Assembly Budget Subcommittee No. 4 on Climate Crisis, Resources, Energy, and Transportation

Hey, good morning. We have a cast of thousands up here on the Subcommitee to anxiously hear what you have to say. But this is the first meeting budget sub four and appreciate everybody's interest. And I particularly appreciate that we have the four secretaries here to give us an overview, and that's what we will start with. And then we'll hear from the Water Board, the Department of Water Resources, and their budget proposals.

We have five items that are planned for discussions. For each of the items, I'll ask each witness in the agenda to introduce themselves before they begin their testimony. So if you'll help us with that. At the end of the presentation items, members of the subcommittee, all thousands of us, may ask questions or make comments on any of the seven nonpresentation items during this first hearing. We'll not be taking any votes on any items, and after all the items are heard, we will take public comment.

For members of the public who wish to provide public comment, please limit your testimony to comments regarding the Water Board for the Department of Water Resources. If you have comments on budget issues not related to these departments, please refer to the daily file for which subcommittee hearing the pertinent department will be before you. Each member of the public will have 1 minute to speak. There will be no remote testimony at this committee. And would you please take the role?

[Roll Call]

All right, we have our panel. And do you guys have a preference? Yes. All right, good. All right. Secretary Garcia Gonzalez. All right.

Good morning.

I didn't know whether you're going to be more comfortable rotating up or Saul sitting here, but.

Safety in numbers

Yeah. You guys have us outnumbered in every way. All right.

Leave any one of us sitting up here alone.

All right. For the benefit of the audience, this is Secretary Garcia Gonzalez, California Environmental Protection Agency. Welcome.

Thank you. Thanks very much. I appreciate the opportunity to be here this morning and joined by my colleagues here to get us started. And I know that we're looking forward to hearing a lot more detail on water and some of the specific issues that you might want to address in that space.

But thank you for giving me the opportunity to first introduce myself, Yana Garcia, as you mentioned, secretary for environmental protection at the California Environmental Protection Agency, and share with you some of the progress we've been making as well as some of my priorities. So our departments are at the forefront of environmental science and use the most recent research to shape the state's nation-leading environmental laws in collaboration with communities, our administration, and our legislative partners.

Our work has become ever more urgent as the climate continues to change. As I think you are all aware and your audience is aware, last year was the planet's hottest year on record, and California ranked among the nation's top five states impacted by climate change. According to the world's leading climate scientists, we need to reduce global emissions by half by the end of this decade, and I'm proud of the Environmental Protection Agency and our administration in rising to that challenge.

In 2023, we pushed to meet our world leading climate goals and enact aggressive legislation, slashing pollution in overburdened communities, building out significant amounts of new battery storage to support grid reliability in California's clean energy goals, achieving milestones in zero-emission vehicle, car, and truck sales years ahead of schedule, and advancing the nation's first climate core, as well as inspiring other states to do the same. We've also deployed new technology to detect and control methane emissions and so much more.

Now, this year's budget situation is challenging, but the Governor's proposed budget reflects our continued commitment to achieving our climate goals and to promoting environmental protection across the state. The Governor's budget specifically protects 89%, or 48.3 billion, of our original $54 billion climate budget. This remains a historical level of investment that continues to prioritize equity and investments in underserved communities who face disproportionate harm from pollution and climate change.

Now, the Environmental Protection Agency, along with our sister agencies, have already gotten 36 billion of these investments out the door and into our communities to make real change on the ground. Now I'd like to take a few minutes, as I mentioned, to highlight some of the great progress in funding and other state resources that we are supporting, and to touch on a few key proposals before you for consideration in this year's budget.

Now, I want to start by highlighting one of my highest priorities this year, which is protecting our environment and our health through sustainable pest management and I'm honored to be joined in this with my colleague Karen Ross and securing funding for the Department of Pesticide Regulation, more specifically, to do this critical work. Pest management, as we all know, is integral to the stability of California's healthy food supply. It supports growers and agricultural sustainability and protects the health of our urban and rural communities and our environment.

Last year, the Department of Pesticide Regulation and the Environmental Protection Agency, in partnership with the Department of Food and Agriculture, based on extensive stakeholder engagement, released a roadmap to accelerate a systemwide transition to safer, sustainable pest management. By 2050, that roadmap's goals are for California to replace high-priority risk pesticides and adopt sustainable pest management as the de facto pest management system across our state. The budget includes $33.3 million, phased in over three years to support the department's essential function is in this work, including work to increase the availability of sustainable pest management tools and practices

This includes funding to streamline pesticide evaluation and registration timelines to bring safer, effective pesticides to market faster and to grant support for innovative research to provide viable alternatives for high-risk pest management products and support expanded adoption of those alternatives.

This proposal will provide stable funding from the mill assessment to better support the department's statutory and programmatic responsibilities to help maintain our healthy food supply, to support growers, and protect the health of our urban and rural communities alike. Now, the Office of Environmental Health Hazards Assessment and the Department of Toxic Substances Control are also doing critical work to support all Californians, especially those who are most vulnerable.

I'm proud of the Office of Environmental Health Hazards Assessment's continued work to specifically engage with and learn from tribes through partnerships, including those that informed the fourth edition of OEHHA's Indicators of Climate Change report. Building on this report, last month, OEHHA held a symposium, which I think many of your staff may have joined, that convened diverse perspectives, including those from tribes, to promote equitable, sustainable solutions to meet the climate crisis.

The Department of Toxic Substances Control also recently released the state's first hazardous waste management report to establish a baseline of understanding for how hazardous waste is managed in California to guide planning for the future. As I'm sure you are all aware, this is a challenging area for our state and a challenging area that we have prioritized at the California Environmental Protection Agency. Speaking of the circular economy, I'd also like to highlight the significant work being done at Cal Recycle.

Cal Recycle has made significant progress on implementation of SB 1383 to reduce methane emissions. Since '21, California has committed $487,000,000 to organics recycling and surplus food recovery grants and loans. 75% of jurisdictions are now reporting residential organics collection, which is significant progress. And 100% of jurisdictions are reporting expanded unsold food recovery programs, a critical step forward as one in five Californians do not have enough to eat.

As we look into the future, Cal Recycle is also full steam ahead in implementing SB 54, our landmark plastics pollution reduction law, reducing single-use plastic packaging in the state and increasing the recyclability of and recycling rates for packaging and foodware. This budget importantly continues investment in this work, allowing us to move forward with the development of a zero waste plan for the state.

Now, in addition to building out this circular economy that we need, we are also working to support the transition to a carbon-neutral economy, and CARB, as always, remains full force in this effort. The Air Resources Board, in collaboration with our state partners, is moving swiftly to meet and surpass California's ambitious climate goals.

We've achieved, as I mentioned, our goal of 1.5 zero-emission vehicles sold in the state in 2023, 2 years ahead of schedule, and surpassed our goal of 6% zero-emission truck sales in '22, also two years ahead of schedule. Just last week, the Governor also announced that California has surpassed 100,000 public and shared private EV chargers installed statewide. This is on top of the more than 500,000 at-home chargers that Californians have now installed for personal use.

The budget continues our commitment in these investments, maintaining most of the $10 billion committed to the state's zero-emission vehicle agenda over the past couple of years. This funding will support a wide range of programs, including over $1.8 billion to support school districts in their transition towards zero-emission buses, $656,000,000 in clean cars for all and other equity-focused projects and 945,000,000 for drayage and other infrastructure for heavy-duty, as well as 339,000,000 for community-based plans, projects, and to support sustainable community strategies.

In addition to our zero-emission vehicle commitments, the budget protects $610,000,000 for the Community Air Protection program and includes an additional $250,000,000 in budget year 24-25 for this purpose. Now, these programs, importantly, as you know, focus on improving public health in disadvantaged and low-income communities, a critical priority of mine and of the Governors in building a California for all. Last but certainly not least, as I know you're most interested in hearing, I'll touch a bit on water.

The '21 and '22 budget acts committed $8.7 billion over multiple years to support resilience and response programs addressing drought and flooding, which are being exacerbated by climate change. The budget maintains $7.3 billion, or 84% of these investments.

This encompasses critical investments at the State Water Board to secure California's water supply in preparation for a hotter, drier future, including funding for infrastructure to make our water supplies more resilient, temporary groundwater recharge permitting and compliance to take advantage of wet weather events as we've been able to do over the past two years, drinking water emergency funding to address critically impacted communities, water rights modernization and enforcement, another key priority of ours to allow us to move more precisely to manage the water that we have. And we've already seen firsthand how these investments are paying off, allowing us to better prepare for and take advantage of wet years.

Amid unprecedented rainfall last winter, the State Water Board authorized the diversion of 1.2 million acre-feet of water for groundwater recharge. Projects funded during fiscal year '22-'23 alone will add approximately 165,000 acre-feet per year to the state's water supplies, which is enough to sustain almost 500,000 households annually. Approximately 161,000 acre-feet of that 165,000 will be generated through groundwater recharge. And at the same time, we're working to secure our water supply, the State Water Board is also making critical progress in advancing the human right to water.

Since 2019, the Water Board has used a variety of tools to improve access to safe drinking water for the more than 2 million Californians in need. In the past fiscal year alone, the Water Board has distributed $239,000,000 to improve access to safe drinking water in disadvantaged communities. And since 2019, it's provided $785,000,000 in grants to do just that. I really want to emphasize here the Water Board's crucial role as an engine for state investment in water infrastructure as well.

In just the past two fiscal years, the board has provided an incredible $4.5 billion for both water resilience and drinking water projects. As we know, this investment now is key to preparing the state to manage climate change impacts in the several years to come. I want to highlight, as well as I end a critical budget request from the Water Board that relates to the topic of foreseeable impacts into the future, and that is for wetlands protection.

Unfortunately, as I think you all are aware, last year's historic decision by the Supreme Court limited federal authorities under the Clean Water Act, leaving many wetlands no longer protected at the federal level. Luckily, wetlands in California are somewhat more protected than those at the federal level. The wetlands make up nearly 4 million acres that are vital ecosystems for habitat, climate, resiliency, and water quality. Leaving them in any way unprotected could have grave consequences for our environment.

California is preparing to step up to protect these waters using independent state law and has designated $6.1 million in the budget to protect state wetlands, including funds for water quality permitting and enforcement work that has historically been conducted by our federal counterparts. We are looking forward to ongoing conversations with you and your colleagues on this and other budget proposals in the coming months, specifically those that pertain to water, but also those in climate.

I do want to note that I think we have a healthy level of consistency in terms of our approach with the LAO's report. I look forward to your ongoing collaboration. And to answer any questions that you have, I'm joined by not only my colleagues across the Administration, but also some of our technical staff from the Water Board and from the Air Resources Board. So look forward to talking to you more.

And with that, I will introduce and kick it over to my partner in tackling many of these issues, secretary of the California Natural Resources Agency, Wade Crofoot.

Before you kick it over, I know traditionally we would hear from everybody, but when you have six of you, I think it's better for me. I just want to make a couple of quick comments. I have other questions that will come after that, but I think it's something we should all be proud of. The statement, you said California, one of the nation's leading environmental states out there. That's something that I know many of us take pride in.

But it's even more challenging as you try to cut the budget to be able to hold on to that and make sure that the programs that we have. So one of the things I just like to emphasize, not just for EPA, but for all of us, is just the effectiveness of our programs. We have to really make sure we're getting as much of a bang for our buck as we possibly can. I want to compliment you for the pest management.

That's sort of a small sliver out there, but it could have long term real potential benefits for us environmentally. I had the pleasure of spending some time with some of the people that worked on that plan, and they are certainly an enthusiastic and energetic group. I do have questions about the effectiveness of our methane capture, and that'll be for both you and Secretary Ross. Just overall, I hear reports that our methane capture is not as effective as some people believe.

So I'd love to have us have more better understanding about that. And recycling is, my impression is it's patched together and it doesn't have a strong infrastructure because it's patched together. It's nobody's fault. But it's just kind of evolved with this bill and then that bill and then that. And it doesn't feel like the healthiest way for us to handle the major question of recycling.

And when I travel to other countries, it just feels like they have it together better on recycling than our patchwork kind of, kind of approach. So wanted to leave you with those quick things and turn it over now to you, Secretary Kirkland.

If I could just say very briefly on the last point and on methane capture. Happy to follow up with you on emission reductions more specifically, and I think maybe even our colleagues from CARP can do that.

I don't just mean emissions reductions, but the actual effectiveness. How much is escaping relative to what we thought was going to be escaping is probably the big question.

Happy to follow up with you more there. And I appreciate the comments on recycling. I think this has been a challenge that we've frankly been struggling with for several decades and an emerging area of law and regulatory implementation. I think there's a lot of promise in implementing extended producer responsibility regulations now which take a very different approach than what we've seen in the past. And I very much look forward to sharing more progress with you as we do that.

And wanted to flag as well, we have a zero waste plan that will be upcoming from Cal Recycle, which really examines the types of investments we need to see in local businesses and regional economies to make a truly circular use economy possible for the State of California. And thank you.

Thank you, Secretary Crowfoot.

Well, thank you, Chair, for your ongoing stewardship of our agency budgets, for carrying the torch once again into this budget process. And big thanks to your team for all the work they do. The oversight is important, and it feels like a partnership that we're all moving in the same direction.

I also want to take an opportunity to thank the women and men behind me, many of which who work at our departments, who are putting together these budgets and will answer more questions here today, and then the various stakeholders who you'll also hear from. I, too, am proud that California is a leader across the world on all things environmental. And that's, of course, as a result of state leadership, our Legislature, our Governor, but also the groups and leaders across California urging us to do even more.

This is a good opportunity to take stock of where we stand on all of these critical priorities across our agencies. And make no mistake, this is a challenging budget. And there were difficult decisions that were made for the Governor's January 10 proposal, and there will remain difficult decisions that you all make as you oversee and adjust that budget.

But I think it's really important to recognize the progress that we've made collectively. Over the last few years, almost $50 billion of funding going to attack climate change across California. This has gained notice across the world, and this budget is actually larger than most other countries to combat climate change and protect people and nature from climate.

So I'll talk about the state of our budget and the state of the budget proposal, and I'll also mark our progress, which is as much your success across the Legislature leading these budgets and this policy as it is the Governor's. I'll start with forest and wildfire. We know that this is a near-existential crisis across the American West. We have experienced catastrophic wildfire almost over 7% of our state lands over the last five years.

We know that this is a combination of climate change and decades of underinvestment in landscape management. The good news is that our recent budgets have committed almost $3.0 billion, $2.8 billion to upfront proactive actions to improve landscape health and get in front of these catastrophic wildfire risks. That $2.8 billion is in addition to almost doubling Cal Fire's budget for response once these fires start. This proposed budget maintains 95% of that 2.8.

So $2.7 billion of investments over the next five years, including that continued 200 million of greenhouse gas reduction funds. The progress that this funding has enabled is almost mind-bending. We have over 1000 resilience projects at work across the state. Whether they're fuel breaks around communities, large landscape-level projects, tribal partnerships to introduce cultural or prescribed fire, these projects are working. We have experienced moderate wildfire over the last couple of years and no doubt some of that is to thank Mother Nature for, which we don't control.

