Governor’s May Budget Revision Shifts Funding Away from Key Climate Priorities and Doubles Down on Harmful Water Projects
Source: Sierra Club California
Contact: Michael Blenner, michael.blenner@sierraclub.org
Governor’s May Budget Revision Shifts Funding Away from Key Climate Priorities and Doubles Down on Harmful Water Projects
Sacramento, CA - Sacramento, CA - Today, Governor Gavin Newsom released the 2025-2026 May Revision to his state budget proposal. The May Revision includes a commitment to invest $3.7 million in the Public Utilities Commission Utilities Reimbursement Account, which will strengthen safety standards in large-scale battery storage. Unfortunately, the proposal shifts $1.5B away from the Greenhouse Gas Reduction Fund (GGRF) to backfill CAL FIRE programs. It also continues Newsom’s attempts to bypass CEQA and other regulations to push environmentally destructive water infrastructure like the Delta Conveyance Project (Delta Tunnel).
The over $1.5B that the May Revise proposes to shift away from the GGRF will significantly reduce funding that should be made available for key climate initiatives. GGRF funding - through programs like Equitable Building Decarbonization - should primarily benefit underserved communities, especially frontline neighborhoods with the highest exposure to pollution and the impacts of climate change. Newsom claims he is reauthorizing Cap-and-Trade to pay for some of these deprioritized GGRF programs, however that move fundamentally undermines the “Polluters Pay” principle that frontline communities have advocated for. If polluters can simply buy their way out of being held responsible for polluting frontline communities, they will not be incentivized to change their dirty business practices.
Finally, Newsom signaled that he will continue to attempt to bypass CEQA and other bedrock environmental regulations to advance environmentally destructive water infrastructure projects like the Delta Tunnel . Earlier this year, Newsom suspended CEQA and the California Coastal Act, and he is now indicating he will further circumvent crucial public processes in order to ram through the Delta Tunnel. Newsom claims that the Delta Tunnel will “upgrade” the state’s water security, but it will not be built until potentially 2055. He is committing the state to a $20-40 billion investment that does not address concerns from Tribes, local residents and scientific experts. Sierra Club California and its allies have consistently opposed the Delta Tunnel and highlighted its potential negative impacts on Tribal groups, local communities, and endangered ecosystems. With potentially $16 billion lost to tariffs, ratepayers simply cannot afford the Delta Tunnel. Instead, California should prioritize local, sustainable projects, preferred by California voters.
Statement from Miguel Miguel, Sierra Club California Director:
“Every May Revise, the Governor has to make difficult decisions about the financial future of the state. However, more often than not, Newsom seems to put the priorities of frontline communities on the back burner. This year’s Revise unfortunately shows that Newsom is still not treating the climate crisis with the level of urgency it demands.
“The proposed funding shifts will significantly deprioritize programs - like Equitable Building Decarbonization - that help the most underserved Californians. Newsom’s commitment to bypassing CEQA and other public review processes to push through the Delta Tunnel will be seen as a major stain on his reputation as an environmental leader.
“Looking towards next year’s gubernatorial elections, any candidate for Governor who wants the support of environmentalists will need to make it clear that they’re truly addressing the needs of frontline communities. Sierra Club California will be working closely with our allies to ensure these concerns are reflected in the final state budget, and commitments to vital environmental justice funding are preserved.”
