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

Good morning, and I think we got a problem. That should--shouldn't that be up?

If the yellow is light is on, no one's mics are on, so if you want to talk, you have to turn that light off.

Now their mics are on. And I'm on too, right? Let's try it again. Is it okay? Okay. Still sounded odd to me, but, hey, good morning. Welcome to Assembly Budget Sub Four. Today's our first of two hearings on the May Revise.

We'll provide a high-level overview of the major proposals of the May Revision. We're, we have a hard stop at 12:30 today, so we hope to be able to accommodate all the public comment, but we may not be able to do that by 12:30. Next week is--on the 20th, Tuesday, the subcommittee and the public will have more time to provide comments and ask questions of the departments at our hearing that starts at 9:30. The purpose of today's hearing is to let the public and members hear about what's in the May Revise from the administration.

Department of Finance will be our main witness today and all of our departments and agency experts will be here on Tuesday to answer in-depth questions. Additionally on Tuesday, we'll have an analysis and a presentation from the LAO's office. Let's get started, and before we begin, do we have any members that have any very short introductory comments or questions? All right, great. We're on Department of Finance.

Good morning.

Good news.

Good morning. Andrew March with the Department of Finance. I'm joined by my colleagues, Stephen Benson and Teresa Calvert who will continue--

Can you bring that microphone closer, please?

Yes. So we'll continue the presentation after I complete mine. So I'll provide a brief overview of the governor's May Revision and attempt to answer any questions that you may have, as the chair mentioned. However, departments are not with us today so we may not be able to answer in-depth questions but we will take them back and prepare departments to answer those questions.

So as the governor noted yesterday, the May Revision solves for a General Fund budget problem. So the proposals that are--that we will present to you today attempt to balance the budget and also reflect priorities from the administration.

So first off, we have several statutory changes for the Department of Water Resources. We have trailer bill language for the Delta Conveyance Project. The proposal will streamline several administrative processes that will save money and time on the implementation of this important water infrastructure project.

We have trailer bill language for the State Water Resources Control Board for water quality control planning. These statutory changes recognize the Water Board's actions to adopt or revise water quality control plans as actions by a regulatory agency to protect the environment and therefore falling within a categorical exemption from CEQA.

Third, we have--for the Air Resources Board--we have a refinement to a Governor's Budget proposal for regulatory fee authority. This proposal narrows the focus of the fee authority to the Transport Refrigeration Unit and commercial harbor craft regulations. Next, I'll go over several General Fund solutions in the environmental protection space.

For the Department of Toxic Substances Control, we--there's $75 million that's proposed to be reverted of 132 million General Fund that was appropriated in the 2021 Budget Act. This funding was appropriated for cleanup activities at the Exide facility in Vernon. So the proposal is to revert the $75 million, provide $35 million from the Lead-Acid Battery Cleanup Fund, and $40 million from the General Fund.

As a brief explanation on the Exide facility, because I think it's been a while since we visited this, the state has provided approximately $573 million General Fund to clean up over 3,000 residential properties within 1.7 miles of the former Exide lead-acid battery recycling facility in Vernon.

This was a facility that was operating under various permits and polluted the area around this, this resident--or this community. Second, we have, for the Department of Water Resources, trailer bill language that will reduce the frequency of when DWR is required to post a groundwater bulletin. Currently, the department is required to post this bulletin every ten years.

This change would make it to every five years, and with that we have assumed $750,000 General Fund annual savings. Now moving on to several other proposals that are notable within the Environmental Protection Agency. For CalEPA, the Office of the Secretary, the Air Resources Board, and the Water Resources Control Board, there is approximately $3 million from various special funds and 12 permanent positions to defend California's environmental laws and programs that advance the state's climate, water, public health, and overall environmental priorities in response to increased federal legal challenges.

For the Air Resources Board, $666,000 Greenhouse Gas Reduction Fund and three permanent positions to provide technical assistance to agencies that administer the California Climate Investments Program. For the State Water Resources Control Board, $2.7 million Safe Drinking Water Account and 12 permanent positions in 25-26 and ongoing for the Water Board to regulate public small water systems in Monterey County.

