Governor Releases 2021-22 State Budget
On Friday January 8, 2021, Governor Newsom unveiled his proposed 2021-2022 Budget. The $227 billion budget plan is focused on COVID relief. More than $14 billion has been allocated to support small businesses, support for families most affected by the pandemic, and the safe reopening of schools. Income tax revenues exceeded expectations and the budget projects a surplus of $15 billion, however future shortfalls are expected. Governor Newsom urged the legislature to continue to focus on COVID relief efforts when they reconvene. The Assembly and Senate Budget subcommittees will deliberate the Budget plan through May, when the Governor will release his revised budget (May Revise) that reflects any revenue changes. The final Budget must be adopted by June 15th.  A summary of the Budget can be found here.

Of particular interest to CASA members are the following Budget allocations:

$100 million one-time investment in 2021-22 to the California Alternative Energy and Advanced Transportation Financing Authority Sales Tax Exclusion Program (CAEATFA).  The CAEATFA program offers sales and uses tax exclusions to innovative manufacturers that promote alternative energy and advanced transportation.

$97 million will be deposited in the Climate Catalyst Fund, which is a newly created financing tool to provide revolving loans for climate-related projects.  The Budget allocations in this fund provide $47 million for forest resilience and $50 million for agriculture specific activities (i.e., methane reduction projects, equipment replacement, water efficiency, healthy soils, and energy efficiency for food processing).

$1.5 billion for zero emission vehicles to implement Executive Order N-79-20, which sets targets for phasing out gas-powered passenger vehicles by 2035 and for medium and heavy-duty vehicles by 2045.  The plan includes:

  • Securitizing approximately $1 billion of future revenues to increase pace and scale of the construction of electric vehicle charging and hydrogen fueling stations.
  • $50 million to support the installation of zero-emission vehicle charging stations at state owned facilities.
  • $465 million to improve access to new and used zero-emission vehicles, including passenger cars and trucks, medium and heavy-duty vehicles, and off-road equipment.

$438 million to accelerate biodiversity protection and habitat restoration as outlined in Executive Order N-82-20, which establishes the goal of conserving 30 percent of California’s land and coastal waters by 2030.  This funding specifically will be directed as follows:

  • $248.6 million for the restoration of natural areas and ecosystems, including $125 million from Proposition 68 to support multi-benefit water quality, water supply, and watershed protection and restoration projects.
  • $183 million for flood management.
  • $6.5 million in 2021-22, and a total of $16.4 million over two years from Proposition 68 for the Ocean Protection Council to support projects that improve biodiversity and climate resilience by increasing coastal and marine ecosystem health.

$1.37 billion Cap and Trade Expenditure Plan includes the following allocations of interest:

  • $325 million for the Community Air Protection Program (AB 617).
  • $315 million for Clean Trucks, Buses & Off-Road Freight Equipment.
  • $54 million for the Safe and Affordable Drinking Water Program.
  • $30 million for the Healthy Soils Program for on-farm soil management practices that sequester carbon.

The Budget summary document also includes a statement on “Circular Economy” and notes that changes need to occur in the State’s waste and recycling systems. In 2021, the Budget notes that CalRecycle will “embark on an evaluation of existing program grants, loans, and payments to identify opportunities to better align with a circular economy approach, combat climate change, and support economic recovery.”