$10 billion climate bonds to go before voters in November

California voters will decide in November whether they want the state to borrow $10 billion to pay for climate and environmental projects – including some that have been cut from the budget due to unprecedented deficits.

this 28 pages of bill A bill to put the Safe Drinking Water, Wildfire Prevention, Drought Preparedness and Clean Air Bond Act of 2024 on the ballot was approved by the Senate and Assembly late Wednesday.

This is the last day lawmakers must approve the climate bonds proposal in order to get the measure on the Nov. 5 ballot.

Senate President Pro Tempore Mike McGuire (D-Healdsburg) acted as governor on Wednesday because Gov. Gavin Newsom was in Washington. McGuire is a supporter of the proposed climate bonds and is expected to sign the bill on Wednesday night.

“Ensuring our communities have the resources to protect themselves from wildfires, droughts and floods is critical to the Golden State’s long-term success,” McGuire said in a news release Monday.

The bill’s wording was negotiated in secret over the past few months but was not made public until 9:57pm on Saturday.

California taxpayers will repay the bonds with interest. One legislative analyst estimated that a $10 billion bond would cost the state $650 million a year over the next 30 years, or more than $19 billion.

Scott Kaufman, legislative director for the Howard Jarvis Taxpayers Association, said the cost could be much higher if bond rates end up higher than the 5% rate analysts use.

“These bonds will be paid for decades later by people who did not even vote for its authorization,” Kaufman wrote in a letter opposing the measure to the bill’s authors.

Earlier this year, Sacramento lawmakers proposed placing tens of billions of dollars in bonds on the November ballot for measures ranging from stopping fentanyl overdoses to building affordable housing.

But those plans were scrapped in March as Newsom pushed for a $6.4 billion bond measure aimed at helping the homeless and mentally ill. 50.18% of the votes, Barely enough to win approval.

exist a recent survey According to a survey by the Public Policy Institute of California, 64% of likely voters said now is a “bad time” for the state to issue bonds to pay for state projects and programs.

Dozens of environmental groups, renewable energy companies, unions, water agencies and social justice advocates have been lobbying state lawmakers to put climate bonds on the ballot.

Lobbying intensifies after Newsom proposal $54 billion spent On climate efforts in 2022, but then cut that funding End the recent massive budget deficits.

Under the bill, $3.8 billion would be allocated to water projects, including those that provide safe drinking water, recycle wastewater, store groundwater and control flooding.

Another $1.5 billion will be spent on wildfire protection and $1.2 billion will be used to protect the coast from rising sea levels.

Other funds will be used to build parks, protect wildlife and habitats and respond to extreme heat events.

The language requires that at least 40 percent of funds be used for projects that benefit disadvantaged communities, defined as those whose median household income is less than 80 percent of the regional average income or less than 80 percent of the state median income.

Some lawmakers have withdrawn support for the bond, saying the provision was recently weakened to allow more money to flow to people who are not economically disadvantaged.

Jasmeet Bains, a Delano Democrat, said before the Assembly vote that the definition of vulnerable groups has been watered down. “It’s fundamentally unfair,” she said.

Hundreds of millions of dollars from the bond will benefit private companies. For example, it would provide $850 million to clean energy projects, including proposed offshore wind farms. These planned wind power projects are Already benefited Subsidies from President Biden’s inflation-cutting bill.

Governments often take out long-term debt to pay for infrastructure projects that are expensive to build but will last for decades. However, some of the planned climate bond spending will be on operational projects that may be long over by the time the bonds are paid off. For example, a portion will be used for “workforce development” or worker training.

Up to 7% of this amount, or $700 million, can be used for administrative expenses.

“We are already seeing the devastating effects of climate change – more extreme heat waves, catastrophic fires and floods, coastal erosion and severe droughts,” Sen. Ben Allen (D-Santa Monica) said in a press release Zhong said. “Every part of our state is impacted, and unless we act now, the costs of addressing these impacts will become increasingly significant.”