Again, for the State Water Resources Control Board, $23 million Petroleum Underground Storage Tank Financing Account, one-time in 25-26 for the Water Board to provide loans and grants for removing or replacing petroleum underground storage tanks.

This proposal also includes statutory changes to enable administrative efficiencies that allow tank owners to begin projects while they are waiting for a final funding agreement to be executed.

For the Department of Toxic Substances Control, $837,000 Hazardous Waste Control Account in 25-26 and ongoing, and 1.7 million Toxic Substances Control Account in 25-26, and 1.6 million in 26-27 and annually thereafter to support implementation of the exemption review and reporting penalty assessment processes required by newly adopted regulations as authorized by SB 156.

This was part of the effort several years ago to adjust--sort of assess what's happening with DTSC's fees and the under-collection and fees that were assumed as part of SB 158.

Next, for the Department of Toxic Substances Control as well, $2 million from the Hazardous Waste Control Account in 25-26 to fund legal service contracts for the Santa Susana Field Laboratory litigation. For CalRecycle, $45 million one-time, 15 million from the Used Oil Recycling Fund, 15 million from the Beverage Container Recycling Fund, and 15 million from the Electronic Waste Recovery and Recycling Account to continue the CalRecycle Integrated Information System IT Project.

Moving on to the Natural Resources Agency. For the Department of Water Resources, there's $100 million Federal Trust Fund Authority in 25-26, 60 million in 26-27, 12 million in 27-28, and six million in 28-29 for the Department of Water Resources to work on high priority projects in the Salton Sea. For the Department of Water Resources, $12.5 million General Fund in 25-26 for DWR to support urban flood risk reduction and--

I'm going to interrupt you, given that we have such a short period of time. You're reading everything, and what we've asked for you at this hearing is to just the big proposals, the, the controversial changes in GGRF Fund, all right?

Okay. Yes. Happy to, happy to skip over.

You've got to cut this all the way down. Everybody's got to cut it all the way down for everybody to have a chance to get a little bit, and then Tuesday we can go into much more detail, all right? So each one of you, please be as concise as possible.

All right. Moving on to Cap-and-Invest. So in April, the governor and legislative leaders announced their joint intention to extend the Cap-and-Trade program this year. The administration's top priority is to extend the program beyond its 2030 expiration date to provide market certainty in this challenging time.

The May Revision proposes a simple extension of the program to 2045, which aligns with California's carbon neutrality of reducing anthropogenic emissions to 85% below 1990 levels by 2045.

The proposed extension includes updated guiding principles and relabels the program to the Cap-and-Invest Program to reflect the upstream and downstream investment this program encourages through its market-based price on carbon emissions. The May Revision does not include a detailed spending plan for the, for GGRF.

Rather, it identifies two key priorities for the administration. With the remaining funding to be discussed between the administration, the Legislature, and interested stakeholders on shared priorities, we would also note that the May Revision does not include any changes to the continuous appropriations. There's no trailer bill that would change any of the continuous appropriations. We view it as part of the discussion that we'll be having with the Legislature as far as if that warrants any changes to the continuous appropriations.

Let me interrupt you right there because I think that's a fundamental point, but it's very obvious if the continuous appropriations to some extent are covered by partially what you're already asking for, so if you don't--there will have to be some change in continuous appropriations if the administration proposal goes forward. Is that correct?

Potentially, but we view it as part of the overall, the overall discussion that we'll be having with the Legislature. So as noted in the eight pages and by the governor, the administration's priorities are continued funding for the High-Speed Rail project of at least one billion annually and a General Fund solution to shift $1.5 billion from the General Fund to the Greenhouse Gas Reduction Fund to support fire prevention, fire control, and resource management operations costs at CAL FIRE in 25-26.

This grows to 1.9 billion in 29-30 and ongoing. This proposal includes a General Fund backstop to protect operations in the event Cap-and-Invest auction proceeds fall below projections. And with that, I'll turn it over to my colleagues to continue.

