California Gov. Newsom Proposes Reducing Climate Change Funding Amid $22 Billion State Budget Deficit

 California Governor Gavin Newsom announced Tuesday that he plans to reduce billions of dollars in investments initially slated for climate change programs and delay other funding for major programs amid a $22.5 billion state budget deficit.

Newsom unveiled the state’s $297 billion budget plan for the fiscal year 2023-24, in which the Democrat governor reportedly said he carefully preserved California’s reserves, cautioning against a nationwide recession.

“That makes us very mindful of the uncertainty of this next calendar year — and as a consequence of that — we’re not touching the reserves because we have a wait-and-see approach to this budget,” Newsom said, according to The Los Angeles Times.

Budget cuts include about $6 billion pulled away from programs designed to boost zero-emission vehicles in low-income neighborhoods and replace greenhouse gas vehicles like delivery trucks, airplanes, rail lines, and others, KCRA reported.

Politico noted the governor has also proposed to delay spending billions of dollars on public universities, transit, behavioral health, building decarbonization, and watersheds.

The California Republican Party told KCRA that Newsom has failed to handle issues like homelessness and wildfires despite record spending.

“Now with a massive budget shortfall projected, it’s time for Gavin Newsom to finally get serious about smarter spending to resolve the many issues that are plaguing our state and driving long-time residents away,” party Chairwoman Jessica Millan Patterson said in a statement.

The Los Angeles Times reported that Newsom and his administration blamed the drop in the state’s revenue on high inflation, an unpredictable stock market, and interest rate increases sparked by the Federal Reserve.

The governor said, however, that he felt confident California would be in a better place “than most other states to weather what’s to come, to weather a recession.”

California projected a deficit after holding onto a budget surplus for the past several years.

The Legislative Analyst’s Office published a report toward the end of last year emphasizing the projected $25 billion deficit, which they say is primarily due to “lower revenue estimates.”

Fox News reported that analyst officials said the state faces the projected deficit mainly because tax revenues are about $41 billion lower than expected.

“Spurred by pandemic-related federal stimulus, the U.S. economy entered a period of rapid expansion in the summer of 2020 that extended through 2021,” the LAO wrote. “Over the last year, however, evidence has mounted that this rapid economic expansion was unsustainable.”

The state’s last budget was $308 billion with a $97 billion surplus; the year before that, the budget was $263 billion with a $76 billion surplus. The state currently has $35.6 billion in reserves.

Officials noted that if the state’s reserves aren’t enough to solve the deficit, the legislature will need to cut spending, boost revenues, and possibly move costs around, adding that the challenging economic environment is harming revenues.

The office noted that their revenue estimates “represent the weakest performance the state has experienced since the Great Recession.”

“It’s not insignificant, but it’s also manageable,” Legislative Analyst Gabriel Petek said. “We don’t think of this as a budget crisis.”

Newsom’s administration reportedly said the deficit was “realistic and reasonable.”