On Monday January, 10th, Governor Newsom proposed a $286.4B budget which features major state issues such as the ongoing pandemic, climate change, education, homeless, etc. For the full state budget click here. Below are some notable highlights:
- Pause on Gas Tax Increase (budget proposes to forego the annual inflation adjustment to the per gallon fuel excise tax rate to occur on July 1, 2022.)
- This pause is expected to decrease fuel tax revenues by $523 million in 2022-23 based on an estimated 5.6-percent inflation rate.
- Safe & Sustainable Pest Management: Includes $882,000 Department of Pesticide Regulation Fund to investigate and enforce pesticide residue and use violations, as well as statutory changes to better achieve compliance with regulatory requirements and local implementation of statewide pesticide use enforcement priorities
- Drought Response: $750 million General Fund to address immediate drought response needs.
- Water Conservation Programs—$180 million for grants to large urban and small water suppliers to improve water efficiency, address leaks, reduce demand, provide water use efficiency-related mapping and training, support turf replacement, and maintain a drought vulnerability tool. These investments advance water conservation as Californians work to achieve the Governor’s 15-percent voluntary water conservation target and as local water districts adapt to forthcoming efficiency standards.
- Urban and Small Community Drought Relief—$145 million for local emergency drought assistance and grants to local water agencies facing loss of water supplies.
- Fish and Wildlife Protection—$75 million to mitigate immediate drought damage to fish and wildlife resources and build resilience of natural systems.
- Multibenefit Land Repurposing—$40 million to increase regional capacity to repurpose irrigated agricultural land to reduce reliance on groundwater while providing community health, economic well-being, water supply, habitat, renewable energy, and climate benefits.
- Groundwater Recharge—$30 million to provide grants to water districts to fund planning, engineering, water availability analyses, and construction for groundwater recharge projects.
- On-Farm Water Conservation—$20 million to bolster the State Water Efficiency and Enhancement Program, which provides grants to implement irrigation systems that save water on agricultural operations.
- Technical Assistance and Drought Relief for Small Farmers—$10 million to provide mobile irrigation labs, land use mapping and imagery, irrigation education, and direct assistance to small farmers and ranchers who have experienced water cost increases of more than 50 percent.
- Drought Contingency—$250 million as a drought contingency set aside to be allocated as part of the spring budget process, when additional water data will be available to inform additional drought needs.
- Clean Energy: $2B
- Long Duration Storage—$380 million General Fund over two years to invest in long duration storage projects throughout the state to support grid reliability. This investment will help with resilience in the face of emergencies, including wildfires, and provide a decarbonized complement to intermittent renewables, which will provide the state with additional energy storage options during periods of low renewable power availability.
- Green Hydrogen—$100 million General Fund in 2022-23 to advance the use and production of green hydrogen, in which electricity is used to split water into oxygen and hydrogen. Green hydrogen is critical to the decarbonization of California’s economy and achieving carbon neutrality.
- Industrial Decarbonization—$210 million General Fund over two years to accelerate industrial sector decarbonization. There are over 40,000 industrial facilities in California, employing over 1.2 million people. This funding will provide a grant program for the purchase and deployment of commercially available advanced technologies and equipment to decarbonize this sector while focusing on reducing criteria pollutants in disadvantaged communities.
- Food Production Investment—$85 million General Fund in 2022-23 to accelerate the adoption of energy technologies at California food production facilities. Grants will be provided to California food producers to install energy efficiency and renewable energy technologies that will reduce operating costs, as well as climate emissions.
- Offshore Wind Infrastructure—$45 million General Fund in 2022-23 to create the Offshore Wind Energy Deployment Facility Improvement Program, which will invest in activities to advance the capabilities of deploying offshore wind energy in federal waters off California in the areas of facility planning and development.
- Oroville Pump Storage—$240 million General Fund over two years to build a temperature management project to address temperature issues at the Oroville Dam that will allow a pump-storage project to operate at greater capacity for the benefit of the statewide electrical grid.
- Energy Modeling to Support California’s Energy Transition—$7 million General Fund in 2022-23 to support improvements to energy modeling activities, such as electricity system models to determine what types of electricity generation resources need to be built to meet state clean energy goals while maintaining reliability. Updating these models to reflect climate change impacts will improve state energy planning and policy development.
- Equitable Building Decarbonization—Older buildings with minimal insulation, air gaps, and non-existent or low-performing space heating and cooling are not equipped to adequately withstand extreme heat and protect occupants. Funding for this purpose will be prioritized for California’s most vulnerable residents. The Budget includes $962.4 million General Fund over two years for critical investments, including:
- $622.4 million General Fund over two years for a statewide low-income direct-install building retrofit program, including funding for replacement of fossil fuel appliances with electric appliances, energy-efficient lighting, and building insulation and sealing.
- $300 million General Fund over two years for consumer rebates for building upgrades, such as replacement of fossil fuel equipment with electric appliances.
- $40 million General Fund over two years to accelerate the adoption of ultra-low-global warming potential refrigerants.