Thank you very much.

Okay. Stephen Benson with Department of Finance. I will limit my comments just talking a bit about Prop 4 with climate bond and what's changed since Governor's Budget. So really there's sort of three changes. There is a small handful of incremental adjustments that accelerate some funding for some projects, really five of those.

They include for the land use--Office of Land Use and Climate Innovation acceleration of technical assistance funding into 25-26, $500,000. We had mentioned at Governor's Budget that we'd come back with funding to implement the Salton Sea, so there's ten million dollars for that.

That's in the May Revision, phases in over several years, starting at 1.6 million in 25-26; various amounts into the out years to get that conservancy established. There's acceleration of $4 million for the Sacramento San Joaquin Delta Conservancy to help reduce the risk of climate change impacts on resources with some time-sensitive land acquisitions.

There is acceleration of funding for Department of Water Resources both related to stream gauges and tribal funding for underground storage, banking, and recharge. And then there's acceleration of funding for the Department of Community Services and Development related to Low-Income Weatherization Program for farmworker housing--and the Farmworker Housing Component.

The May Revision also includes 79 and a half permanent positions across 12 departments related to implementation of the bond. In a lot of ways there are existing staff that will be sort of shifting over part time on different things, and so that's a lot of it, but there are--with the amount of programs and funding that there is in here multi-year, there is a need for some permanent positions in number of departments. Happy to go into more detail later today or Tuesday or whenever you want to in terms of numbers by department, but that's across the bond for all the different departments.

This May Revision also includes--we'd mentioned it--Governor's Budget. We would include the statewide bond cost component. That's in here, includes about $2 million in 25-26, grows to about $4 million ongoing, and that's just for the departments that give the overall management, accounting, the auditing functions, all of that stuff that does the oversight and management of the bond and the reporting and things like that. So those are the main components of the climate bond. I will stop there and turn it over to Teresa.

Hi. Good morning. Teresa Calvert with Department of Finance. There are a number of proposals in the energy and transportation area that I represent for things that are not in the Cap-and-Invest proposal. I think I would highlight that the May Revision reflects updated revenues to the Motor Vehicle Account, and there are three funding proposals associated with the Motor Vehicle Account in the May Revision as well as additional statutory changes that would delay implementation of certain recently enacted legislation, very similar to our January 10 Governor's Budget approach to delay things while DMV works through the implementation of the DXP Project.

I would also note on the energy side there are two General Fund solutions that are in the energy area. One is related to the CPUC's Community Renewable Energy projects. The other one is a shift to the climate bond for funding related to offshore wind. There is also additional investments in the energy space, the notable one being one-time resources and special funds for the CPUC related to battery energy storage systems and facilities. So I'll leave it there. We do have colleagues here in the case of questions and a lot of detail can be found in our May Revision documents if we didn't cover it here today.

Great. Thank you very much. So I think the goal here is to try to get everything out on the table. We won't be able to have a robust conversation or even get necessarily answers to everything, so I'm going to ask some questions here so my colleagues know what I'm asking. I'm going to ask my colleagues to be able to ask questions also, only in a--oh, I thought LAO had no comments. Do--you do have comments?

I'll just note that--Rachel Ehlers with the LAO--that our team is busy diving into the details. We expect to have specific comments on these proposals for you at your hearing next Tuesday, and also just highlight that our office will put out our annual initial comments on the overall budget sometime within the next couple of days, if not tomorrow, then Saturday.

Great. Well, my apologies. I thought we encouraged you not to come because you had no comments and then--

You can't keep me out of here--

And then you insisted on being here, but anyway, thank you very much. I appreciate that. So only with a few of these will I really ask you--I'll specifically ask you to answer, but I want to get the questions out there so that they're out there for the public, for your agencies to be able to respond, etcetera.

So first of all, Cap-and-Trade, I'm concerned that you're proposing to cut over $1 billion from transit agencies that are struggling from money that was already committed to them. They've made plans, they've made commitments, etcetera.

