SACRAMENTO, California — The California Legislative Analyst’s Office warned state lawmakers Tuesday they will have to make “near-term decisions” on spending from the state’s emissions trading market if the program’s revenues continue falling below expectations.
What happened: The warning came in a new report Tuesday summarizing changes in AB 1207 and SB 840, the two new state laws signed by Gov. Gavin Newsom in September to reauthorize the state’s cap-and-trade program through 2045 and determine some spending buckets for its revenues.
If revenues from the cap-and-trade market continue falling flat like they have in the past few auctions, state lawmakers will face a shortfall of over $1.8 billion next year between what they’ve already allocated and what they’ll actually have on hand, according to the Legislative Analyst’s Office.
That’s because state law now spells out minimum annual spending limits for the various buckets, including $1 billion for the state’s high-speed rail project, instead of the previous percentages. What’s more, state lawmakers already planned for an additional $1.5 billion in spending in the next fiscal year alone, including to cover part of the California Department of Forestry and Fire Protection’s operations.
