighten the load on the state’s General Fund. The legislature has already been pushing back on this idea, which would use up almost all of the discretionary GGRF and poses other budgetary risks.

In this environment of economic uncertainty — and with big questions looming about how to achieve California’s climate goals, how to address the high cost of living, and the best way to spend limited dollars — we anticipate robust discussions between the legislature and the Governor’s Administration going forward. The SBC team is monitoring this process and what it all means for the Sierra Nevada region and priority funding streams for wildfire resilience, land conservation, affordable and achievable housing, and the energy transition.

Lastly, May 16 was the final day for legislative policy committees to consider bills introduced in the house they started. Most bills are now in their respective appropriations committees, and those with a price tag over $50,000 sit on the Appropriations’ suspense file, where bills that would cost money to implement are routinely rejected, especially in a deficit year. SBC and Sierra Consortium priority legislation including SB 427 (which would permanently authorize the Habitat Conservation Fund), AB 491 (which would codify the nature-based solutions climate targets as an official state goal), and AB 900 (which would support science-based management of 30×30 lands) have moved out of their policy committees and await their fate in Appropriations.

Also – We’re hiring a Wildfire Resilience Coalition Project Coordinator and the deadline to apply is this coming Tuesday!