That's different than, you know, cutting money for, you know, requests for new money that's coming from transit agencies, but cutting programs that we've already had. It could really eliminate and really discombobulate transportation services, particularly to low-income people, the riders who are dependent upon on that.

And then not only are you doing that, cutting the SB 125 funds, but you're not protecting the continuous appropriations that they were relying on that were in GGRF where those funds have already been committed. I mean, we've made some commitments. I think we've always had--my concern has been new requests from transit agencies, but this is, this is stuff that was committed to them. No need to respond to that right now but I want you to note that concern.

The proposal also defunds a commitment made to the Legislature to fund the clean energy part of extending Diablo Canyon Nuclear Power Plant, and so it fits a pattern of we usually reach a deal with the administration. The deal is that we're going to get something next year and then next year we don't get that thing, and it's--this pattern is--noting it is happening again.

Also alarmed and very alarmed that the Wildfire Prevention Fund is not a priority in--SB 901 and SB 155 statutorily committed 200 million, and this Revise does not have anything in there for the Wildfire Prevention Fund which--and in particular--with the far more, the greater focus of the Assembly and the Legislature overall in terms of home hardening and trying to deal with the tipping point that we've reached. If we don't decrease our home losses when wildfires hit, we will have an existential crisis here in California.

So that's one I want to speak strongly about is we need funding and we've already underinvested in wildfire prevention and home hardening and defensible space. We've underinvested in that and to take it out altogether, I think, is very concerning to me and would be unacceptable from my perspective of where the Legislator is and the Assembly. Proposal also eliminates funding for zero-emission vehicles when those are being attacked by the federal government.

Many of the programs in the four-year discretionary GGRF plan that you are now proposing to eliminate were previously appropriated and they were delayed because of deficits. Are--my question is, were any of these programs that were already awarded and committed a project, were any of these programs already awarded and committed to projects?

Did you, as the administration, commit to some projects and now you're pulling back, and if so, how much? Don't have to answer that right now but that would be a question. Are you pulling back money that was actually committed to particular projects? We'd like to know which ones.

The May Revise also signaled that you're not pushing to retain any of the continuous appropriations. You mentioned that you're kind of leaving it up. You haven't ended the continuous appropriations because they're statutory, but you haven't dealt with it also. So those those--and you want instead, 2.5 billion a year for CAL FIRE and High-Speed Rail, and so those appropriations were also continued into the future.

So can you tell us how much and which programs have future awards and how much money is at stake? In other words, take the continuous appropriations that we gave future awards to based on our belief that we were going to have those continuous appropriations and make sure you identify on Tuesday for us what it is, how much money is at stake out there from your perspective because we have a perspective on that, and I'm sure LAO will have a perspective on that also.

And then is the 1.5 billion fund shift from General Fund to CAL FIRE a static number, 1.5 billion, or do you anticipate that being specific operations budgets that may grow over time? CAL FIRE's budget traditionally grows over time. Are you anticipating CAL FIRE's going to grow or we're going to leave that at the 1.5 billion? It looks like you want to answer that.

Yeah, the May Revision includes 1.5 in 25-26 and it grows to 1.9 in 29-30.

Thank you.

So we do anticipate both.

So you're expecting to take more and more of the GGRF Fund. All right. And then explain how the General Fund backstop will work if the auction proceeds don't cover the amount needed for the fund shift. We don't know for sure what's going to happen with GGRF. So what's the General Fund backstop for CAL FIRE?

Yeah, there's provisional language in the new GGRF item that allows for Finance to reduce the GGRF appropriation and increase the General Fund appropriation by the same amount of the reduction if it's determined that auction proceeds are going to come in low.

All right, thank you. I want to make this point, and then I'm just about finished, and that is, I think philosophically, we should really think carefully about taking an essential government service like CAL FIRE.

I don't think anybody in the state today would say, 'oh, CAL FIRE is not an essential service of the State of California,' and not fund it from a far more permanent funding stream--which is General Fund--than funding it from what is, everybody recognizes, is a temporary funding stream that will eventually play out.