But we know the investments in Cal Fire's response budget and these upfront investments in wildfire resilience are paying off. So this budget continues that investment and actually also makes further investments in infrastructure at Cal Fire to improve the fire protection capacity, improvements to fire stations, training facilities, air attack bases. So let's talk about progress. We have a new statewide tracker of projects to really get our arms around how much progress we're making.

And that took a lot because we have almost 20 agencies across the state and Federal Government that do this work. But what this shows is that we achieved almost 380,000 acres of treatments in 2022 and we're going to receive this spring an update on 2023. Cal Fire has completed more than 250,000 defensible space inspections and prescribed fire, which is low-level controlled fire, which is probably the most effective proactive actions we can take to reduce catastrophic wildfire, has increased exponentially.

We completed at least 126,000 acres of prescribed fire in 2023 and we're going to more than double that in the next couple of few years. I'm really proud that Cal Fire for the first time awarded $19 million of funding to tribal governments for tribally led wildfire resilience. We think this is a critical step forward in supporting tribal leadership to take care of our environment, which of course, tribal communities have for thousands of years. So we see the progress being made.

We know we need to maintain progress and we believe this budget does that. Next, I'll talk about water. And that's, of course, responsibility that we share with Cal EPA and Secretary Garcia's team. We know the challenge. Last winter, we went into last winter with 6 million Californians underwater rationing, and we were preparing for 20 million Californians to be underwater rationing, half of the state.

Just a couple of months later, we experienced what could be the wettest three-week period in the state's history with those nine atmospheric rivers in January. So this weather whiplash is more intense than ever and getting more intense. Now as Secretary Garcia said, the Legislature, the Governor came together to allocate $8.7 billion of funding over the last few years. That's more than our 2014 water bond across the state. And this proposed budget proposes to maintain 84%, or $7.3 billion of funding.

Importantly, our proposed budget proposes almost $100 million, $93.9 million in new funding to support flood safety projects. I'm really proud of the Legislature, the Governor, for continuing to invest in flood protection even amidst the drought that marked those years from 2019 to 2022. If you add up the flood investments since 2019, $1.6 billion of flood protection investments that have paid off last winter and this winter.

So what does progress look like implementing the governor's strategy for a water supply strategy for a hotter, drier future and this water resilience portfolio. Last winter, thanks to the Water Board and our colleagues at DWR and our local water agencies, 3.8 million acre-feet of water was recharged, diverting flood flows underground. That's more water than our largest state-managed reservoir at Lake Oroville. So we are understanding we have to seize these wet years and get water underground. We know that groundwater supplies 60% of our water supplies during these droughts.

So we need to plus up that savings account for the drought periods to come. Chair I know you're passionate about implementation of groundwater management and sustainable groundwater management. And thanks to our Department of Water Resources, $340,000,000 of investment to local groundwater management agencies, local communities, to bring their groundwater basins under sustainable use. We're now at the 10-year anniversary of Sigma, that passed in 2014, and progress is being made with more work ahead.

I'm particularly proud of the collective work to advance the largest river restoration project in American history. Tribally led effort over a couple of decades to take out four suboptimal dams in the Klamath River Basin, restore over 400 miles of Salmon Habitat and let that river run again. That's happening thanks to your investments. Our investments. And then lastly, the investments that you have enabled over the last couple of years have allowed us to apply the world's best technology and storm forecasting and modeling.

We have a state climatologist at DWR that sits in our Office of Emergency Services and actually helps identify to where to pre position equipment and people using state-of-the-art federal and state science. So there is just tremendous work happening. I want to draw your attention to one critical priority for us, and that is continued improvement to address the crisis at the Salton Sea.

Now, there are those areas or topics in the state that sometimes they're not statewide, but they require our responsibility and steadfastness, and that is the Salton Sea. We know that the Salton Sea is shrinking in the Imperial and Riverside counties. We know that's a result of reduced water usage in those areas and more conservation, which is a good thing.

But we can't leave as the byproduct of water conservation in the Colorado River Basin in that part of California, this shrinking lake that not only impacts habitat and that Pacific flyway that depends on that for their annual migrations, but more importantly, the communities around there that have really challenging air quality for a number of reasons in which this shrinking salton sea exacerbates. So I'm proud of our progress. Your investments in recent years to get work done at the Salton Sea.

Our agency administers a Salton Sea management program to do just that. We're under order from our State Water Board to restore almost 30,000 acres of exposed plio, or lake bed there. And we're making progress. For the first time, we actually have significant federal commitment and investment into that Salton Sea restoration. We signed an agreement last year ultimately delivering $250,000,000 of federal investment to these projects if we maintain progress. So this budget has $65 million of funding to continue that critical work.

And simply put, we cannot stop the progress at the Salton Sea. There's been decades of unfulfilled promises to communities there. This can't be a sacrifice zone, and we're not going to let it. So this funding is critically important. I want to next step to coastal resilience. Of course, another big challenge, sea level rise.

For those who think that this is a challenge decades away, I think Secretary Omashakin would be able to point out that our critical transportation train corridor between Los Angeles and San Diego is impacted because of sea level rise and coastal erosion. So critically important. The 21-22 budget committed $1.3 billion of funding to this priority. This proposed budget maintained $660,000,000 of investment. Progress is being made. $370,000,000 already put to work. $230,000,000 for projects.

Those are projects like wetland restoration, making public infrastructure resilient to sea level rise. We're also really excited to launch a $70 million program to support local coastal communities, many of which you and Assemblymember Connolly represent, to prepare and to plan for sea level rise. Critically important that local governments have those resources. And thanks to your investments and this program, for the first time they will. And then significant $50 million in research monitoring restoration, specifically focused on the biodiversity of our coast, which is world-class.

And then more than $20 million of this coastal budget invested into supporting tribal partnerships. Extreme heat, which is, we talk about five major climate threats to California, drought, flood, wildfire, sea level rise, and extreme heat, the fifth. And so this budget maintains $364,000,000 to combat extreme heat.

That's a responsibility shared across several agencies, some of which aren't here today, like our health and human services, our public health, which is doing a lot of work in the most vulnerable communities, as well as our Office of Emergency Services on noticing these heat waves. But I'm proud of our progress within the agency including $121,000,000 to green 180 schoolyards in the most vulnerable communities to heat. Because we know kids and seniors most vulnerable to heat.

Kids are spending all day at school, sometimes in these concrete-laden playgrounds. We're working to change that. $121,000,000 to schoolyards. $30 million soon to be awarded to daycare facilities to get shade at daycare facilities and green those surfaces. Nature-based solutions. I know you're very passionate about that, but Assembly is passionate about that. Basically, projects that help us combat climate change buffer climate impacts while improving the environment.

This is probably, for me, this is one of the most exciting trends across the world, is recognizing the role nature plays in combating climate change. Conserving forested watersheds that are the headwaters of our water systems, restoring wetlands to buffer flood impacts, and store carbon parks and open space in communities to get the stormwater underground and improve lives. Over the last couple of years, you, Governor, have committed $1.6 billion of funding to nature-based solutions. 1.4 million of these investments remain proposed in our budget.

86% of that initial investment, including very importantly, 100 $1.0 million program called our tribal nature-based solutions program to transfer funding to tribal governments and communities to get this work done again. Listening and learning from tribes that have been practicing environmental management since time immemorial is one of the most important things we need to do. And we're making progress.

Last year we announced over 1000 sq mi of additional conserved lands in the first year of working towards our 30 by 30 target law to conserve 30% of California's water of lands and coastal waters by 2030. 631 thousand acres. $36 million to fund projects in the Delta to rewet the Delta where it's appropriate. Critically important for not only habitat, but for carbon emissions given the oxidation and the subsidence in the Delta.

Tribal youth nature-based solutions Conservation Corps $10 million, $11 million transferred to tribes for over 12,000 acres of ancestral land return. And then we're excited this year to cut the ribbon on our newest state park at Dos Rios in Stanislaus County at the confluence of the Tuolumne and San Joaquin rivers. It's going to be important climate resilient work and floodplain, but also provide a critical state park where it's getting hotter and where communities need climate refuge. So very, very excited about that. Last point I'll make.

I talk most of my time here about protecting Californians and our nature from the threat of climate change. Let me talk about energy. Energy is shared over many of our agencies. We're proud to support the California Energy Commission within our agency. So I need to know just how proud we are of the collective progress we've made transitioning our energy system to an entirely clean, reliable, affordable, and safe energy system. A couple of years ago, state leaders allocated almost $8 billion of energy investment.

We're proposing 6.6 billion of that, 83% of that maintained in this budget, including $1.0 billion for clean energy reliability investment plan. So to make this transition in a way that's reliable for our consumers. Incredible progress being made, last year, 59% of the electrons that powered the fifth largest economy in the world in California were clean electrons, didn't involve fossil fuel. And we're making more progress. In just the last four years alone, 13,000 megawatts of energy added to our system.

For some context, that's about 20% of our overall energy generation. Clean energy generation added in the last four years. And then paired with that and critical to moving off our fossil fuel generation is energy storage. California has emerged as a world leader, expanding energy storage and reducing the cost of that storage. That allows us to balance intermittent solar and wind into our system. 1000% increase from statewide storage levels only four years ago. So we're really proud of our progress.

As you can tell, we're focused as we navigate this tough budget on federal investments. And I want to point out that California to date has secured $15.5 billion of federal investments into the priorities that we're talking about here today. We're going to continue that focus. A lot of our time as secretaries is spent in Washington, DC.

I was just there last week making the case to bring in federal funding to supplant these cuts. So proud to do this work. So proud to learn and partner with others in the Administration, including our agriculture secretary, Karen Ross, who I'd be glad to turn it over to Chair if you don't have questions. Okay.

It mild on the questions, just a few comments. Yeah, it just feels more appropriate to do this right after you have comments. Number one, I want to emphasize that the Assembly, with 80 of us trying to identify what are our goals and priorities and climate, et cetera. Certainly wildfire, fire, drought are two of what I would say the top three, and the third is grid resilience out there. And so your department certainly has a huge focus on a lot of that.

I think the CEC is probably going to be one of the most important departments in California for the next 15 or 20 years as we make this transition. Huge responsibility for us to be able to try to get this right. Climate change, everybody keeps talking about, the risk is going up. We're going to have, the floods are going to be worse, the droughts are going to be worse, the wildfires are going to be worse.

And I was just at the Emergency Response Committee hearing yesterday, and it's like, well, where are we going to come up with the money to try to address all the disasters? And I think that's just with the limited resources that anybody has and the increasing risk that's out there, the investment has to be the other side. It's the prevention. So as you talked about, the prevention. But we have to find those creative solutions that decrease the impacts of this growing variability that we have out there.

The salt and sea, if we're going to be down there mining the lithium, we have to make sure that we're also great community partners with everybody. So I think it's really wise for us to have that. And extreme heat is just sort of kind of on the radar screen, but not on the radar screen.

I think all of us don't know exactly what to do with that, but it's really important because it is the most disadvantaged that they're going to be suffering and we've seen in some other places when they're not paying attention. So appreciate all of those things. And I don't have a specific question. One final comment is that our dollar investments are significant, and as you said, more than some other countries, et cetera.

It's still a question in my mind whether our policies match the quality of our, with the amount of money we're putting in. If we have the right policy effectiveness, we really could be getting a lot of bang for the buck. And that's the challenge for us, is to continue to get there. Secretary Ross.

Okay, thank you.

And if you guys would like to.

Switch seats so we can. That's a great eye contact.

I think that might. Which is part of what I had in mind when I suggested that. But, yeah.

All right. Good morning. Well, I'm inspired by my two predecessors that just spoke. It's a hard act to follow, but I'll do my best. I'm Karen Ross, and I'm secretary of the California Department of Food and Agriculture. Our department was established in 1919. I'm not that old, but I'm pretty old. We were created specifically to do several things for one of our earliest economies, which was agricultural.

And it was about ensuring the quality and the safety of the agricultural products that we put before the public in all of the streams of commerce. It was about protecting the state. Even at that time, we recognized the impact of invasive species, both for plants and for animals.

And that's a core function of the Department of Food and Agriculture, to protect our natural and agricultural resources from those invasive species and to promote and ensure there's access to the quality products that we do grow, both domestically as well as in international markets. I will say in the last decade, we have also really branched out in the core work that we do as part of the solutions to climate and being in a position to really help make the connections in local communities for access.

For those people who have not historically had access to the food and the healthy food that we grow in the State of California, we're very blessed that we have had the climate, the Mediterranean climate that we have. It allows us in California to do what few other places on earth can do, and that is to plant and to harvest crops almost every day of the year.

In some part of the state, that's allowed us to grow 400 different commodities, a third of the nation's vegetables, two thirds of our tree nuts and our fruits, and still be the producer of 20% of the milk. So I will be talking about methane in a minute or two. In the last couple of years, actually, a decade ago, we established the Office of Environmental Farming and Stewardship Innovation. That was about recognizing how much agriculture is already impacted by climate change.

In many ways, we're at the tip of the spear. When I think about heat days, when I think about warmer nighttime temperatures, what that means for pest infestations, the spread of disease, drought, and then flood. And so we established that office and have been able to establish climate smart agricultural programs with the investment that the legislature and the Governor have been able to make. We also, through legislation, established the Office of Farm to Fork, which is really about.

We have the ag and the food in our name, being able to connect to nutrition programs and really do some matchmaking at the local communities. And I'll talk about some of the recent investments that we've been able to make in those nutrition programs. I want to start with the investment that has been made to date. Over the last three years. In particular, almost $1.0 billion has been invested in climate smart agricultural programs and nutrition programs. And I will highlight just a few.

But I do want to say that over 3000 projects have been funded, covering 300,000 acres and a total of 26.5 million metric ton CO2 equivalent reductions in greenhouse gas emissions. Agriculture is very much a part of our strategy for natural working lands. Our ability to draw down carbon and store it in our soils is a very important solution, along with our nature based solutions as well. The reduction in greenhouse gas emissions is the equivalent of taking 5.9 million cars off of our highways.

And I think that's pretty remarkable. We're growing all that great food and we're being able to do. Yes, you had breakfast today, right? So let me just run through several of our programs. One that has become one of my favorites is our healthy soils program. Until the USDA had new funding streams thanks to federal legislation that's made incredible investments in these things, we had one of the largest healthy soils programs in the country.

We have just in the last three years, $155,000,000 in our healthy soils program. They're tremendously oversubscribed. But one of the comments I want to make about how we think about these programs, these are all funded with one time dollars. We have been very deliberate around several things. One is investing in technical capacity and technical assistance.

We want to make sure that every farmer can have access to the information and the language that suits them so that no one is left behind in being able to make these transitions to carbon neutrality. Over $38 million has gone to funding community based organizations, resource conservation districts and UC cooperative extension agents to make sure we're building out a knowledge infrastructure to make sure the practices will continue, even if grant dollars may not always be available at the same level. Bless you.

