SACRAMENTO — Fewer rebates for electric-car buyers. No new oil and gas industry regulators. Less money to preserve wildlife habitats.
Gov. Gavin Newsom’s proposed spending cuts to balance a state budget mauled by the coronavirus pandemic have angered numerous progressive constituencies, but perhaps none more than environmental activists who were suspicious of him even before an estimated $54 billion deficit materialized.
“It’s not his priority,” said Kathryn Phillips, director of the Sierra Club California, one of the state’s largest environmental groups. “For whatever reason, and I’m still trying to figure it out, he isn’t what we expected.”
Newsom’s budget would cut funding for environmental protection by roughly $680 million from the current year. It also suggests a spate of cuts to related special funds, money earmarked to fight climate change and restore wildlife habitats. Environmentalists warn that his cuts could make it impossible for the state to reach its goals for reducing greenhouse gas emissions.
Administration officials said the state must make painful choices to keep funding intact for core environmental regulatory and safety programs. They also point out that the governor is proposing to boost spending for wildfire preparedness by $90 million and would preserve funding to enforce new clean drinking-water rules.
“We all realize that we have to adapt and make sacrifices that we didn’t think six months ago we would have to — we didn’t even contemplate,” said Jared Blumenfeld, California’s secretary for environmental protection.
He added, “We’re not going backwards — we are looking forward and understanding how we can adapt to a very different reality than we faced in January.”
Newsom was on shaky ground with environmentalists even before proposing this year’s cuts. They were incensed by his veto of a bill last year that would have adopted into state law the federal Clean Air Act, Clean Water Act, Endangered Species Act, Fair Labor Standards Act and other regulations as they existed before President Trump took office.
Newsom said the bill wouldn’t have given the state any new authority, but his move stirred resentments that have carried over to this budget cycle.
“I know there are people within his horseshoe who are not fond of environmentalists,” Phillips said.
Among the cuts in Newsom’s proposed budget that have stirred the most opposition among environmentalists:
Cutting electric vehicle rebates
Even in his first budget plan in January, before the pandemic hit, Newsom proposed to cut spending on rebates for electric-car buyers nearly in half, from $230 million to $125 million. His revised budget could shrink the funding pool even further and possibly end most rebates.
The state’s primary funding source for vehicle rebates, revenue from cap-and-trade credit auctions, is expected to shrink because emissions have dropped during the economic shutdown. And Newsom wants revenue that does come in to be spent in other areas first, including improving air quality in low-income communities, supporting forest health and fire prevention and providing safe drinking water.
Bill Magavern, policy director of the Coalition for Clean Air, said Newsom’s proposal is “disturbing” because the state could end nearly all incentives for people to switch from gas-guzzlers to zero-emission vehicles.
“It could end up being zero,” Magavern said of cap-and-trade money set aside for electric-car rebates. “Budgets are expressions of policy priorities.”
Emissions from the transportation sector are the largest source of greenhouse gases in California, accounting for roughly 40% of total output. The state has stoked electric-car sales in recent years by offering rebates to buyers.
Newsom’s administration also cut the size of rebates last year, when the state had a surplus of billions of dollars.
Blumenfeld, the state environmental protection secretary, said Newsom is giving top priority to programs that promote emergency preparedness or environmental equity for vulnerable communities.
“We can stand proud and say even during these difficult times, we are committed to meet our ambitious goals,” he said.
Administration officials noted that the governor’s proposed budget includes $50 million to fund projects to expand the state’s patchy electric-vehicle charging infrastructure.
But the proposal to slash electric-car incentives faces deep-seated opposition from state legislators.
Assemblyman Phil Ting, the San Francisco Democrat who chairs the budget committee, said Newsom’s administration has inappropriately tried to give itself extra control over spending cap-and-trade revenue.
Ting said lawmakers, who pass the budget, will push back hard to ensure there is still funding for clean car rebates, particularly as people avoid public transit during the pandemic.
“You’re not going to be able to have crowded Muni buses and BART trains as they normally are during rush hour,” he said. “We’re at a juncture where the clean transportation market is really starting to take hold.”
Newsom’s budget would also sweep $83 million from the state’s Air Pollution Control Fund, money that could be spent on clean transportation, and redirect it to offset cuts to clean water and toxic substance control programs.
“This account is for the remediation of air pollution,” Assemblyman Richard Bloom, D-Santa Monica, said at a hearing Tuesday. “Not to fix our general fund cash flow problem.”
Withdrawing climate bonds
In another blow to climate activists, Newsom has withdrawn his support for a $4.75 billion environmental bond proposal on the November ballot. The bond would have included projects to address immediate dangers of climate change such as wildfires, drought and sea-level rise.
Newsom’s administration has said projects could still move forward with funding from the federal government or private-sector investors.
However, some legislators have suggested they could push ahead with a bond proposal of their own. They say climate projects could stimulate the economy during a recession, and the idea to revive a bond proposal has drawn support from environmentalists and business groups.
Adrian Covert, vice president of public policy for the Bay Area Council, the business advocacy group, said losing Newsom’s support for a bond was disappointing, but that the governor faced “impossible choices.”
Covert said the council still hopes a plan can come together: “California has a great opportunity to put people back to work today to make the state more resilient for the climate changes of tomorrow.”
Scaling back oil regulators
Newsom has abandoned a proposal to hire more regulators to police the oil and gas industry. He has withdrawn a plan for the Department of Conservation to spend $24 million a year to hire 128 more staffers, including geologists and engineers.
Those employees would have increased the state’s oversight of oil drilling and investigated spills. Newsom’s initial budget proposal said the department is “inadequately staffed” to handle all its responsibilities.
The oil industry would have paid for the positions through fees — they would not have been funded by the state’s general fund.
Wade Crowfoot, state secretary for natural resources, said the new positions were withdrawn “due to COVID-related economic issues impacting that sector and our fiscal health in our state.”
He added, “But rest assured that (the state) continues to ensure full regulatory oversight, including field inspection, witnessing of tests.”
Environmentalists accuse Newsom of bowing to pressure from fossil-fuel industry lobbyists.
“His failure to prioritize clean transportation is frustrating,” said Magavern of the Clean Air Coalition.
Cutting habitat conservation fund
Newsom has proposed a budgetary maneuver that could reduce how much land the state sets aside to preserve wildlife habitats.
The governor wants to take $19 million out of the Habitat Conservation Fund every year going forward and use the money to help avoid deeper cuts to the Department of Fish and Wildlife and support its enforcement efforts.
The fund, which voters created in 1990, has paid to preserve more than 542,000 acres of wildlife habitat. It expires this summer, but lawmakers agreed last year to continue it for 10 years.
Kim Delfino, an environmental attorney and former California director for Defenders of Wildlife, said the proposal to ax a popular program shows how Newsom has been a “little bit of a mixed bag” on the environment.
“It’s a rough budget year,” Delfino said. “There’s cuts to everything. The question, is are we making the best cuts?”