Gavin Newsom proposes climate change cuts to alleviate $22.5 billion budget deficit
Rachel Schilke
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Gov. Gavin Newsom (D-CA) announced a plan to reduce climate change programs to combat a projected $22.5 billion budget deficit.
Newsom announced the 2023-24 state budget on Tuesday, stating that he had plans to delay funding and reduce investments in areas such as zero-emission vehicles, climate change programs, and child care slots, among others.
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Overall, $7.4 billion in funding will be delayed, and $5.7 billion will be reduced or pulled back.
The $297 billion budget plan comes at a time when the state saw a significant drop in revenues, for which the governor’s administration blamed high inflation, a rise in interest rates, and the volatile stock market.
Last summer, Newsom believed there would be a $100 billion budget surplus for this year, according to the Los Angeles Times. Now, the state is expecting a $22.5 billion deficit. To alleviate the financial strain this will cause in several programs, funds will be reallocated to other areas.
“That makes us very mindful of the uncertainty of this next calendar year, and as a consequence of that, we’re not touching the reserves because we have a wait-and-see approach to this budget,” Newsom said.
He added that he felt confident that the state will be better positioned “than most other states to weather what’s to come, to weather a recession.”
The 2023-24 budget plans to allocate $48 billion for climate change investments, compared to the $54 billion that was part of the 2021 and 2022 budgets.
“Given the projected decline in General Fund revenues, the Budget includes reductions across several climate programs, which are partially offset by shifts to other fund sources,” according to the budget. “If there is sufficient General Fund in January 2024, most of these reductions will be restored.”
The budget will also shrink funds for zero-emission vehicles, from $10 billion in the 2021 and 2022 budgets to $8.9 billion, particularly in “communities that are the most affected.” Funds worth $1.4 billion will be shifted to “Cap and Trade” funds.
“This includes targeted investments in disadvantaged and low-income communities by increasing access to the benefits of clean transportation and by continuing to decarbonize California’s transportation sector and improve public health,” per the budget.
Eyes will be on the state to see how it fulfills its goal to achieve 90% clean energy by 2035 and carbon neutrality no later than 2045, which was part of sweeping legislation that Newsom signed in September 2022.
Over the next two decades, the California Climate Commitment is supposed to cut air pollution by 60%, reduce state oil consumption by 91%, and reduce fossil fuel use in buildings and transportation by 92%.
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With a reduction in climate change programs and a delay in zero-emission vehicle funding, it will be up to the state to determine how to reach those goals.
The state legislature has a deadline of June 15 to approve the state budget for the next fiscal year. It is the first budget that the governor has been forced to make significant reductions on since taking office in 2019.