I'm having the same allergy problem today and my voice is really showing it. So the adoption of new techniques has also been a result of early on, before there was quite the momentum that we've created, we were funding demonstration projects as one way of showing farmers benefit of making these transitions, because there's always a risk of thinking about changing my practices and what that's going to mean.

We have our on farm water use efficiency program that's been funded in the last three years at $120,000,000, it's been crucial. That was one of our first climate Smart Ag programs. It was begun in the 2014 drought. We've made incredible advances in water conservation with on farm water use efficiency. It not only is reducing water use, it's reducing energy use, which reduces greenhouse gas emissions.

But I also have to point out it has the added benefit of also improving nutrient management and avoiding nitrate impacts to our groundwater aquifers. We have been able to reduce our water use through those programs by one and a half million acre feet a year. So I think that's pretty astounding investment. The Governor's budget is proposing to shift the remaining unencumbered funds in this program because it was multi year funding. It's approximately $20.6 million to the current year's funding for greenhouse gas emission reduction Fund.

And we would appreciate the support for that so that we don't have a gap in funding this program. I also want to point out that we have a priority for funding historically underserved and underresourced farmers. And we're very proud of our minimum of 25% to 35% of our funds going out that way. In our last round of funding that we put out because we've been investing in technical assistance, we had over 500 applications for this $20 million in the first 48 hours.

So I think it's proof that we're reaching the people we really want to reach to make these programs work. We also have been not just a national leader, but a global leader in livestock methane reduction through the investment that the Legislature has made with the Governor in our dairy digester program, which certainly has its share of controversy. But it is, in fact, one of the most cost effective ways of reducing methane.

And I think that the participation and the matching dollars that our dairy families have brought to this project really shows that this is probably one of our best examples of circular economy, taking that dairy waste as biomethane in dairy digesters for either renewable electricity generation or renewable natural gas generation, and decreasing our reliance on petroleum products. But I also want to say that yesterday, one of our dairy families testified at our state board of Food and Agriculture.

They are the first dairy that we know of in this country, and maybe one of the few in the world where their dairy methane goes to electricity generation. And through its fuel cell technology, they are now producing hydrogen. And we believe that biomethane is one very immediately available technology that can accelerate our move to hydrogen production in the state. And dairy families are very eager to be a part of that solution. In our current year funding, we've had $80 million.

We Reserve $24 million, which the Governor proposes shifting to the greenhouse gas emission reduction fund. We reserve that because our federal dollars that are available and our dairy research foundation has been able to draw down multi year funding for $75 million. But it requires a state match. And so we reserve that $24 million so that we can be a part of drawing down that additional federal funding.

And it's called Dairy Plus because it's really about investing in the new, latest technologies to make sure that we're not just locked into what we have been doing in the past, but we're creating incentives for the new technologies to help us reduce methane. I can go into the numbers for methane in just a moment, and I will, and I promise. We also, thanks to the legislature, had investment that was made for research projects.

The methane reduction from manura is only one part of what we need to do on the methane. We also need to address interic fermentation, which is feed additives or other dietary supplements to reduce interic fermentation. It's hugely challenging the biology of the cow. It's the health of the cow. It's making sure that there are no unintended consequences for the products that come from the cow. And so we are still awaiting approval by the Food and Drug Administration of one of the first products to be available.

We have been promised for months now that it's going to be out any day, but we do know it should be approved yet this year. And we had a total of $10 million that we put into this type of research. We're going to have to run trials and demonstration projects to collect the data to prove out what we hope will be one of many solutions to interior fermentation. I want to shift very quickly to nutrition. It's a passion of mine.

I want to make sure that every Californian has access to the healthy, bountiful food that we grow in this state. And thanks to the championship of our first partner, I've been working with her over the last three years on farm to school. And I just want you to think about what could happen if we really fully funded the access of our local farmers to being able to have the procurement, the power of procurement of our school institutions.

Like, that's the biggest restaurant we run in the State of California on a daily basis. But being able to have access to that local food, supporting those local, many of them are small farmers, historically underserved farmers.

Keeping those dollars working locally in the economy, improving the nutritional offering because this legislature approved significant funds in the last few years at the Department of Education for kitchen Infrastructure and culinary arts, for nutrition service staff to really make sure that we're offering children what's tasty and flavorful and it's attractive to them.

If we invested in that in a more robust way, I think we would avoid chronic diseases and the extraordinary cost of health care at the end of life, which is kind of like on my horizon. I can see it from here. So I'm very proud of the $90 million that's been invested. $60 million is what is being protected in this year's budget. We are reaching 163 school systems that includes five of the state's largest school districts and one and a half million school students.

Just last week, I represented the first partner at the White House for the White House challenge on hunger and nutrition. Our goal is to reach 80% of our school students by the year 2030 as part of that challenge. So we'll keep working on that. Obviously, there are programs that do not have funding proposed in this year budget. I know it'll be a robust discussion. We've had in the past $21 million for our California nutrition incentive program.

This has been drawing down federal dollars so that our calfresh recipients can qualify by redeeming their cards and get double the amount of fresh fruit and produce at farmers markets, as well as vegetables and tree nuts. And so it's been a great program. We're working very closely with the recipients of those funds to see how we can extend the use of those funds over this next year.

While there may be a gap in funding, so that we can be positioned to qualify for a federal program a year from now. So we want to make sure that we're doing everything we can to avoid any significant gap in the access for those, even though it might be at a reduced amount, so we can extend those dollars longer. The other program I wanted to touch upon is our healthy refrigeration program.

This is part of the infrastructure of making sure that small farms have the equipment they need to be part of the farm to school program, as well as improving access of healthy food in corner stores or in food deserts. We've had 11 and a half $1.0 million in that program, tremendously oversubscribed, but we do have a federal grant right now. We just closed that grant last week on local resilient food systems. USDA provided $30 million to CDFA.

I have to give you astounding numbers on this to show how much interest there is in really building out this infrastructure, we have $30 million available. We had 300 applications totaling over $300 million. So the interest is there to really invest in our local school systems, to invest in resilient food systems. Food banks are an important part of that, and we look forward to working with you as we make these hard decisions.

But I'm very proud of what we've been able to accomplish to date, and I think that the data we're collecting from these programs, which still have two years left in them, will be informative for future decisions as other budgets and budget scenarios present themselves. So I thank you very much for your attention. I'm sorry I went on so long. You can tell I really love what I do, even when I have a gravely voice, thanks to the trees and the allergies. Yeah, that's ag. That's me. That's ag.

Really appreciate your passion and sharing the allergy issues with you. I think it's really hard for us to overestimate how much impact we could be having on the diets of young people for the rest of their lives with the food to school program. I've seen child after child, suddenly they started eating foods that they hadn't been eating, and the same thing, a significant impact from the ability to go to farmers market and buy fruits and vegetables. So I applaud that.

And while agriculture is one narrow slice of California economy, it has a big impact on everybody if you look at those two programs. So thank you very much. Thank you, Secretary Omishakin. All right, so Secretary Omishakin and the.

Transportation agency, thank you, Chairman and Member Connolly. Good to see you both. We're going through trying times, as my colleagues have discussed. Very well, I'll say that as I listen to them, I couldn't be prouder of what this administration, what the Newsom Administration and what my colleagues, what they're doing, what they're leading, as we not only battle through climate related challenges, but also the budget. And as you and I briefly discussed on the way in, our prudence now more than ever is important.

I think we've always done that, or at least as of recent as a state, but even more now than ever that prudence is going to be required. So proud to be standing or sitting with my colleagues from the various agencies across the state. So I want to share briefly the administration's climate focused budget proposals for transportation. As you've heard, we're facing some dark financial storm clouds, but it's also important to note the silver linings.

And when it comes to transportation, I believe there are many notably, while the budget proposal for transportation contains significant funding shifts and delays, we're able to maintain 99% 99% of funding in the governor's historic clean transportation infrastructure package. Secondly, we're continuing to prioritize our most important transportation investments, putting people first and focusing on our core four priorities of safety, equity, climate action, and economic prosperity. These investments are already benefiting communities throughout the state.

For example, just in 2023, California awarded more than $3 billion for public transit projects. It's also worth noting California has received nearly $38 billion in federal funding in a little more than two years from IJA or bill, the bipartisan infrastructure law. Of that 38 billion, almost 28 billion has gone specifically to transportation. And that 28 billion includes a $3.1 billion investment in high speed rail that President Biden announced just late last year, in November of last year.

So, keeping all that in mind, the Governor's budget proposal includes $3.7 billion in delays, 791,000,000 in Fund shifts, and $200 million in General Fund reductions. Importantly, these solutions will have no impact on overall funding amount of previously awarded to previously awarded projects. So projects that have already been awarded are safe.

The delays that I mentioned, which spread out the funding for the TRCP program or Transit and Inner City Rail Capital program, our active transportation program, our highways to Boulevard program to align the budget with project expenditure schedules. These should not impact these programs. The fund shift is essentially swapping out some general fund in TRCP with cap and trade dollars, with no change in the overall funding amount. Lastly, the budget proposes a reduction of $200 million for active transportation.

Even with this reduction, we still intend to Fund the full $1.5 billion of projects originally awarded by the CTC. As I mentioned earlier, Governor Newsom's clean transportation package is already benefiting communities throughout the state, from public transportation to high speed rail to active transportation. And maintaining this level of funding will allow us to continue to modernize our vital infrastructure.

As I've said before, and I'll say it again here today, as the largest contributor of planet warming pollution in California, transportation has to be a part of the solution, and we're not backing down on our climate commitment. And the Governor's budget is further proof of that. We also continue to make progress in implementing the CAPTI, the climate action plan for transportation infrastructure to invest billions of discretionary transportation dollars annually to aggressively combat and adapt to climate change while supporting public health, safety and equity.

In January, Kowster, the agency, released its second annual report detailing the state's progress under CAPTI, finding that California has completed nearly all the actions to align the state's transportation funding programs with its climate goals well ahead of schedule, along with other notable accomplishments. Additionally, Kowster is committing to a public process this spring to accelerate progress in meeting the state's ambitious targets to reduce vehicle miles traveled. This will be the first update to captive since Kowster adopted the plan in July of 2021.

So in closing, there are dark clouds ahead, and I don't want to minimize that. But as I said earlier, when it comes to transportation, there are quite a few silver linings. And I want to emphasize again that we're maintaining nearly all our clean transportation funding commitments, which will continue to position California for increased federal investments and accelerate our transition to a safe, sustainable, equitable transportation system that continues to power our economy and protect the environment.

With that, Mr. Chairman and Member Connolly, glad to take any questions or comments from you. Thank you.

Thank you very much for being here also and joining your colleagues. This is a great overview each year when we have the four of you come and get a sense in terms of where we are with the climate package. I just have a few things that are important, I think, to make sure we surface from an overview standpoint.

Transit is a big concern for me and I think for the assembly, and it doesn't mean that we're all of the same mind, but I think we are all concerned that it's going to require rapidly evolving technology, rapidly evolving infrastructure and how you keep up with that. And public agencies are not generally known for being able to move fast and implement new technology, et cetera.

If we don't have new thinking about transit, we're probably going to have lots of significant challenges, as we've already had that with ridership dropping, et cetera. And so some people have concerns that it's a management issue at the local level. Some people have concerns that we're not investing enough. Some people, the concerns are all over the map. So it's not all just, hey, we need more money for transit. We don't know how to spend the money for transit in a way that gives the state confidence.

When transit was being funded at the local level with a little supplement from the state, that was one thing. But if the state's going to play any significant ongoing role, then the state's going to have to have greater confidence that we're going to have solutions and address the challenges that are out there so that it just doesn't become a bigger and bigger budget item for us without any sense of accountability.

So that's a huge issue, I think, for lots of different assembly members, again, with a wide variety of opinions about that. The other thing I wanted to get on the radar screen. We're making a huge investment in charging stations out there. Just tremendous investment.

When you see a front page story in the LA Times about the charging stations not being maintained properly, et cetera, I'll be curious, and not ask the specific question now, but I'll be curious what are all the things that we can do to make sure that the private maintenance of these, because many of these are where we funded something, but somebody, the private also did that, that if we're going to make that investment, that we get that steady maintenance of those charging stations so that the public, because we're starting to have some people lose their confidence in going to EV infrastructure because, I mean, going to an EV vehicle because of stories about that and stuff.

We need more people to go that direction. So those are the two things I wanted to get on the radar screen. If you have any comments about either one of those. Great.

Yeah, just briefly, Chairman. So on your first note about transit and its importance on many fronts, I couldn't agree with you more. Thankful for you and the other members and of course the Governor last year for allowing the $5.1 billion to finally move forward to invest in transit. So there's no doubt a challenge with how transit agencies in the past have managed their operations. There's a challenge there. Many have done a very good job, but there's some spots, if you will, improvements can be made.

But when you have the pandemic that we had that completely detonated ridership, some ridership was down by. In some areas was down by 96% plus. And in many cases, they're coming back. The ridership is back. I think we're on the right path. The Governor allowed me just last month to announce a transit transformation task force that where I've appointed leaders from across the state, different pockets of the state, more than 20 leaders to help guide the vision and the future for transit in the state.

So some are probably from your district. I can follow up with you to confirm that, but I think we're on the right path. But I couldn't agree with you more on the importance of transit. For us to succeed from an equity standpoint, safety and no doubt climate. So we have to keep going down the path that we're going, by the way, there's always a healthy competition between us secretaries. Secretary Ross asked me, did I eat breakfast?

I want to ask her, how did she get here today?

I didn't walk. Okay.

Transportation somehow got you here, I promise. And again, transit is a key part of that. To your point about infrastructure and charging, zev, charging. As Secretary Garcia mentioned, Governor announced huge milestone just last, was it last week? Just last week, 10,000 charges. The maintenance issue on our side, the public charging. We're going to do our part.

But in the cases where we funded private entities to manage that, that's something that I don't know if Secretary Garcia, if you have any comments or not on that, but it's something we need to check into, especially if we funded private entities to install chargers, how we're going to make sure that they maintain those charges over time.

Not just give them the funding to implement and walk away, but if they privately install them with their own money, that's their obligation, that's their responsibility to make sure that that's done. But in that place as well, I think we're leading the nation in many cases we're leading the world not only with the vehicles but the infrastructure as well.

Could I add, because I think it's of note that just a week and a half ago, our division of weights and measures has been a part of making sure that the charging stations are metering out what you say you're getting and working with Tesla since the first of the year, they have opened up their network to other car manufacturers. This is a really huge deal.

They have a significant number of the fast chargers and we were able to work with them to not only do that adaptation, but also to be able to use your phone. The weights and measures functions are more than 100 years old and everybody thinks of it as something very physical. And being able to really make sure that we advance with technology to be able to use that I think is a pretty significant addition to the great work that you're doing there.

All right, thank you. Thank you. I have some overview questions specifically I would like to swap out, but not yet. I want to see if Member Connolly has any questions for either of these two secretaries while we have them up here, and then we'll switch to Secretary.

