Sobered by the reality of a budget deficit, the governor has proposed cutting money for climate programs. It was surely a hard choice, but practical. Something has to go and there’s no better place to show spending discipline than by holding back funds dedicated to a political fantasy.
After years of producing surpluses, including a record $97 billion overcharge to taxpayers last year, California’s volatile income tax system has spit out a deficit. By relying on a progressive tax regime that’s overly dependent on capital gains taxes, revenues in California are whipsawed by boom-and-bust cycles, requiring lawmakers to make uncomfortable decisions.
California Gov. Gavin Newsom’s administration projects a $22.5-billion deficit for 2023-24 and proposes roughly $297 billion in total spending. It was entirely expected. The fiscal outlook published in November by the Legislative Analyst’s Office predicted “the Legislature would face a budget problem” – a deficit – “of $24 billion in 2023-24,” with more to follow.
The governor’s response, however, was not expected. Who would have thought he’d cut the state’s cherished climate programs, including “investments” in zero-emissions vehicles, by $6 billion?
After all, Newsom and political heavyweights across the state have made it clear that the greatest threat to California isn’t crime, the housing shortage, the steep cost of living, punitive energy prices, homelessness, or the loss of businesses and residents, but the effects of greenhouse gas emissions. The governor, who only a few months ago signed a package of climate bills, has called climate change “an existential threat.”
More recently, Assembly Speaker Anthony Rendon assured Californians that lawmakers “are committed not only to slowing climate change” but even “bringing it to a halt.”
Newsom believes climate funding “is an example of the state’s willingness to do the hard work that other states and nations simply talk about.” But confronted with a $22.5 billion deficit, now the governor has to talk about why it’s more important to reduce that climate funding than to, as Al Gore used to say, “fight global warming.”
Newsom is not suggesting a sharp cut in climate spending, just an 11% decrease in his $54 billion, five-year climate package. Nor is it the only program where he’s proposing reductions. He recommends trimming spending elsewhere. Some of the governor’s proposed cuts are “trigger cuts” that would not occur if state tax revenue sufficiently materializes.
Newsom could have insisted that the state dip into its various reserve funds totaling $36 billion to spare the climate programs. He didn’t. Instead, he said he’s taking “a wait-and-see approach” with the reserves, holding back for “more clarity” when the budget is revised in May.
While the deficit is yet another reminder that California needs to reform its broken tax system so that it will no longer be, as former Gov. Jerry Brown once called it, “one of the most unreliable” tax structures in the country, the cuts put forward by Newsom seem to strongly indicate that the alarming talk about a coming “climate crisis” is just a lot of gas. Maybe the cuts will be offset by federal funds, as Newsom hopes. But if our very existence were threatened, it would be irresponsible for policymakers to pare down spending that would save us.
Surely there are less-important programs that could have taken bigger cuts in sacrifice to the climate agenda. But Newsom doesn’t want to touch programs such as 4-year-old kindergarten, which the evidence, as PRI’s Lance Izumi notes, shows “will not improve student achievement and will negatively impact the children that Newsom claims to want to help.” Nor does he propose cutting increased health care spending for undocumented immigrants.
There seems to be no effort to root out wasteful spending elsewhere or evaluate programs or increase spending oversight so that dollars can keep flowing to climate initiatives that will effectively lower emissions or boost innovation. If faced with tough choices, many powerful lawmakers will favor their pet programs that have been in place for decades over more recent climate projects.
There’s no escaping this fact: Newsom’s proposal is the tacit admission that, despite all the rhetoric, all the fearful warnings, all the anxiety-ridden alarms, lawmakers don’t truly believe climate change is going to wipe us out. It’s just a handy, feel-good political wave for them to ride to more power over the rest of us.
Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.