Major California Climate Bond Inches Closer to Ballot, but Hurdles Remain

California lawmakers are inching closer to deciding what to include in a major climate bond that would go before voters in November, paring it down in the face of significant budgetary pressures.

They initially proposed a $15 billion bond in the form of two bills last year to address pressing climate issues, but a new draft from a legislative working group could include variations from $6 billion to $13 billion, said Assemblymember Eduardo Garcia (D-Coachella) who is co-leading a working group on the bond.

In addition to the state’s rising budget deficit, the proposal could be challenged by competing bond ideas and a shrinking bonding capacity. Its primary opponent is a $14 billion education bond to construct and modernize schools that Gov. Gavin Newsom has supported, according to Assemblymember Lori Wilson (D-Suisun City), who is co-leading the working group. Lawmakers hope he approves splitting the state’s estimated $20 billion bonding capacity between the two bonds.

“The governor’s made it clear that the education bond is his highest priority,” Wilson said. “I believe that whatever agreement the Legislature gives him, he will, subsequently, sign off on it.”

Meanwhile, more than 170 nature and environmental justice-oriented groups are pressing lawmakers and Newsom to ensure the bond is at least $10 billion to address priority areas, including extreme heat, wildfires and sea-level rise.

There are also competing ideas about what the climate bond should cover. Although the state usually uses bond dollars for long-term benefits such as infrastructure projects, environmental groups would like lawmakers to allot funds for climate efforts and programs — electric vehicles, community-based programs, coastal resilience, etc. — which the governor has cut from his proposed budget.

California leaders devised a $54 billion plan to fight climate change two years ago. However, they cut over $3 billion from the budget last year and propose more than $6 billion in cuts this year.

“It is unfortunate that we’ve had to draw back some of the great wins we’ve had over a couple of years of surpluses as it relates to climate; some of those can be captured in the bond,” Wilson said.

The working group is reviewing climate cuts to the budget and will prioritize infrastructure projects related to water systems, such as desalination, flood control or levee infrastructure, Wilson and Garcia said.

“Some of those proposed cuts could be backfilled by the bond if they meet the criteria of bond law that you’ve got to build stuff, and it’s got to be for public benefit,” Garcia said.

Lawmakers have also said they may include funding for offshore wind in the climate bond. Earlier this year, Assemblymember Rick Chavez Zbur (D-Hollywood) outlined a $1 billion bond for offshore wind infrastructure that’s on pause “with a promise to consider including the funding request in the larger climate bond,” said Vienna Montague, Zbur’s communications director, in an email.

Climate and environmental groups gathered in front of the State Capitol on Wednesday, calling on the Legislature and the governor to speed up the approval of a climate bond.

“Given the nature of the accelerating climate crisis, anything that we need to do but don’t do today is going to create a more damaging and more expensive situation down the line,” said David Weiskopf, senior policy advisor with NextGen California.

Mike Young, senior political and organizing director with California Environmental Voters, said he still hopes for a $10 billion bond that returns funding to programs such as Transformative Climate Communities. Newsom previously zeroed out funding for that initiative, which is for community-led neighborhood projects to reduce greenhouse gas emissions, and did not allocate any funding to it in this year’s proposed budget.

“The state might be in a budget deficit, and we might be having hard economic times, but the climate doesn’t care,” Young said. “The chances of a climate bond are looking pretty good, and let’s hope that stays that way.”