Garcia and Secretary yeah, no, I appreciate that. And maybe take the opportunity to follow up on a transportation question. And you may have addressed it, but as was noted, I think we're talking about a $2.8 billion in general fund reversions for transportation projects that have already been awarded funding. Do we have a sense, I mean, is this going to affect projects on the ground locally, in communities?

Is there a concern about jeopardizing the overall completion of projects in that scenario, I think you also mentioned there might be some backfill, but how is that going to play out?

Yeah, so good question, Member Connolly. So the actual number, just to be accurate on this, is $3.7 billion in delays across, again, multiple programs, $791,000,000 in Fund shifts and $296,000,000 in reductions. So really the only program that is facing a reduction is the active transportation program, where the funding that we use to build walking and biking paths across the state, which is a very important program, critically important program, $1.0 billion has already been sort of programmed for active transportation. That money will not be affected.

So what's the decrease in active transportation?

It's for future projects. Future projects in active transportation. So what's already been programmed won't be affected. And the same thing with all the rest of the money that we're talking about here, it's either shifts or delays that we're referencing. So anything that's been awarded and funded already will not be impacted. And most of that, again, is coming from the TRCP program.

And I appreciate that. So I think in light of that, the concern will still be what are the actual impacts of delays going to be kind of on projects that are in the pipeline for local communities. Do we have a way of getting our arms around that, tracking it, following?

I can get you specific details on that. But the way our team looks at this, it's a bit of a cash management approach that they use when you're implementing, as you well know, when you're constructing or building infrastructure projects, they happen in phases. So you rarely ever need the entire 100% of the funding up front. It's through multiple phases. And so we have a relatively good sense of when funding is going to be needed for each one of those phases.

And so the money has been delayed or shifted based on those phases for implementation. But I can get you, of course, Member Connolly, I can get you some specifics on potential impacts. But for the most part, a cash management approach is what we've used.

Yeah, no, that would be helpful and appreciate the ongoing dialogue that we'll have on that. It's come to my attention, I think we're talking about in terms of active transportation program cuts going or in the future, as noted, about $200 million. So that is significant. And certainly we want to continue to prioritize active transportation as well.

James Moore with the Department of Finance. I just wanted to reiterate what the secretary said. We have two different kinds of delays. One is with the formula TIRCP program, we are actually taking $1.0 billion that would have come out and gone into local coffers in the budget year and actually delaying that a year. The other 2.7 that someone mentioned earlier, that really is the cash flowing strategies. In that instance, we're really aligning the budget with the project expenditure schedules.

And so, like the secretary said, there really shouldn't be any program delay. They're planning to spend it in a given year, and we're going to make sure they have the money in that year. That really should have no programmatic delay. The $1 billion will result in the locals getting some of that money a year later. So I just want to make sure that that distinction.

Okay. Appreciate that. Then I have some overall as well. So whenever we get back into that.

Thank you. Let's hear from LAO, and then we'll ask you two to come back up, and then we'll get you out of here because we do.

Department of Finance first.

Zero, I'm sorry. Yes. Department of Finance.

All right. Stephen Benson, Department of Finance.

You want to switch over there so you don't have to crank your neck also around? Right. I'm going to ask them to remove this thing. Yeah.

Thank you. Good morning Chair and Member Connolly. Stephen Benson with the Department of Finance. I'll try and keep my comments brief. The secretaries that have gone before us did a great job of covering remarkable progress and things that have been accomplished with the funding. So I'll try and focus primarily on the overall budget and sort of strategies for how we've come up with some of the decisions we made.

So, as I think folks are aware, the administration projects a $37.9 billion budget shortfall, and we have the challenge of trying to balance backfilling that, along with trying to maintain as many of the promises that have been made and maintain financial responsibility.

And so in doing that, we feel like we've managed to be able to lessen that challenge, I guess, to a certain extent because of the foresight over the last year in terms of how reserves were built up, that certainly helped a great deal, and then we've had to prioritize where to maintain funding and where to make some cuts. So, as previously mentioned, the 21 and 22 budget acts allocated approximately $54 billion over five years for the climate agenda. The budget maintains 48.3 billion of that.

So about 89%, and that's over a seven year period. So it spreads it out a little bit, but maintains, like I said, 89% of the funding commitments there. I think it's been mentioned previously that part of what we've been doing and trying to prioritize budget is prioritizing equity investments and populations facing disproportionate harm from pollutants and other climate impacts. And we've also, in trying to solve the problem, we're continuing to leverage and pursue as much federal funding as we can.

So as of beginning of the year, approximately 15.5 billion has been secured in California from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. I think, actually Secretary for Transportation talked about some additional federal funding. That's outside of those two acts that have also been coming in to help with transportation. So the 15.5 million sort of only captures one portion of what the federal funding we're trying to secure is within the climate space.

Specifically, about 6.7 billion of the general fund solutions are climate related, and we're achieving that in a couple of different ways. 2.9 billion of it is through reductions, 1.9 billion is from delay, is attributed to delays, and then 1.8 billion is attributed to fund shifts, which is primarily to the Greenhouse Gas Reduction Fund. So I just wanted to emphasize that in solving 37.9 billion, only 2.9 billion is reductions in the climate agenda. And that's part of that 89% maintaining of the funding.

The budget also includes approximately 565,000,000 in additional non climate related solutions in the natural resources environmental protection area. That includes $350,000,000 of revenue borrowing, 175,000,000 in delays, and $39.9 million of reductions. So again, just from a context standpoint, wanted to just emphasize that what this represents really is a trueing up of our reconciliation of one time expenditure levels to reconcile with sort of corrected revenue projections. And I think it's important to note that as a part of that, there aren't base budget reductions in this budget.

If you compare the base budget for most of these departments in 1920 to the base budgets for 24-25 there's actually growth in base budgets. All of this is being done through correcting one time investments.

You mean 2020. You said 1920.

The 19-20 fiscal year. You could use the 2021 fiscal year, but that's sort of when we started doing the one time investment. So I was picking.

But you mean 1920 or 2020?

Yes.

Thank you.

20-19.

That's basing us at a very interesting spot.

Sorry. We're really going way back.

Exactly.

Of course there's growth. Thank you for the correction or clarification, but I just think that it's important to sort of note that base budget consistency and actual growth over the last several years as well, and being able to address this within one time expenditures. Our framework for sort of viewing this and addressing the challenges is first we wanted to identify programs where there is available funding still left to address.

And that's one of the key things we looked at is availability of funding over multiple fiscal years, the potential availability to shift to other funding. So as we know, there's several shifts to greenhouse gas reduction funds. So we looked at that as a way of prioritizing general fund solutions. Considering previous reductions and the overall funding maintained for each of the respective programs was an important factor. As I mentioned, prioritizing equity and investments for priority populations, important part of the framework.

Protecting funding for the most immediate climate risks such as water and wildfire, extreme heat, those types of things, was one of the priorities we use. And then the potential availability of federal funds as we talked about, important factor in trying to decide how to do that. The secretaries did a remarkable job of talking about each of the packages. So I'm not going to go through all of that again for you.

But if there's any of the packages that you need, additional information in terms of funding level provided, amounts maintained, that kind of stuff, we have all of that available to sort of remind folks of. But I think most of those were hit on by the secretaries. I think the only one that maybe we didn't hit is in the community resilience category. The 21-22 budget is committed to 1.9 billion for community resilience investments and the budget maintains 1.2 billion.

Of that, or 67%, the budget reflects 89.8 million in general fund reductions across programs in that area. But I think all of the other climate categories have been addressed best. So I will end my comments there and we'll be available to answer questions as needed.

Great. Thank you very much. Pardon our trying to make sure our schedules work here, given the time. I have one question for you. Could you help us? It looks like we are going to have, well, we know we're going to have a significant, we have significant adjustments this year, and we're probably going to have significant adjustments again next year. And what is the benefit of programming spending a couple of years out?

Why not just wait and see, rather than have some people feel like this funding is coming and then we have to cut that funding? Could you help us with, what are the benefits? What am I missing? What are the benefits of doing that? I'm not trying to be critical of it. I'm trying to understand the benefits of that because I see some challenges with it, particularly as we have deficits.

So I think as reflected in the proposed budget, there's a lot of ways to go about addressing balancing budgets. And, of course, the Governor's Budget projected significant shortfalls in the next several years. But I think what we've seen and part of what we're correcting for this year is that there's a lot of volatility in terms of California's revenues.

And so some of these delays was the benefit we saw is we're trying again to sort of maintain and prioritize certain critical areas and I think maintain a certain level of optimism that hopefully we'll be able to continue to deliver on some of these. So I think that really was the primary benefit is we're sort of viewing the volatility and the need that we're going to have to discuss and correct each year anyway, but try and maintain as much priorities and promises as we could.

Optimism is not a bad goal. Right. All right. Hey, thank you very much. And our Legislative Analyst, Ms. Ehlers.

Good morning. Rachel Ehlers with the Legislative Analyst's office. I'm going to speak from this handout, but I'm going to go at the warp speed version of the presentation, if that's okay, in the interest of time.

Because you and I have been over this twice.

We have, and I know you're going to have many other hearings going in detail, but the handout is also available on our website for those who don't have it. So just to start with overall budget context, I think we all know we're facing a serious problem. Our office estimates you are facing a $73 billion problem to address with this budget, even under the governor's revenue forecast, which is more optimistic than our offices.

Even if you adopted every proposal under the Governor's Budget, the Administration is estimating $30 to $40 billion shortfalls in each of the three subsequent fiscal years after this budget. So it really is a pretty significant problem facing you. We do think that looking at reducing one time and temporary spending is a really important tool for you because it allows you to save some of your other tools like reserves for future years.

And also it is kind of of the essence that you think about this in a more timely fashion because you can't really get out a few years from now and say, I wish that we reduced that one time spending a few years ago. So it is a key tool to think about, and it is important to think about it in the near term.

So we, as your budget advisors, take our role pretty seriously as helping you address your policy goals, but also helping you address your constitutional obligation to build a balanced budget. So that's really the context of our suggestions and recommendations. We really want to give you options because you have options. The governor's proposal is not the only path you can take.

So in our report that we put out a couple of weeks ago, we try to identify all of the funding that has not yet been spent without prejudice to the program, really to give you the tools that you will need to try and balance all of these goals. So turning to the second page of the handout, this just provides you an illustration of really the unprecedented level of General Fund investment for these programs in recent years. This figure reflects the governor's proposal.

So even with the proposed reductions, it really has been quite a bit of funding for these programs that have historically been supported by bond funds or special funds. That's both true for the environmental programs as well as the transportation programs. So even with the proposed reductions and difficult choices that face you, as Secretary Crowfoot noted, you really will have sustained some pretty unprecedented investments in these types of activities. Turning to page three, this just summarizes what you have already heard today.

The governor's proposal focuses on three different strategies, reductions, delays and bund shifts. It saves $4.1 billion from the climate and environmental programs across the budget window. But that savings do end up being less across the longer period because once you do the delays and they come back in, that erodes some of those savings. So we estimate 3.6 billion across the multi year period. Page four provides an illustration of these proposals.

It's nicer in our report in color compared to the grayscale, but I think some of the key takeaways are most of the funding is retained, but also there are some different choices across the different thematic areas. For example, in the zero emission vehicle package, the governor's proposal would sustain pretty much all of the funding, 100% of the funding, whereas in comparison, in coastal resilience, only about half. So there's some policy choices here.

Again, back to the theme of you do have options. Turning to the next page, for transportation, as we've already discussed, it's those same three strategies of delays, fund shifts and reductions, but a much lower amount of reductions, and then also these kind of cash flow adjustments, as assemblymember Connolly mentioned, where it is a delay, but because those are really locked into specific projects already, you have a little less flexibility about choosing not to provide that funding if you want to avoid disruptions.

We also provide on page six the similar illustration of that funding, and you can see a much smaller amount of reductions. So getting to our overarching recommendations, we think there are several merits. I'm on page seven, if you're following on the handout. Several merits to the overall architecture of the governor's approach to focus on these one time funding proposals, to look at kind of funding that hasn't yet been committed yet, that that's a good place to reduce, to avoid reductions, avoid disruption, as compared to looking at base ongoing program, which would be quite a bit more disruptive, looking at the greenhouse gas reduction Fund or other funds to sustain some of your highest priorities.

We do have some concerns about some level of, some components of these proposals, particularly, as you were mentioning, Mr. Chair, some of these delays that shift funding into future years, we have concerns that those might not be affordable given out your budget deficits that you're looking at.

And so what kinds of expectations are you setting up for the field, but also what kinds of decisions are you setting up for yourselves in a few years or even next year when you're right back here, unless we face kind of unexpected revenue recovery, which we could, but it really is depending on what you want your baseline to be.

Similarly, there's quite a bit of reliance on out your greenhouse gas reduction fund in the governor's proposal that we think given the uncertainty around what's going to happen with those cap and trade revenues and also what's going to happen in your larger budget priorities, that maintaining some of your flexibility might make sense. You do have other options. There's quite a bit of unspent funding that has already been appropriated. We estimate over $1.0 billion. So those are options you could look at that the Governor sustains.

If you wanted alternatives or additions, you could use GGRF for different policy priorities. Some of this might require early action if you want to kind of stop and pause funding to capture some of these savings. So that's an important thing to think about, too. We did know as we looked across the governor's proposals that, perhaps unsurprisingly, the Administration really prioritized the administration's priority programs in what they sustained as compared to what they reduced.

So as you're putting your package together, of course, we'd suggest that you may want to focus on legislative priorities as part of that balancing. So turning to the penultimate page, page eight, there's a pie chart of some of the federal funding that we have identified that is coming to the State of California, again, nicer in color in our report if you want to look there. So federal programs are not usually a dollar for dollar match with state programs.

They may have different matching requirements, different programmatic allowances for what the funds can be used for. But at least in these broad categories, it gives you a sense as you're looking across where you may need to make changes in state funds to know what other resources may be available to achieve the broad categories of these goals. And then finally, to the last page on our overarching recommendations.

We do think it's important for you to maximize General Fund savings from one time funds to the degree you can to again preserve your flexibility around future budget decisions and trying to protect your core based programs. Thinking about alternative or additional solutions, thinking about early action when you may need it, using alternative funding sources to sustain your highest priorities, minimizing those out your commitments, and also thinking about, as you mentioned, Mr. Chair, what do we know about what's effective, and is there additional information may we want to collect to help inform those decisions?

Thank you for being brief. Appreciate it. And like we've had a good opportunity to speak, I'm going to ask the two of you to step down and ask the four secretaries to come back up, and we'll try to keep these questions very brief. And then question, for LAO, go ahead. Sure. I'm sorry.

Namely on the staff analysis is indicating there's approximately $1.0 billion in unspent funds. So wondering if you two can provide clarification in regards to these funds. Are they mostly held up in certain programs or departments? Are there any issues with getting funding out the door in a timely manner?

