2022 CA Budget Cycle In Review

It’s been a historic year for government action on climate change–finally. In August, the Biden administration passed the Inflation Reduction Act, unlocking the largest infusion of federal dollars to tackle climate change in US history. Amidst a $97.5 billion budget surplus, California allocated an enormous $39 billion over five years toward climate resilience to build on the $15 billion from last year’s budget. California also passed four bold climate proposals from Governor Newsom’s administration, including a ramp-up of clean electricity targets and long awaited requirements to protect communities from the siting of new oil wells. 

But despite these considerable gains, 2022 has also been a devastating year of unprecedented climate disasters. Record-shattering heat waves suffocated the Northeast and California, while flash floods and severe storms drenched Missouri and Alaska. In addition to worsening climate events, social inequities deepened as the wealthy grew wealthier while everyone else struggled to recover from a downturned economy and lingering effects of COVID-19. This is evident in California’s budget surplus which topped out at almost a staggering $100 billion due to contributions from top-earning taxpayers who amassed even more wealth during the pandemic. Meanwhile, California residents faced mounting utility debt and “more than half of California households with incomes below $50,000 had difficulty paying for basic expenses such as food, housing, and medical costs in March and April” according to the CA Budget and Policy Center. 

California is responding to these environmental and economic challenges with massive climate spending and far reaching climate policy. And our team at The Greenlining Institute is celebrating this progress. However, it will take more than accelerated funding in a single prosperous budget year to counteract decades of redlining and disinvestment that has led to deeply disparate outcomes in wealth, climate risk, and pollution exposure. The question we must ask is: how do we sustain this year’s momentum to address long-standing inequities that hamper our climate progress?

At the Greenlining Institute, we are shaping and advancing critical state budget items that will help us move toward a world where communities of color can build wealth, live in healthy places filled with economic opportunity, and prepare for the impacts of climate change. As we shift our focus to implementing California’s historic budget to maximize equity outcomes, we offer a summary of some of the key strategies we championed this year that made it into the budget and some items that were left out.

The state is offering economic relief to help Californians pay their energy bills and weather inflation:
  • Out of the $17 billion inflation relief package, the state dedicated $9.5 billion in direct tax refunds of up to $1,050 per resident.
  • The state also allocated $1 billion to help low income Californians pay off utility energy debt. Although at least $2 billion is needed to address the full scale of the crisis, this funding will go a long way to help low-income Californians keep the lights on. 
California is advancing a suite of holistic strategies to build community resilience to climate change:
  • The state put $110 million towards the Community Resilience Centers program. This new program will fund resilience centers at trusted community institutions that can offer multiple services, like air filtration, backup energy, cooling, and more to support communities during acute climate disasters like extreme heat and also in the long term. We will continue to push for additional program funding to expand access to resilience centers across the state.
  • California also dedicated $182 million for the new Equitable Building Decarbonization program to holistically upgrade homes to be more energy efficient, safe, and prepared for climate impacts like extreme heat.
  • The state committed a total of $237 million towards Urban Greening and Urban Forestry programs. This funding will promote tree planting, expanding green space, and a new set aside of $117 million for school greening. Together, these investments will increase shade to address extreme heat and reduce pollution amongst other crucial benefits.
  • California also continued to invest in foundational programs that advance community-led climate resilience by dedicating:
    • $10 million to the Regional Climate Collaboratives program to help communities build the networks, skills, and plans needed to effectively compete for climate funding.
    • $165 million to the Transformative Climate Communities program to fund coordinated community-driven projects that promote climate resilience and reduce greenhouse gas emissions.
This year’s budget helps low income communities of color access zero emission vehicles (ZEVs) but offers less funding than anticipated for mobility equity projects and no funds for transit service:
  • This budget cycle, the state allocated $6.1 billion towards the $10 billion zero emission vehicle package. This included $311 million for transportation equity vehicle incentive programs like the Clean Vehicle Assistance Program and Clean Cars For All that will help low income communities of color afford and access clean vehicles, $2 billion for zero emission trucks and buses, and $484 million for charging infrastructure. We originally anticipated the state to dedicate $419 million towards holistic mobility equity projects like Sustainable Transportation Equity Project and Clean Mobility Options. Unexpectedly, however, the state committed a lower amount: $55 million this year and less than $339 million for mobility projects in future years. We will continue to closely track and advocate to ensure the state follows through on funding allocated for the ZEV package moving forward.
  • The budget also lacked crucial funding for transit service. Notably, the Governor vetoed AB 1919, which would have established a pilot program to provide free transit for youth. We will advocate this next budget cycle to secure $126 million to fund the first year of a free transit pilot for youth. Additionally, the final budget did not include the Governor’s previous proposal to fund three months of free public transit. 
California is initiating an advanced pay pilot to increase community access to state grant programs:
  • We are excited to see the state put forth an advance pay pilot program to begin addressing barriers that communities experience to accessing state grant dollars. Currently, most state agency grant programs provide grant funding through a reimbursement model. However, this can be challenging for smaller, community-based organizations who may lack the cash reserves to pay for project expenses up front–many of which are located in formerly redlined or under resourced communities. If California’s leaders want to realize their commitment to invest in low-income communities and communities of color, they must remove bureaucratic hurdles. Through this new pilot, the state will allow six grant programs to offer more comprehensive advance pay under certain conditions. We are excited to monitor the development of these pilots and push for the expansion of advance pay across all state grant programs in the future.
The state is beginning to build infrastructure to advance a coordinated statewide racial equity strategy:
  • The Governor passed an executive order that takes meaningful first steps to institute a statewide approach to advance racial equity. This comes out of years of advocacy from the Greenlining Institute and our partners to establish a statewide Office of Racial Equity through SB 17. The executive order directs the Governor’s Office of Planning and Research to establish a Racial Equity Commission that will produce a statewide Racial Equity Framework to help advance racial equity in California. We look forward to working closely with the Newsom administration to codify SB 17 and the Racial Equity Commission next year.
The budget includes other critical investments to advance equity:
  • $4 million to support digital equity planning so that California is in the best position to access $2.75 billion in federal funds to address digital literacy gaps.
  • $5 million to the Department of Housing and Community Development to explore policies to ensure homes have a safe indoor air temperature and protect people from extreme heat. 
  • A number of programs aimed to address extreme heat and advance community resilience, including $50 million for the Extreme Heat and Community Resilience Grant Program to coordinate the state’s activities related to extreme heat and $125 million for the Regional Resilience Planning and Implementation Grant Program to advance regional climate resilience planning.

While 2022 will go down as an unprecedented year for climate policy, it must be the first of many–in both good and bad years–especially since we are likely to face a more constrained state budget in 2023. We are running out of time to make progress for our communities but we know what actions we must take. And so we call on our lawmakers to continue pushing forward. We must keep up the momentum. There is no other choice.