Budget cuts disrupt CA’s zero-tailpipe dream, state may issue bonds

Charging stations and electric car rebates were supposed make the 2035 plug-in mandate easier on working-class Californians. But now these programs are running on fumes. Voters, after all, didn’t want to raise income taxes to pay for electrification. To keep the dream alive, Newsom hopes to juice the state with federal money, and may ask the legislature for a bond issue. CalMatters explores.

Environmentalists slammed Gov. Gavin Newsom for slashing billions of dollars from initiatives that the governor has repeatedly called top priorities: efforts to combat climate change and transition to zero-emission vehicles.

Facing a projected $22.5 billion deficit, Newsom today proposed to eliminate $6 billion in climate spending in his 2023-24 budget. The governor helped push a five-year $54 billion climate package approved by the Legislature during last year’s session, but he now proposes to cut it to $48 billion.

More than half of those proposed cuts – $3.3 billion – come from the state’s clean transportation initiatives. Newsom hopes to offset those reductions with federal funds and perhaps a new bond reserve, but the move comes just five months after the state approved a historic mandate for electrifying cars. 

Now climate advocates are questioning whether the state will be able to fund its ambitious electrification efforts and ensure California transitions to clean cars as it faces an economic downturn. 

“We recognize the financial situation, but this is exactly what we’ve been nervous about,” said Mike Young, political and organizing director at California Environmental Voters, an advocacy group. “We actually need to be investing and defending more of our climate investments and really pushing for that. We can’t get out of our situation if we’re going backwards.” 

Money for zero-emission vehicle incentive programs, such as rebates for car buyers, and charging infrastructure would be cut by $2.5 billion. About $1.4 billion of that amount would be shifted to the state’s fund for its cap-and-trade program, a market that is paid into by fossil fuel companies. That leaves a net decrease of $1.1 billion.

At a press conference today, Newsom said he is not concerned that the $1.1 billion cut would keep the state from meeting its electrification goals. He said climate and transportation was cut “because of the magnitude” of the investment those areas already had. He added that he is confident that California could make up those shortfalls with federal Inflation Reduction Act dollars. His budget plan also says he might ask the Legislature for a bond issue.

“We’re committing a $48 billion package, which is just an unprecedented investment in this space,” he said. “Our commitment is firm.”

Still, those dollars would have been used to build more charging stations in disadvantaged communities and provide electric car subsidies for people who cannot afford to buy electric cars.

This article originally appeared in CalMatters. Read the whole thing here.

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