They really span across multiple departments and multiple programs. Again, we did identify the Administration has been very forthcoming with the information. Some of it is because the program is brand new and it just takes time to get out the door. Some of it may be because there is kind of more limited demand. I think it really does vary. In some of these cases, they may be really high priorities for you and you don't want to take back funding.

And in other cases, even if they're priorities, they may not be as high as some of the other programs you want to maintain. So again, our objective here was really to identify them for you so that you have them as options. But I think in answer to your question about why the story varies because they span so many different programs, I'll.

Just add that I agree with a lot of that characterization. A lot of that is funding that was in the process of being committed through public processes and stuff like that. So it may not have been spent at the point in time that the data was collected, but boards have been taking actions and grants are being made. So some of that funding is sort of in the process of being encumbered and spent since the release of the Governor's Budget over the next few months. And so that's a lot of it is just sort of where it is in the pipeline, but some of it's prioritization.

Do we have an overall estimate of the level of uncommitted funds at this point?

So the 1.1, roughly billion that we identified is, based on the information from the Administration, kind of what would have been uncommitted by kind of the end of March. We didn't include funding that was going to be kind of going out the door in February and March. So sort of roughly that time period, we think as of roughly beginning of April, there's about 1.1 billion uncommitted. So again, if you wanted to try and capture some of that savings, you might need to take some early action, because by the time you get to June 30, that number likely would be lower.

Anything else? Great. Good. If you guys could switch out, please. Thank you. So I appreciate having all four of you here. We get lots of questions. We didn't get these questions when we had $100 billion surplus, but we're now getting these questions, why did they make this cut? Why did they make that cut? And since this is the area on the budget that had the most cuts, it's appropriate, I think, for me to sort of carry those questions to you. I don't think there's an easy answer.

I mean, I wish there was. There's all kinds of things people want to know. Is it because this is backfilled and each one of those is different. I've recognized that. But at the same time, could you illuminate us some on what goes through your mind, what's important in each of your four areas? And I know you've made references to equity and made references to various things, but specifically anything about this budget that you could have the Assembly Members become better, more informed about that. So probably should have given you a heads up about that question.

Well, I would make an overarching point first, which is the Governor, the Legislature, when we did have those historic surpluses, were very carefully to spend it in a prudent manner and focus most of those major spending increases on one time spending, obviously, because lessons were learned over a couple of decades ago about putting those one time surpluses to ongoing cost. So our budgets experienced historic expansion.

I mean, I would have never conceived of our programs having the amount of funding that they did as a result of that focus on one time funding. So obviously then when there is a budget challenge like we're encountering, we're seeing those programs that one time funding actually be the area for reduction. So to me it seems logical from a fiscal standpoint. I think in my world at the Natural Resources Agency, we're really focused first and foremost in protecting people from climate impacts.

And that's why you're seeing so much of the wildfire budget and the water budget be retained specifically because of the wildfires we've experienced, as well as the intense drought, the impacts it's had and flooding. But as you point out, Chair, these are not easy decisions and we also work to maintain balance. So in every single area, even those areas that had a larger percentage decrease, we're maintaining what is a historic expansion in those programs.

I'll just add protecting our base programs was most important because I've lived through having to cut those programs and it's very hard to recover from what's really core to our functions, but that does not diminish anything that we have been able to do. I want to reinforce that as we had these one time funds, there was a constant thought about the longer term strategy. We might not have those next year. They might not get built into our budget. Where will there be federal dollars?

And so our investment in technical assistance and capacity building has been huge, and the Legislature has been a powerful partner in that. I will recall a couple of years ago the reinvestment in UC cooperative extension. That is huge, of making sure that every farmer in every corner of the state, but also what they do on nutrition programs and all the other things that marry this all together.

That was one way for us to be able to give life and knowledge beyond one time dollars and collect the data of what we're doing as evidence for future investment, whether it's coming from Federal Government or from state government. And so those are some of the things that went through my head.

Thank you.

The only thing that I would add and fully support what my two colleagues just mentioned is state investments are part of the equation for how we get to where we want to go. And in particular with respect to our climate goals. We have unprecedented federal investments that we're seeing, including over 15 billion that we're seeing influxed into the state.

And so I think that was also a critical driving force in terms of identifying programs where we could potentially leverage that funding and cut back for fiscal responsibility on our side. The other thing is, coming from a regulatory agency. There is nothing like regulations to incent more investment.

And I know that that doesn't always make me the most popular person here, but I think we have such a driving force, particularly when we look at the Air Resources Board and how we have really moved the needle on aggressive zero emission vehicle deployment and making that market signal a reality across our state. And, of course, I don't want to underestimate the impact of some of the issues that you raised, Chair, with respect to our charging infrastructure, and certainly Secretary Crowfoot and I have that as a high priority to ensure that our public private investments really ensure that we're able to capitalize on that charging infrastructure across the state. But we're really moving the needle in other ways through leveraging federal dollars and also through our bread and butter regulatory work, particularly at the Environmental Protection Agency.

Ditto, Mr. Chairman, to what my fellow secretaries have said here. Look, I'll say for us, transportation is a little unique in that a majority of the funding comes from the gas tax and not from the General Fund. So again, the challenges that we're facing, we're seeing delays, shifts, and a very small reduction, $200 million out of a multibillion dollar program, if you will. So it's a little unique and different for transportation. Some of the delays and shifts that I mentioned are mostly in the transit space.

But there's a clear recognition from us as an Administration that transit is critical to help us achieve all the goals, whether it be equity, safety and climate that we're prioritizing.

My final question, how much data do you get in terms of the effectiveness of the programs? Because my impression is we don't get too much. This isn't a criticism. It's just the fact of life with big bureaucracies, lots of money being spent. When I've gone to ask for what's the data show us, it's like, and people aren't, agencies aren't very anxious to show us data on performance and stuff also. That'd be the final quick, just a quick response, if you could.

Well, I think we all agree we work for a Governor who is passionate, I won't say obsessed, with outcomes. And so we are really focused on delivering results of that money. So I'll tell you, one significant improvement in recent years with legislative oversight is helping you all understand how quickly the money is getting out the door, because that's been critically important. But then the next step is obviously understanding the effectiveness of that funding.

So at a different time, I imagine most, we would love to share with you how we're measuring that effectiveness, whether it's on wildfire, carbon absorption in the soils, pesticide reduction or vehicle miles traveled. We're now charged with identifying kind of metrics to determine our effectiveness. So I think if we had more time, we'd love to go into those weeds.

I think I'll leave it there, and I think I would love to have that follow up sometime. Right. Thank you very much. I really appreciate the time that you've spent here.

And thank you to you all. This may be teed up, particularly for Secretary Crowfoot, but others feel free to weigh in as well. In recent budgets, as we know, climate package investments were spread across multiple years of the budget as a strategy. But with the current deficit, these investments are now being clawed back. How can the legislature maintain confidence that the Administration will deliver on delayed investments in out year budgets, especially when the outlook, as we know, is uncertain and even getting worse? What is the purpose of including future budget year earmarks given the uncertainty of the budget outlook?

Yeah. Thanks so much Assembly Member. We're recognizing those historic General Fund surpluses. We wanted to avoid a situation where all of the money gets spent right away, which first of all is very difficult to do, but then, secondly, doesn't maintain continuity. And so thanks to the legislature, we've been able to spread out the encumbrance and allocation periods to be able to create more of a pipeline of sustained funding.

It's true that a lot of this funding is one time, but when we spread it out, we're able to maintain pipelines. So as an example for wildfire, it's really important that we not only invest in wildfire resilience projects around vulnerable communities, but then maintain that work, right? So that funding is spreading out.

So from my perspective, actually spreading out the investments and sometimes delaying the investments if we already have money on the door is a helpful thing, particularly in the natural resources space, which has been so reliant historically on bonds and one time funding. Working to spread that out creates that sort of ongoing funding we're going to need to maintain our work.

This is a follow up, I think the chair put it well, but maybe a finer point here and something we're concerned about. It's namely that with kind of the risk of over promising and good budget years, the current fiscal uncertainty has forced the state to eliminate or pause funding for certain projects. And as the staff report noted, quote, without certainty, the risks that the funding for these projects may vanish will reduce the number of partners the state has and slow progress towards the state's climate goals.

Does anyone on the panel have thoughts on what can the state do now or moving forward with future budgets to avoid this kind of situation where the uncertainty is kind of having those reverberations out.

So I think for an AG, because part of it is social modification, so you don't see immediate results, but over time they're very real. And so I think the investment we've put out there, combined with the technical assistance, is proving the business case for a farmer to adopt some of these practices. And we really work hard on that and then connecting that to building demand for support for local climate smart food products through public procurement.

And that is procurement that will happen just as part of baseline budgets. And so we're trying to think about strategically how do we invest in doing what we can to address climate change so that we can sustain agriculture and food production and changing climate, but connect it to where procurement can be. We are seeing momentum because of farm to school and the investments we've made in food banks as hubs, that there's more healthcare interest and healthcare providers that are investing in prescription food boxes.

So I think it's like the signals to the marketplace, but also making business cases. And I think the investment in nutrition that ties back to supporting local farmers who are growing products in a way that we've said these are the types of practices that will sustain you, is one helpful way of really bringing even more attention to that.

I would only add just, and I think consistent with some of the Chairman's remarks and considerations that you all have, when we think about the opportunity to align our shared goals around expenditures from the GGRF, for example, for those discretionary pots, I think therein lies a real opportunity that we've seen work successfully over the past few years and that we can also see continue to work successfully into the future.

I think in particular, leveraging the various benefits that can come from each dollar spent in that program really allows us to leverage emission reductions, but community benefits the same and a targeted investment in our disadvantaged communities and communities most in need.

Member Connolly I'll just briefly add know this Administration has done, in my opinion, obviously biased, an amazing job at looking into the future and what future needs will be and adjusting to problems that exist that we're currently challenged with. An example of that is a program that the Governor established roughly three years ago called the Port Freight and Infrastructure program, also known as PFIP. He put $1.2 billion into a program to help us support ports across the state.

It's an engagement that we, as a transportation entity across the state that we were never engaged in before. We never invested in the state's ports. But what brought it to light was the supply chain crisis that happened that all of us were. I know Secretary Ross is heavily challenged with this because of moving ag, moving food and agriculture across the state and across the country. So we had to step up and not sit back and say, we don't have dedicated funding to help ports.

We had to come up with funding through the General Fund to do exactly that. But a little bit to your question, outside of some of the comments that were made, including what Secretary Garcia just said, coming up with recurring funding through our existing programs by increasing fees and taxes, et cetera, beyond that, I'm not so sure how you prepare for those challenges that come in the future or that hit you pretty immediately like a supply chain crisis. You can't sit back and not address challenges like that.

Final question and one we're all grappling with. What role can a potential climate bond play in reducing the negative impact of the current fiscal situation on climate programs and the state's climate goals.

Well, I think we'd put the question back to you. As the Governor has explained, that's really the decision around bonds and what gets put on the ballot is a decision between the Governor and the Legislature. And so we're obviously standing by to provide any technical support to the governor's office as well as the Legislature. And I think we wait, we'll wait patiently, like many people in this room, with whatever the Governor and the Legislature decide.

I just want to say that we're all very mindful that the cost of borrowing, which this is, is more than it has been. So we have to be mindful. We are stewards for today, but we also owe it to the future for that. But we are very eager to engage in the conversation, provide our technical expertise, and to hear from you the priorities that make the long term strategic sense for how would we use a bond, an investment in the future, not think of it as a backfill for current pains, even though it's very attractive to think about that.

Thank you. Ditto.

They answered it very well.

Great. Very generous with your time this morning. 2 hours. We don't very often get to have the four of you here for these budget hearings. Really appreciate it, appreciate leadership. Hope you feel the hand of partnership reaching out to try to find solutions and the best expenditures of our dollars and not anything more than that. There's no other coal and stuff. So you're blessed to get to do the work you do. We're all blessed to be able to take on these challenges. So thank you very much.

Thank you.

As we start to bring up the next panel, as I mentioned, we don't often get the opportunity to have the four secretaries with us, so we probably stretched more there. We're going to ask everybody to be as concise as they can with their presentations. We're going to do drought, water resilience and that panel, we'll have the presentation with the panel after that on the salt and sea. We will probably just do our questions, but not do the actual presentation, just so you know. And then we'll get back. We'll see where we are time wise with the others. So if the panel could come up, please, for drought and water resilience.

All right, so who's ever first, if you'll introduce yourself, the agency you're with and go from there, and we'll let you guys decide the order.

Good morning. Megan Larson, Department of Finance. The 2021 and 2022 budget acts committed 8.7 billion over multiple years to support drought resilience and response programs to help communities and Fish and Wildlife avoid immediate impacts and sorry, immediate impacts from extreme drought, while advancing projects and programs that will improve the state's resilience to future droughts and floods.

The budget maintains 7.3 billion, or 84% of these investments over multiple years in programs and projects to bolster the capacity of communities and ecosystems to endure droughts and floods. In the area of water and drought, the Department of Water Resources has three solutions. The first is a reduction in the forecast informed reservoir operation, improving runoff forecasting and snow program by 6.75 million in budget, year and ongoing. This program was allocated 16.75 million ongoing across the 21 and 22 budget acts.

So the General Fund solution would maintain 10 million in baseline support, which would protect funding for immediate climate risks and minimize disruptions to this program. The dam safety program was allocated 100 million across the 21 and 22 climate budgets. This General Fund solution would result in a 50 million reduction of funding, retaining 50%. While dam safety is an important program, the state is not legally obligated to fund these costs for dam owners.

The Administration had to make difficult decisions to balance the budget, but still proposes half of the original funding. The remaining 50 million, appropriated in 23-24 will still enable the Department to advance the implementation of the local assistance dam safety program. The Watershed Climate Resilience program was allocated 494,000,000 across the 21 and 22 climate budgets between the Department of Water Resources and the Wildlife Conservation Board.

This General Fund solution would result in a total of 438.4 million reduction, which maintains 56 million of the total original allocation, which at this point has all been spent or encumbered. This includes 126,000,000 reduction for the Department of Water Resources, maintaining 22% of the original funding. This will not impact DWR's near term program efforts. This also maintains 21 million at the Wildlife Conservation Board for the Cascades and High Sierra upper watersheds. And then I'll turn it over to my colleague to address the waterboard.

Good morning. Viet Long Nguyen, Department of Finance. For the waterboard, there are two solutions. First, PFAS support has been allocated $200 million across the 2021 and 2022 climate budgets. The Governor's Budget proposes a reduction of $101.6 million. This maintains $53 million previously allocated, or 27% of the 21 and 22 climate package.

This solution was chosen using a general framework outlined earlier as support for PFAS could be shifted to federal funds delivered through the drinking water and clean water state revolving funds and the bipartisan infrastructure law. For water recycling and groundwater cleanup, the 2021 and 2022 climate budgets allocated $800 million. The proposed solution is a net reversion of $174.4 million General Fund and a delay of $100 million to 2025-26 for water recycling projects. The solution maintains $348,000,000, or 43%, previously allocated in 2021 and 2022.

