California Gov. Gavin Newsom (D) announced Tuesday, in the midst of heavy rain and flooding, that he would propose cutting funds to some of the state’s ambitious climate change programs due to a sudden budget deficit.
As Breitbart News reported in November, California discovered that it would face a budge deficit of roughly $25 billion — a year after a record surplus of $98 billion that was partly fueled by infusions of federal COVID relief.
The reason for the deficit: lavish spending on entitlements and Democratic Party pet projects, plus the innate volatility of California’s revenue model, which depends on taxing the highest earners, who had a rough year.
In a live press conference on his budget proposal, which he did not delay even though the state was suffering from deadly floods and “atmospheric rivers,” Newsom announced the grim news.
The Los Angeles Times reported:
Facing a projected $22.5-billion budget deficit in the upcoming fiscal year, Gov. Gavin Newsom on Tuesday announced plans to reduce investments in the state’s move to zero-emission vehicles and delay funding for 20,000 new child-care slots as California transitions from a time of economic surplus to shortage.
The governor’s administration blamed high inflation, the Federal Reserve raising interest rates and volatility in the stock market as the major forces causing state revenues to drop well below projections from last summer when he anticipated a$100-billion surplus in the current budget year.
His $297-billion budget plan for 2023-24 relies on delaying multiyear investments and shifting funding to bonds to offset the shortfall. Newsom said he was careful to preserve the state’s rainy day fund and budgetary reserves given the warnings about a nationwide recession and possibility that California’s financial problems could become more dire in the months and years ahead.
The Associated Press noted Newsom is still increasing funding in some areas, such as homelessness:
Even with revenue shrinking, Newsom is allocating more money to addressing homelessness. His proposal includes $3.4 billion for homelessness, with $400 million to clean up tent encampments and $1 billion for cities and counties to reduce the number of people living outdoors.
California has already set its sights on achieving carbon neutrality by 2045, meaning the state will remove as many carbon emissions from the atmosphere as it emits.
But Newsom has proposed reducing what the state plans to spend on climate over a five-year period by $6 billion. That would include $4.6 billion in cuts for the upcoming fiscal year, said Sergio Aguilar, assistant program budget manager at the California Department of Finance.
The cuts could hurt California’ effort to end sales of gas-powered cars by 2035 and diesel and gas trucks by 2040.
Already, environmentalists, who link the unusually rainy weather to climate change, are expressing alarm at Newsom’s proposed cuts, which they see as a betrayal of one of his core policies. As CalMatters notes:
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.
“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.
Newsom has used his climate change policies to build his national reputation as a progressive leader, as he builds toward what many expect will be a presidential campaign in 2024 or 2028. But fiscal reality has struck.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of the recent e-book, Neither Free nor Fair: The 2020 U.S. Presidential Election. His recent book, RED NOVEMBER, tells the story of the 2020 Democratic presidential primary from a conservative perspective. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.
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