Lawmakers skeptical of Newsom’s proposal to tap climate funding for water, transit

By Camille von Kaenel | 05/17/2024 06:25 AM EDT

Newsom wants to tap proceeds from cap-and-trade auctions to help backfill a $27.6 billion budget deficit.

SACRAMENTO, Calif. — Lawmakers on Wednesday gave a chilly reception to Gov. Gavin Newsom’s proposal to backfill budget cuts to transportation and environmental programs with proceeds from the state’s cap-and-trade auctions.

Faced with a $27.6 billion budget deficit, Newsom last week proposed shifting $1.7 billion of general fund spending this year, and $3.6 billion over the next five years, to the Greenhouse Gas Reduction Fund as part of his May revision to his budget blueprint.

Lawmakers at Assembly and Senate budget hearings on Wednesday pushed back.


“We should have a healthy debate in the state of California as to what the revenue that comes in from the cap-and-trade should really be spent on,” said Assemblymember Steve Bennett, the chair of the Assembly Budget subcommittee on the climate crisis, resources, energy, and transportation.