This solution was chosen using the general framework outlined earlier because large municipalities planning and constructing water recycling projects generally have the technical and financial capacity to implement these projects through low interest loan financing through the clean water and drinking water state revolving funds. The Governor's Budget both reduces and partially shifts funding for water recycling. It's an important component of the administration's water supply strategy. So this is why we are maintaining the $100 million in 2025-26.

It is really helpful to have that brief explanation as to why you chose that, why you justify that cut. We didn't used to get that last year or the year before that, but that helps a lot. So we really appreciate your response there. Next, cried to Barber.

I can begin here. I've just introduced myself. My name is Joaquin Escovell. I'm chair of the State Water Resources Control Board, here to answer any questions on ultimately a groundwater recharge permitting unit that we are asking for within this budget change. And it's five positions. The reality, and as Secretary Garcia covered, groundwater recharge, especially in these wet years, is really critical, obviously, to the Administration and to the Water Board. The Water Boards actually back in 2017, began creating streamlined permitting for the waterboards for groundwater recharge.

We really saw in 2017 and then consequent years, given how dry things were, those permits weren't really used. We really saw, certainly last year and then previous years, an uptick in the amount of interested parties in temporary groundwater recharge permits. So this unit is really, for the first time, us being able to request these resources, knowing how vital they are, not just in drought or times or in flood times, but really having a consistent unit here to be able to address groundwater recharge issues.

Great, thank you. And we're going to be covering that during issue four.

Apologies. I think I jumped ahead.

No problem.

Good morning. Paul Gosselin, Deputy Director at DWR over sustainable water management and I'll be here to address any questions on the climate change resiliency program.

Laura Hollander with the Department of Water Resources, acting Deputy Director for flood management and dam safety and happy to answer questions on our dam safety program and the forecast informed reservoir operations and snow surveys item.

Okay, great. All right, LAO.

Good morning, Mr. Chair.

I'm going to ask you about Lao's comments.

Okay. I'm Sonia Pettick with the Legislative Analyst Office. And just keeping in mind what my colleague noted earlier, these comments that I'm about to make are no reflection on the merits of any of the programs. We're simply trying to identify all of the General Fund that would be available to you to pull back if need be, if you had different priorities than the Administration or if you needed to make additional cuts beyond what the Governor has already proposed.

So we've identified there are two planned augmentations totaling $700 million that you could consider. This funding has not yet been appropriated. It's only planned. So this includes 500 million for water storage projects planned for the 25-26 budget. We'd note that very few details have been provided by the Administration about how this funding would be used other than it would build on the 2.7 billion provided by Proposition one for water storage projects.

There is also 200 million for drinking water and wastewater projects planned for the budget year 24-25. 50 of this is for drinking water, 150 for wastewater projects. We would note that there is some federal funding available right now for similar purposes provided through the state revolving Fund. Also, we would note that the state has an annual appropriation through 2030 of 130,000,000 from the Greenhouse Gas Reduction Fund for drinking water activities and projects.

We would note the federal funding and the annual state funding, again, does not provide a one for one backfill of the General Fund that's proposed for reduction. But we wanted you to be aware of other funding sources that are available for similar purposes. We also wanted to note there is funding proposed to be delayed. As my colleagues from the Department of Finance pointed out, there's 100 million for water recycling that's proposed to be delayed until 25-26. You could instead consider making this a reduction, and should budget conditions improve in later years, you could always come back and decide to provide an augmentation for water recycling. And then third, we took a close look at funding that's already been appropriated but not yet spent or committed. And in the water and drought resilience package, we were able to identify roughly 775,000,000 of unspent or uncommitted funds. And I'll just highlight three of the larger ones. There's 300 million for drinking water and wastewater projects through the State Water Board.

The Water Board did indicate to our office that it will be committing a lot of this funding between April and June. So to the extent that the legislature did want to pull back some of that funding, it would probably have to act quickly before the money goes out the door. There is also 228,000,000 for water resilience projects administered by the Natural Resources Agency. Similarly, we heard that a lot of this funding will be awarded in the sort of March-April time frame.

So if you wanted to pull back any of that funding, you'd have to act pretty quickly. And then finally, as my colleague from Department of Finance noted, the dam safety program had received $100 million. The Governor is proposing to pull back 50 million. The legislature could consider pulling back the other 50 million, which would essentially eliminate that pilot program.

So could you respond, Department of Finance, anybody, about the possibilities? And LAO's, just respond to LAO's comments. Why would we not choose to go ahead and do reductions? The $500 million for water storage projects? It's a little bit big.

Sure. Good morning. This is Andrew hall with Department of Finance. The 500 million for water storage was part of a multi year commitment from a few years ago. We haven't proposed delaying it or any changes to it at all. So I think it sort of fits with the framework that my colleague Steven Benson and others have mentioned earlier. Know in some sense it's optimism, but it's also important priorities for the Legislature and the Administration. I think more detailed plans would be available next year when this is actually proposed in the budget and the drinking water. So there was sort of a General framework for the Water Board's adjustments, and I can turn it over for more detail.

But we had three programs there, PFAS being one of them, that was a program that there's a significant amount of federal funding that's coming to the Water Board. So that looked like an area that we could backfill water recycling. It is a shared priority. That's part of the reason why there was a proposed reversion, but also money being shifted into the out years.

And that sort of fits in with the drinking water and wastewater infrastructure where, as the LAO noted, there are ongoing federal funds through the state revolving funds. However, this particular pot of grant funding is sort of bridging a gap there where a lot of this would be financed through low interest loans. There's many disadvantaged communities that the Water Board is targeting with that funding who would not otherwise be able to qualify, and it also helps to keep water rates lower.

I appreciate that, Andrew, and if I can add as well, the state revolving fund. Know again, as Andrew said they require an ability to repay loans. They also come with a lot of requirements. And I think that what we have certainly seen is the state General Fund Dollars are ones that we can more flexibly make sure to quickly get out to communities that need them most.

Where the federal program, the State Revolving Fund, even to be able to qualify for principal forgiveness, you have to abide by all the federal cross cutters and the build America buy America provisions and things that even for larger, more sophisticated water agencies, really give them a hard time. So it's hard to replace one to one. The bipartisan infrastructure law investments, the State Revolving Fund dollars that are coming through for these really critical flexible state dollars.

Great. Thank you, Mr. Connolly.

Yeah, thank you. So did want to talk about dam safety a little bit, namely, obviously ongoing concerns on a safety basis with structural integrity. Staff point out that the State Auditor has repeatedly identified 89 hazard dams in the state. So can you talk a little bit about the administration's choice to cut dam safety investments by $50 million? Will these cuts affect any of the 89 hazard dams identified by the State Auditor?

Sure. Andrew Hoang, Department of Finance again, I would just say that the Administration took a holistic approach to all the funding this year, including the funding for Department of Water Resources as an example for later on in the agenda, we're still proposing new funding for priority flood projects for DWR that leverage additional federal funding and prioritized projects for disadvantaged communities and really focus on areas of state responsibility. We did have to make some difficult decisions in which programs would be reduced.

And while dam safety is also a very important program, we would just note that the state is not legally liable to pay for the cost for dam owners. And in these other flood projects, this is an area of state responsibility. And so while we acknowledge that it is important, there just is not enough resources, and this was an area that we shifted funding.

Laura Hollender I would also add this program is a new program. It's the first time we will be funding dam deficiencies. So we are putting together guidelines right now. And this 1st 50 million is really going to be a pilot to sort of see what is working with the program, what we might need to tweak for the next rounds of funding. So we will be able to do several projects with this funding.

Yeah. And I just note of the $50 million, a lot of it is legislative priorities. So looking forward to continuing to talk about that. Our staff has kind of highlighted the level of federal funding for drinking water and wastewater project grants right now, calling it unprecedented, which is great. Can the panelists elaborate on how the state is taking advantage of these federal funds, how much funding we'll be able to secure, and is it enough to cover the cuts proposed in the administration's proposal around drinking water?

I can take that. And what we were very fortunate for is both the passage of the safe and affordable Fund in 2019. Certainly the authorities like mandatory consolidation and other tools that the state board has been able to bring to bear on what has been a generational challenge within the state and access to clean water. The bipartisan infrastructure law came along and has been able to help us accelerate and expand the work that was already starting in the state.

Discussions like Justice 40 and here centering communities that have experienced inequities for decades has allowed us to really be able to align with the Federal Government right now. I know just this year it was announced $1.6 billion will have been coming to the state here over the course of now, this now third year of implementation of the bipartisan infrastructure law.

What we have is an intended use plan, which is a yearly exercise that we go through to identify where the dollars from the State Revolving Fund are going. But importantly, we also have with the safe and affordable Fund, a yearly expenditure plan that also lays out, especially for small, disadvantaged communities, where our investments are going. So we're taking advantage of this. Dollars are going out.

The reality is, of the 1.3 billion that we've received for the State Dollars and then 200 million, as we know, delayed to this year, we're only going to have after this year about $138,000,000 left of those state coffers of the federal funds. I can here dig in and we can begin to explain what we've been able to get out the door. But it is a significant amount at this point.

And importantly, it's coming at a time where the Federal Government here has PFAS as a maximum contaminant limit. They're going to be finalizing. We're here this spring. And so the need and dependency for these dollars, not just for disadvantaged communities, but for all of our water systems to be able to support and keep affordable as we address new contaminants, the rates that consumers pay for water is just really critical.

And then finally wanted to touch on water recycling, as we all know, a key aspect of achieving our water supply goals. So the question is, how will cuts to water recycling impact our ability to reach those water supply goals as outlined in the administration's water supply strategy? So whoever would like to take that.

So the cuts that are being taken here are grants. Importantly, there are still resources with the state revolving Fund for loans there. This year alone we have 11 projects that will be receiving funding from the IUP. I know that that joins with 1.2 billion at least within the last two years that the State Board has invested in water recycling projects. So there's a lot of momentum on our goals for water recycling.

The water supply strategy also had the state board create a strike team to identify all potential water recycling projects out there, along with streamlining recommendations. So that work is ongoing and shows what a priority truly recycling is as a tool. As we combat drought, we reduce the amount of nutrients that we put into our waterways and our bays by recycling and reusing what we pay a lot to move around the state and use.

So I know there is concern certainly when we're reducing grants because that really helps as best with affordability for especially these large recycling projects. But because of the dollars coming from the Federal Government through the bipartisan infrastructure law, because of our ability to even do principal forgiveness with loans, I'm confident we can still continue to make progress on what are incredibly important goals, as we well know, to adapt to climate change, but also, as I said, reduce nutrients, not just create a new supply, but really think smarter about the way we're managing our water.

Thank you very much. I think that. Want to make one comment. I know DWR and State Water Board, you've got some massive challenges ahead of you, trying to make sure we get our groundwater basins studied under control. A lot of good people trying to do good work there. But it's a new task for the State of California, so at least I'm sensitive to sort of making sure you have the budget and the resources that you need to get the job done.

So we look forward to that and stuff. So thank you very much. Really appreciate it. Salton Sea. If the panel would come up, and we're going to go right to the questions for the Salton Sea panel. So we've identified questions for you in advance, and I think they're ones that we're pretty interested in. So glad that you've had them in advance, and so I just want to get right after it. It's all right with Mr. Conley.

I'm going to go through all these questions that we've supplied them in advance. All right. And 2023 budget reduced funding for the Salton Sea by 119 million. Governor proposed cutting it by 169 million. The Assembly pushed back. What's the rationale now for making reductions in 2023 and then requesting additional funding in 2425?

Thanks so much. I'm Samantha Arthur, assistant secretary for Salton Sea policy with the California Natural Resources Agency. Glad to be here. The 2023-24 budget included General Fund reductions like you outlined in the Salton Sea management program.

That was, in light of available federal Prop 68 and General Fund monies in 2023-24 that were being utilized at the time to carry out vegetation enhancement projects and our large scale Species Conservation Habitat project.

With our existing staffing, additional funding is needed in budget year 2024-25 as existing projects, complete construction, and the next set of projects in our pipeline need to progress in terms of design, permitting, land acquisition, and construction steps. So this funding is critical to continue to meet our state legal obligations under the state waterboard order and associated with Colorado River Management.

Just because we had some other options before. Right. Great. And then how close is the state to collecting the lithium extraction taxes?

We've got one of our Department of Finance colleagues coming up for that.

Hi, Erin Carson, Department of Finance, on the lithium extraction taxes.

Could you bring that microphone down a little bit? There you go.

Thank you. So, based on public statements by companies planning lithium extraction projects in California.

A little bit more when you go to look down.

How's this?

There you go. How about you? Can you guys, hear her back there. All right, good. You're on now.

So, based on public statements by companies planning lithium extraction projects in California, we're expecting that collections will begin in the next few years and there will be sufficient revenue by 26-27 to support the positions requested in the BCP. However, we would just note that geothermal extraction is emerging technology, and expected operational timelines have been pushed back in recent years, which creates some uncertainty regarding the revenue forecast.

So, for this reason, the BCP proposes to phase in resources to cover position costs in the out years beginning 26-27 which will allow the Administration to reevaluate new fund sources should the lithium extraction tax revenues not materialize as currently estimated.

Great. Thank you. What are the potential ramifications of missing the 2028 requirement to have completed 29,800 acres? If we don't get that done.

I'm sorry, I actually couldn't fully hear you. Maybe your microphone needs to be lowered.

Thank you.

Thanks.

There we go. What are the potential ramifications of missing the 2028 requirement to have completed 29,800 acres?

So if the Natural Resources Agency misses the 2028 requirement to complete our 29,800 acres, this is a requirement under a State Water Board order. The Water Board could utilize its enforcement authorities contained in water code sections 1825 to 1851. But more broadly, the Newsom Administration is advancing these projects at the Salton Sea to improve air quality and provide critical environmental habitat. So that is at stake as well.

And this proposed funding is needed to move forward restoration projects to follow through on our state commitment under the State Water Board order, but also commitments to Colorado River Management and delays in that funding risk destabilizing those interstate agreements around Colorado River Management.

Thank you. The long term plan for completing the proposed projects.

So for these six projects that are identified in budget year 24-25 these are their next set of projects that are in our pipeline and our long term plan for half of them. The funds that we've identified for 24-25 will be able to carry through to construction to build the habitat benefits and the dust appraisal benefits that are critically needed at the Salton Sea.

The other half of those projects, we will advance planning, permitting and design, and we'll request additional resources to complete construction of these projects in future budget asks.

Request from the Federal Government or from the state budget?

For the federal money. So I'm glad you brought up Federal Funding. We have received $70 million in Federal Funding in December of 2023. That funding is unprecedented.

It's the first commitment from the Federal Government of that scale at the Salton Sea, but it's identified for addressing accelerated impacts, accelerated lake bed exposure from new conservation actions in the short term from 2023 to 2026. So these projects in our pipeline that are identified are state responsibility. And so state asks.

Great. Thank you, Assemblymember Conley. Anything else? Great. Thank you all very much. And I'm sorry you didn't get to make your presentations, but I hope you understand. Right. All right. We're going to go on to issue four. If that panel would come up, please. All right. Whichever one of you wants to go first, if you'll introduce yourself, who you're with and take it away.

Sure. James Newcomb, newly assigned deputy director, Integrated Watershed Management at Department of Water Resources.

Congratulations.

Thank you. Did you want us to go over our items as well, or did we want to do introductions first.

Have people introduce themselves when they start to -.

Sure. So I'm here to represent our request for the $31.3 million for the Central Valley Systemwide Flood Risk Reduction funds. These funds largely are to support projects that are already underway through various fund sources. These projects also represent sort of a new water strategy, if you will, in terms of crossing multiple sectors.

For instance, they set back river levees to allow for increased flood control, reactivate the floodplains to deliver better habitat for native species, and then also allow for recharging of the ground basin.

These are projects that occur in disadvantaged areas. We're looking forward to continuing these projects and moving them forward, and I'll probably keep it brief. And stop there. Leave room for questions.

Next. Cried the barber.

I think it's urban. Looks like. Did you touch urban?

No, not yet.

Okay.

Again, Laura Hollander, Department of Water Resources, acting deputy director of flood management and dam safety. And I'm here to answer any questions on the 33 million in the budget currently for Army Corps of Engineers flood risk reduction projects.

Again, this money would largely be our state cost share for numerous projects in the Central Valley that reduce risk to hundreds of millions people. And also to address any questions on funding for storm damage to state planet flood control facilities as a result of last year's winter storms.

Good to see you again, Chair. Joaquin Escovel, chair of the State Water Resources Control Board here now appropriately on my groundwater permitting item. This is a request again for five permanent positions to be able to create a groundwater permitting unit within the State Water Resources Control Board. And again, this is an incredible priority, obviously for the Administration and the board.

And here brings permanent positions and resources to something that is not just a wet year need, but even a dry year need, insofar as preparing, evaluating, discussing, and ensuring that we're prepared to be able to take advantage of wet years like this.

Anybody else? LAo.

Thank you, Sonia Pettick with the LAO we would just note that within the natural resources and environmental protection areas, there are basically two proposals for new General Fund spending in the upcoming budget, and one was for Salton projects, and one is in the area of flood management.

In light of the budget condition and the fact that it's likely getting worse, we think that the Legislature will want to be very selective in what it approves for new General Fund spending and apply a high bar to what it approves.

So within that context, there are several components to the flood management proposals, as my colleagues from the Administration have noted. And let me start with the three that our office would recommend the Legislature consider approving.

We think these meet the higher bar for approval, so one has to do with the early action funding requested to deal with flood repairs as a result of the 2023 storms. This is, I believe, $29.6 million in both the DWR budget as well as the Fish and Wildlife budget.

We recommend approving this because the state's responsible for making these repairs. 3 million of the funding would be the state cost share to draw down federal support to make these repairs.

And approving the funding early would really allow the repairs to begin ahead of the next rainy season. So we think it makes sense for those reasons. Secondly, we would recommend the Legislature consider approving the funding the 33 million for urban flood risk reduction projects, which are conducted in collaboration with the US Army Corps of Engineers. We note that these projects are really a core state responsibility. They are in the State Plan of Flood Control in the Central Valley.

The state has responsibility and liability for the State Plan of Flood Control. They provide critical public health and safety benefits in urban areas. They also leverage the significant federal funding from the US Army Corps. Pausing these projects midstream would cause, we think, significant disruptions and could result in higher costs down the road.

In addition, it's our understanding from the Administration that pausing a project that has Army Corps funding would cause the Army Corps to then divert the funds to other states for their projects, and it would be very difficult to get that funding back from the Federal Government. So we think those are compelling reasons to approve that funding. In terms of the Water Board's proposal, we think that proposal is well justified and makes a lot of sense.

Not only would those new positions potentially expedite permitting, but groundwater recharge is not only good for flood protection, but also for increasing state water supply and improving conditions in the groundwater basins. In addition, that funding is from the Water Rights Fund, so it would not worsen the General Fund condition this year. And then finally, regarding the system wide multi benefit projects, there are a number of compelling reasons to proceed with these projects.

Not only do they provide support in disadvantaged areas, in areas that the communities may not be able to afford funding these projects themselves, a lot of these projects are in the final stages. At least one of them reduces flood risk in the delta. They also provide notable habitat and ecosystem benefits in addition to flood protection.

But we think the General Fund condition sort of complicates this decision, and we think the Legislature will just have to weigh this priority with other priorities as it considers what to approve for General Fund spending. Thank you.

Any other responses by any of the panelists before we go to questions?

No. I would say what the LAO said was some good points in there, and we would just note that these projects, especially the flood projects, are something that happen on an annual basis based on changing conditions. They really are core areas of responsibility for DWR.

They leverage Federal Funds, and as the LAO noted, if you stop a project midstream, it's very likely that the Federal Funding will be lost and they'll move on to other states or other projects.

So we have a question there, and it is along theme, what we've been talking about. We recharged a basin in Ventura County. We didn't, but a water district recharged a basin in Ventura County, really proud of themselves, and then found out the water wasn't there when they went to go get it.

What kind of evaluation are we doing to make sure that we're getting the recharge that we think we're getting when we recharge the basins?

I think Paul's going to answer that question for us. Paul Gosselin, deputy director of sustainable water management.

Great. Hello, Mr. Gosselin.

Very good question. There's a lot of data and tools that we've been compiling over the years. One is the aeromagnetic method, that's the helicopter that's doing the geophysical mapping of the architecture of the geology.

As well as other work we're doing on basin characterization, which the Legislature gave us funding last year that we proposed to do. So we're going to be going out pulling all that data that we've been compiling over the years, increasing monitoring. So when projects come forward, there'll be a higher level of certainty that the water gets into the ground knowing where it's going to go.

So you're not going to have to do a lot of piloting adaptation. So it's going to place a higher level on certainty for those public dollars that are going to actually get put to use.

Is there a requirement that they demonstrate that the water has made it a year after the project or whatever? Is there a requirement that they have to show some impact.

Typically, depending upon what their purpose is usually they would set up some monitoring component or they're trying to address, let's say, some area where, let's say, groundwater levels are going down. They're going to be tracking that to make sure that whatever problem they were trying to mitigate is actually solved. So it's built into the entire project design that they're going to have that positive outcome for those dollars that they'll be investing.

All right, thank you very much.

Yeah, and if I can add chair as well, as Paul said, the data component is a really big part of it. It's being able to just have a better ability to assess the impact of projects across what is a big state and a lot of landscapes.

Additionally, with the 1.2 million acre feet of recharge that the board authorized, there are part of the water rights process follow up that verifies and allows us to go back and understand what actually was recharged. And so that reporting and that information we can make sure as we work with DWR and all of us here together gets back out to the Committee.

Thank you, Mr. Conley. All right, we're going to go to issue five. So whoever wants to start on this.

Thank you very much, Chair Joaquin Escovel again here, chair of the State Water Resources Control Board. I have with me here Karen Mogus, who is the Director of the Division of Water Quality at the State Water Resources Control Board and can help fill in on what is a really important ask here. As we know, well, as some may know, the Clean Water Act turned 50 years old two years ago.

And here celebrating the Clean Water Act after 50 years and having so soon thereafter the Supreme Court make such a significant decision which retreated the federal role and nexus on protecting clean water is unfortunate.

The reality is that actually Porter-Cologne. The law that created the State Water Resources Control Board was the model for the Clean Water Act, which was, those amendments were passed several years later.

So the state has, as was mentioned at the top of the hearing, a strong history here of leadership, and especially on the regulatory side. So when the Supreme Court decision came down last year, we quickly, obviously, were tracking what were expansions and retractions of the federal scope of the Clean Water Act.

Which is important to note is a subset of what are our state waters. So the board's authorities, Porter-Cologne, encompass fully the state's waters.

And the Clean Water Act we have come to depend upon for decades has been an important program that we've facilitated a lot of that work, but importantly, it's a bubble within that state regulatory program. So our request for 38 positions over two years is to be able to really fill the hole that the federal resources were otherwise at work.

There, the Army Corps of Engineers does wetlands delineations, and in a moment, when we're all talking about wetlands as such a critical feature in our state to protect against climate change, to clean our waters, to be able to restore floodplains and reconnect a system that we've highly altered, this challenge of the Federal Government's role, regressing and retreating is going to be significant. And the 38 positions will help to make sure that we don't actually regress on these huge goals that we have, but we actually continue to expand the amount of wetlands we have and protect those that are already in place.

Just quickly, the Supreme Court decision was really based off of the nexus of what are a lot of features in the west, wetlands, intermittent streams, rivers that don't flow all times of the year. And so we're not alone in the state, but at least with Porter-Cologne, and with authorities and regulatory programs in place, we can at least try to expand, to fill what is, again, a harm to overall the state's goals when we look at the expansion of wetlands and not a retreat from it.

Next? Anybody else? Go ahead, LAO.

Okay. Sonia Petek with the LAO again. We found the Administration's or the Water Board's proposal to be well reasoned. It makes a lot of sense. This is going to be a very important role for the state to play as the scope of the federal responsibilities wane.

The couple issues that we would raise for your consideration is one, is it perhaps premature to approve ongoing funding and position authority when there are still so many unknowns about the full impact that this decision is going to have on waterboard workload.

And in addition, the Administration has identified a number of sort of weaknesses in current state statute when it comes to trying to apply state processes to things that were formally done under federal jurisdiction.

And so one of the issues, so I just actually wanted to give an example. The Administration noted that state enforcement options are more reactive than federal options, which also allow for some proactive options. In addition, state penalty amounts are lower than federal penalty amounts.

The Water Board indicates that it will be reviewing state statute to better understand what changes might be needed. But we don't know yet sort of how that will happen and how they'll come forward with any suggestions.

And so consequently, we're wondering if the current proposal for ongoing funding and positions might not accurately reflect the Water Board's increased workload once state policies are sort of better aligned with the program needs. So what we would recommend the Legislature consider, it could, if it wanted, potentially scale back the current proposal.

For example, it could provide just the first year of funding and positions, and then require the Water Board to come back next January, provide an update on sort of what it's learned, and ask for additional positions at that time. The Legislature could also provide limited term funding for a number of years until we know more about the full impact.

But regardless of whether the Legislature approves the proposal as written, or if it approves sort of a modified version of that, we would recommend that the Legislature require the Administration to come back next January and potentially even in subsequent years to talk about what it's learned since the US Supreme Court decision happened in May 2023. So it'll be important to sort of learn more about the impacts since that time.

And then we also think that that reporting could include preliminary suggestions for how statute could be changed. And this information would obviously be helpful to the Legislature to understand what level of resources are needed by the Water Board on an ongoing basis.

And then we'd note just a minor part of the proposal is a 1.1 million request for planning and design of an IT system that would replace a largely paper based process. And we think that request is well justified and would recommend approving that component.

Thank you. If I may respond, I share and agree that there is uncertainty as to how we will fully respond to this retraction of federal jurisdiction. But importantly, I think the Supreme Court decision meant pencils down right away for the army corps and for federal agencies.

So the hole, if you will, that that decision has left is already with us. And my concern is if we delay what I know we took here, not an expansive view of what the resources we might need are.

And importantly, there are ways that we've so relied on the federal program and the efficiencies there that we just haven't used. Porter-Cologne and our authorities waste discharge requirements as they're known to be able to do this work. So there is more that we'll need to discuss. But this request is a conservative request based off of just what we know the Federal Government was doing around wetlands delineation.

And importantly, my concern is if we delay any resources coming to us, it starts to push us even further out from being able to respond to what is already immediate impact from this incredibly regrettable Supreme Court decision that flies in the face of science and pulls us back. Unfortunately, I don't know if, Karen, you would like to add anything on just what we're seeing already and why it gives us comfort in our request.

Yeah. Thank you. Karen Mogus, State Water Board. I'll add to Joaquin's comments regarding the proposal that we have before you. Our estimates when we wrote the BCP back in the fall were that of the average 1500 projects applications that we receive every year, up to 65% of those will now be only under state jurisdiction. We estimated the resource needs to cover 25% increase.

So, yes, there is a lot of uncertainty, but we think we're pretty conservative in our request for resources, and it could be much more need. And I anticipate that we'll come back with more requests in the future as we understand the impacts of this decision more fully.

I will also say that we're already seeing impacts in terms of applicants citing the Sackett decision as a reason not to apply for permits for projects that are going to impact waters.

And so that makes it all the more important for us to have the boots on the ground, doing inspections, doing the policing of our watersheds so that we can identify where these projects are happening and protect the waters. That's what I'll add.

Thank you. For those that are perhaps listening, I may bear reminding that just because a Supreme Court decision reduced the federal jurisdiction, it did not reduce the state's jurisdiction. And we're still here.

Great. All right, thank you. Anybody else?

I would just note quickly that we did review the resource level for the Water Board, and we also agree that this is a modest request given the federal change.

And I appreciate the LAO's comments about getting a report back next year in terms of where we are and how these positions are going. But what will you do to cover the cost of these positions? Is there going to be a fee increase and how much and what fee?

It will be a fee would look to my colleagues, Karen, who has probably better familiarity, but I think the estimate was if it were applied generally to the Water Quality Fund, it was like a 34% increase.

But I think importantly, it is not going to be generally applied to everyone within the water quality programs. It will be a subset of them, and Karen can probably provide better detail there.

Sure. To clarify, if we apply the fee increase to the entire Waste Discharge Permit Fund, which is the fund that will see the increase, it would be a 5% increase for the fund overall, but for applicants within this particular program, the 401 Water Quality Certification program, the increase will be on the order of 34% to cover the cost of this request.

Could you say it would be how much?

34% increase.

Got it. Thank you. All right. And fixed term versus temporary. You've responded already. You just feel there's plenty of work to do.

Right. All right. Okay. Turn to staff. Anything that staff wants to make sure gets handled. All right, set there. Thank you very much. I think we're set there. We're going to open this up to public comment now. 1 minute for public comment.

Yeah. Yes. And just candidly, the challenge sometimes with limited term is being able to get folks into the roles. It really is hard.

Thank you for your time, Chair.

Thank you very much. Appreciate it.

Members Oracio Gonzalez, on behalf of the Salton Sea Authority, we are a joint powers authority consisting of the Coachella Valley Water District, the Imperial Irrigation District, the County of Riverside, the County of Imperial, and the Torres Martinez Desert Kuia, a tribal people that have inhabited the Salton Sea region since before California was a state or the United States was a country. We are in strong support of the governor's proposed investment.

These dollars will not only help scale implementation of the SSMP, but they will also provide desperately needed resources for ONM of projects so that once they are completed, they can be maintained in perpetuity. This is going to be an up to $60 million a year expense according to the state's own investments once the 10 year plan is realized. So we are certainly grateful for this initial investment now.

We would also be remiss if we didn't point out that the proposed investment also includes $3 million for the Army Corps Salton Sea Imperial Streams Feasibility study, which is a long range planning effort that's going to identify projects for the long term restoration of the sea that will be eligible for 65% federal funding, a potential huge savings for the state. Thank you. Please.

Thank you.

Good afternoon, maybe Chair Bennett and staff. Isabella González Potter with the Nature Conservancy here today on a couple of different items. First, starting on issue 10, we appreciate the staff recommendation, as was just being discussed, to approve the Water Board's BCP for two permanent positions to support establishing and implementing long term instream flow objectives in the Scat and Shasta River watersheds.

We also urge the Legislature to approve the Water Board's BCP for ongoing funding and permanent positions to connect essential water quality permitting and enforcement work that will fall to the state due to the US Supreme Court's Sackett decision.

Additionally, we urge the Legislature to reject the LAO's proposal to revert unspent funding from the WCB's streamflow enhancement program, which supports critical habitat restoration and streamflow projects.

And then finally, just given the sizable budget deficit, we continue to urge the Legislature to pass a strong climate bond and look forward to working with you and the other members on that. Thank you.

Thank you.

Good afternoon. Chair Bennett and staff. Alex Leumer, President of the board of directors for the Environmental Law foundation and speaking today on behalf of the Karuk tribe in support of the State Water Board's budget change proposal for ongoing funding for permanent positions to support reestablishing or establishing and implementing long term in stream flow objectives for the Scott and Shasta River watersheds.

The Karuk tribe has worked tirelessly for many years to restore and protect water quality and quantity in the Klamath Basin.

In 2021, the tribe filed a formal petition to the Water Board requesting that it use its emergency powers to curtail water use in the Scott Shasta rivers, prevent the extinction of the federally listed Coho and Chinook salmon, which they still harvest for substance purposes. The Water Board acted on the petition created a minimum in stream flow requirement that varies by month.

When the river flows are below these minimums, the board can curtail water rights holders to protect the flows, the fish and the people that depend on these flows. In 2022, the board did issue curtailment orders to water rights holders from both basins. However, the authority to issue such curtailments are related to the emergency drought declaration that we expect to expire this year.

Thank you very much.

Good afternoon, Mr. Chair. I'm Erin Evans on behalf of the Santa Clara Valley Water District, also known as Valley Water, here to highlight two important issues. On the coastal resiliency package, The South San Francisco Bay Shoreline project is one of the projects funded and this is a three phase project, only partially state funded and is currently challenged with funding shortfalls.

So this life safety project protects the regional wastewater treatment plant for 1.5 million people, a disadvantaged community of Alviso, the communities of Palo Alto, Mountain View, critical infrastructure, job creating businesses, NASA's Ames laboratory and major highways.

So we wanted to point out that the coastal resiliency program protects much more than just coastal homes, and for that reason urge maintaining this program. Secondly, regarding the dam safety program, we urge you to reject or reduce the Administration's proposed costs.

The Governor is proposing reducing this program by $50 million, as you heard, leaving 50 million additional program, additional funds. We strongly urge you to maintain those funds. The Anderson Dam Seismic Retrofit Safety project is critical to life safety and to the water supply of the entire Silicon Valley region. The state's contribution to this $2.3 billion project.

Thank you very much.

Thank you.

Good afternoon. Chair Bennett. Alfredo Medina here on behalf of the Imperial Irrigation District, to strongly support the governor's $65.2 million included in the Governor's Budget proposal and to urge that the Assembly adopt that as part of the priorities leading up to the final negotiations. Thank you.

Thank you. Appreciate you being brief.

Good morning, Mr. Chair. Beth Olaso, on behalf of WateReuse California, here to talk about the reversion of the water recycling funding. I think it's one of the only programs that is going to be taking funds away that have already been committed to projects, including one in your district.

We find that really concerning, that the funds have already been committed and were committed at the end of last year, and they're getting taken away. We're proposing to only put back enough money to cover those projects.

Obviously, we would like a lot more, but we understand the budget situation. We really do think that the projects that had already planned to go forward and we're moving towards construction and now we're getting $10 million taken away is a poor look on the state. So really urge your support of including about $115 million for water recycling back to the state board. Thank you very much.

Thank you.

Hello. Pilar Oñate Quintana here, both for Irvine Ranch Water District and Yuba Water Agency. For purposes of Irvine Ranch, I would like to second what was just said by water reeves, for purposes of both Irvine Ranch and Yuba Water Agency, we are part of the dam Safety funding Coalition.

We would urge you to either reject or minimize any cuts to the dam safety program for this year and then reject the option of reverting the funds from last year. This is a critical program.

Throw a couple relevant tidbits at you. Just for your information. The median age of a dam in California is over 70 years old. You can imagine that many of them are ill equipped to deal with the extremes of climate change.

Also, this is not just an issue of safety, it's also an issue of supply, because California has many significant dams throughout the state that are restricted in their capacity, and there have been pretty significant lost opportunities for storage in these recent wet years when you've got dams that can't be utilized to their fullest capacity. And just know if you'd like a fun, relevant read on the topic. This has actually gotten national attention.

Last year, the New York Times magazine put out an article, very lengthy, very informative, the trillion dollar question, what will happen when California dams fail? So again, we urge any minimization of reductions to this program.

Thank you.

Good afternoon. Robert Gore from the Gualco Group on behalf of SAFCA, the Sacramento Area Flood Control Agency, and Kings River, we support the legislative analysts high bar on dam funding and also ask you to reconsider again the Paterno decision, which informs liability and has billions in costs for any sort of levy or dam failure. That's issues 4a and 4b, issues 4d and 5.

On behalf of Kings River, Modesto Irrigation, Kern County Water Authority, and the California Association of Wine Grade Growers, we endorse the LAO's recommendation that the Sackett BCP at best only be partially funded on both BCPs. The ratepayers shouldn't carry the full boat. And sure, you're well familiar with this sort of issue.

There is a General Fund component in this that should be considered. And with all due respect to the budget condition, perhaps the Water Board can reprioritize. We have three workshops- Thank you.

Thank you.

Good afternoon, Chairman Bennett. Paul Mason with Pacific Forest Trust. I want to speak to the watershed resilience portion of the reductions in that drought package, the watershed restoration pieces at Department of Water Resources and the Wildlife Conservation Board. That's more than half of the reductions in that whole package, $440 million. And I find it really unfortunate.

Obviously, there's a lot of unfortunate choices to be made, but ensuring that our watersheds are in the best possible condition to deal with the water whiplash that we're increasingly looking at. I mean, just this year, look at how Southern California has been whooped by giant storms and making sure that those are literally the funds that are being cut, that would be making those watersheds better prepared to deal with those sort of extreme events. Same with the Sierra cascade portion.

There's several $100 million cut from there as well. And the planning programs over at Department of Water Resources. So these are the programs that help us get ready for the impacts. They're going to hit us regardless of whether we reduce emissions. These impacts are coming and that's where we should be spending to make sure we're actually ready for those impacts.

So we urge you to both reconsider those cuts and look to funding those through a climate bond to the extent that we're not able to fully restore those cuts in the budget. Thank you.

Thank you. I can't see that.

Good afternoon. Kim Delfino, representing the power Nature Coalition as well as Defenders of Wildlife, California Native Plant Society, Sonoma Land Trust, Mojave Desert Land Trust in Audubon California. We would just like to highlight the conversation that happened with Assemblymember Connolly about how do we ensure long term funding for our climate goals.

And frankly, the climate bond is probably the only way we're going to be able to do that. We would encourage the Assembly to try to prioritize that. Turning to issue three, on behalf of Audubon California, we strongly support the Salton Sea BCP. We would encourage that the funding be longer than one year.

And actually that's for issue five. The importance of continuing to fund at the full amount is important as a statewide issue because of the commitments we've made on the Colorado River. It is also important to secure the full amount of the federal money that were promised if the state were to deliver its full amount of its commitments.

On issue five, on behalf of Audubon and Defenders of Wildlife, we would support the Sackett decision and the funding there and encourage a long term money beyond three years so you can actually hire people. Thank you.

Thank you.

Good afternoon, Mr. Chair. Adam Quinonez, on behalf of the Association of California Water Agencies, just want to quickly reiterate what we stated in our letter. Certainly recognize the budget deficit that's facing the state, but would just urge the Legislature and Administration to consider maintaining as much water infrastructure funding as possible.

Specifically the recycled water funding, dam safety funding, PFAS remediation funding and the watershed resilience funding, particularly where, as was stated previously, where funding has already been committed or is out for solicitation currently.

And then to add to that, we strongly support a climate resilience bond for the November ballot with a focus on water infrastructure. As you are very aware, the need that is remaining for issues like groundwater recharge and recycled water dam safety is still immense.

And so we look forward to working with the Legislature and Administration to get a bond on the ballot in November and get it passed. Thank you.

Thank you.

Thank you. Dennis O'Connor with the Mono Lake Committee regarding item number five, we fully support the governor's BCP and would recommend you not following the LAO's suggestion, to perhaps reduce the funding. And we have no opinion on the LAO's other two recommendations on that item. Thank you.

Thank you.

Good afternoon. I'm Phoebe Seaton with Leadership Council for Justice and Accountability. First off, we appreciate the governor's proposal to restore $200 million for drinking water and wastewater infrastructure funding. The majority of that money would go to address severe and pervasive sanitation issues in disadvantaged communities, and we can't support, there aren't words strong enough to reinforce how much we support that.

We also support investments in the Salton Sea and the Salton Sea region to address the resilience not just of the sea, but of the public health of the communities surrounding the sea. And finally, we align with over 150 organizations, environmental justice, environmental organizations, that have put forward a budget proposal on a bond which is critical to addressing both environmental justice resilience needs in our state. Thank you.

Thank you.

Good afternoon. Erin Woolley, on behalf of Sierra Club California in support of the State Water Board's request for additional funding to support capacity related to the recent Supreme Court decision, and also in support of the proposal to restore critically needed funding for the Salton Management program.

That funding is essential to help the state deliver on both the goals and the obligations to conduct habitat and dust suppression activities at the Salton Sea by 2028 and, as the prior commenter noted, to address the urgent public health crisis in the region. Thank you.

Thank you.

Good afternoon. Chair Bennett. McKenna Jenkins with NextGen California. We respectfully ask that you reject the proposed cuts to the active transportation program and to Fund this vital, oversubscribed and highly cost effective program out of the State Highway Fund or other well funded, flexible transportation funding sources. The climate crisis is accelerating, causing deadlier and costlier disasters every year and in tight budget years.

It's more important than ever that California budget proactively for resilience and demonstrate that creative leadership on climate is not a luxury that we only pursue when there's a large surplus.

The active transportation program and other vital transportation equity programs should be last in line for cuts, especially because there's ample funding that exists at the transportation agencies and also thanks to the bipartisan infrastructure law. NextGen California. Thanks for your consideration of this request.

Thank you.

Good afternoon. Chair Bennett. Cody Phillips with California Coastkeeper Alliance wanted to speak in support of the Sackett BCP. This is many discharges since that decision came down and have all decided that they no longer discharge to a lotus.

And for this waterboard, they now have to decide for the ones that are correct. That's a lot of work. And for the ones that are incorrect, that's also a lot of work.

This is an important thing to make sure our water quality is protected for the long term protections in the Scott and the Shasta. This is incredibly important as well. California has been moving toward proactive management of its water supplies in so many different areas.

But this, in this we still do reactive emergency regulations that expire year after year. It's important to start doing more proactive management in these important watersheds. Thank you.

Thank you.

Good afternoon. Chair Bennett. Mark Fenstermaker here for the Coachella Valley Conservation Commission.

On item three, we are in strong support of the governor's proposal for funding to the Salton Sea. The CBCC was formed to implement the Coachella Valley Multiple Species Habitat Conservation Plan, which is a shared regional vision for balanced growth to conserve Coachella Valley's natural resources while also building a strong economy vital to the future. And for the reason stated earlier, the balance of natural resource and environmental health coupled with community health. We really think this funding is necessary to make sure we stay on track with our obligations for the Salton Sea. Thank you.

Good afternoon, Chair. Melissa Sparks-Kranz with the League of California Cities here today just to recognize the challenging situation that the Administration and the Legislature are in with a budget deficit. But we're here today to more generally make a comment regarding the climate bond, which was a question that was asked today earlier in the discussion. We do urge the Legislature to continue the discussions on a climate bond for cities.

We support a comprehensive bond that supports climate investments in organic waste diversion to reduce methane emissions, water conservation, recycling, above and below ground storage and energy efficiency, infrastructure retrofits and clean fleet. Thank you so much for the opportunity to comment.

Mr. Chair. Members of the Committee, Louie Brown here today on behalf of a variety of ag organizations. One of the issues that have been somewhat left off the table and when we think about climate smart funding for agriculture is the farmer program.

Since that money has been in place, we've replaced over 12,000 pieces of equipment that significantly improve air quality, reduce greenhouse gas emissions and other toxic air contaminants. We're also very much in support of the interrog emission funding that was left in the budget.

Would like to see that restored. We think that is the most efficient way for us to accomplish our SB 1383 goals in reducing methane from the dairy industry. And then finally, I'd just like to say the USDA census data just came out.

For the years 2017 to 2022, California has lost 7000 farms. No doubt some of this is related to commodity prices, but also a significant factor in that are the regulatory costs in the State of California. That brings us to opposing any increases in fees that are going to be brought forward this year. Thank you.

Thank you.

Good afternoon, Chair Bennett. I'm Annalie Cervaro with California Trout and on behalf of Trout Limited and EDF. We are in strong support of the SAC at BCP as groups that do a lot of on the ground work. It is absolutely critical that we have the staff in place to run these permitting processes in a timely manner. And I think the Water Board really needs the help.

Additionally, on behalf of Cal Trout and Trout Unlimited, I'd like to offer strong support on the Gualala TMDL BCP, which is required for the state settlement agreement to address the significant sediment impairment issues in this important watershed. Thank you so much.

Good afternoon, Chair Bennett. I'm Natalie Brown with Planning and Conservation League, urging your support of the waterboard's budget chain proposals related to the Sackett Supreme Court decision and the Scott and Shasta in stream flows.

I'm also voicing support on behalf of Friends of the River, the Environmental Protection Information center, and the Committee to complete the refuge. And I also wanted to echo previous support for robust and equitable climate bond in light of the significant budget cuts being proposed this year. Thank you so much.

Good morning, Assemblymember Bennett. This is Kam Bezdeck with California Trout, and I'm here to state our strong support for the Scott and Shasta BCP, as well as support on behalf of Trout Unlimited and the California Support Fishing Protection alliance. Thank you so much.

Thank you.

Good afternoon, Assembly Member Michael Jared, on behalf of the Community Alliance of Family Farmers, the California Institute for Biodiversity and Climate Resolve, joining with the other over 150 groups asking for a climate bond put on the November ballot. We think it'll help create dedicated long term funding that can be used effectively. Thanks.

Thank you. It there are no other speakers. We will adjourn this meeting.