The whole goal of the GG--of Cap-and-Trade is to eventually not have any GGRF funding collected because we have made the transition. To fund an essential service, particularly an essential safety service, from a temporary fund rather than from a General Fund is a architectural decision the governor is making with this and I think it's one that we should look at very carefully and gives me great concern and I think should give lots of people real concern in California. Finally, High-Speed Rail.

We need to know how far--if we follow this proposal, we're basically going to have $20 billion that we can securitize. How far will $20 billion get us? What do we get for that is very important, and we have been waiting and waiting for the new High-Speed Rail update, but we need to have--make sure we don't have a train to nowhere, but instead we have an actual credible plan to do something. And then I will stop right there because there are a few other things but I want to make sure I have time for my colleagues. So why don't we start? Colleague, anybody ready? One, two, three, and four. Okay, great.

Thank you, and I recognize we are at a point where, you know, there's not a lot of time, so I'm going to try to do as the chair has demonstrated to do is ask a lot of questions, not expect you to answer them, but be ready to answer them at our hearing on Tuesday.

And I would like to align my comments with the chair as it relates to the 1.5 billion that is being allocated to CAL FIRE and expecting to expand to 1.9 and the fact that it is something that is a permanent draw on our General Fund--and should be because it's permanent services, it being temporary, especially at the expense of transportation funding.

Transportation, second to wildfire and emissions is the hardest area to decarbonize, right? It's the largest single source, but the hardest to decarbonize, and the whole point is to transition, which is why that--those investments there are, they're necessary.

So I would hope that when you do come back that you have a robust answer for that. As it relates to the portion in here for the delta conveyance tunnels, extremely concerned about that. Already, there was an opportunity two years ago where the administration chose to fast track and the Legislature rejected that proposal.

So I'm wondering, then why now? And I don't buy into that, you know, the whole--I think there was a comment in the press conference about having to complete big things. We need to complete big things, but we've said no, not fast track. This should be done in a very balanced, policy-oriented way.

This, if it was to go through the normal legislative process, would probably appear in the four to five committees. So I'm trying to find the reasoning why putting it in the budget proposal, especially a budget that talks about major deficits, partially related to decreased--the lack of revenues, right?

Our expenditures are outpacing revenues and we're doing extreme cuts to the most vulnerable people in California and yet we are putting in this, this delta conveyance proposal in the bill--I mean in your trailer bill--and it's massive. When I look at this--and I'm looking at some notes here--it says that you're about to give a blank check because there's no cost savings put in. It's giving a blank check to a public agency that we know will be for at least $20 billion up to $100 billion. And so I'm wondering how that is included, how you are proposing to put that in the budget.

Also, as it relates to language around bond authorization, it's my understanding that the DWR was sued and lost in court over the department efforts to issue debt to pay for tunnel-related work. So this seems like language just to overturn the court's decision.

And so if you do--are successful and the Legislature gives you that opportunity, then how much debt will DRW issue? Do we know? We struggled with doing a climate bond and an education bond of 20 billion total in this last legislative cycle. We are working on a housing bond which the governor supports, and then we're just giving the authority, without the legislative approval at all involved, authority to a department agency to issue bonds at whatever amount when we just are now struggling and heard clearly from the governor when we were working on the last bonds concerned about the debt service related to it.

And so if we don't have debt service to do important things like climate, how are we just giving an agency the ability to do unlimited debt service as it relates to this delta conveyance? And let's see, what else? There's quite a bit and I know we're running out of time. You should have a timer so I know in my head.

In my head I'm thinking talk quick, but I mean, here it is, is our concern, and what I'll do, I'll follow up with these in writing because I have more and I want to give an opportunity for the rest to do, but it is just very concerning that while we're working on a budget proposal that has just the largest cuts that hits our most vulnerable, that you all are doing--asking for a department, a public agency to be able to have this ability to run up more debt, to have an unlimited set of costs on something that is not popular in the community, that is something that is very concerning to our delta community, the entire environmental ecosystem, and so I think that you have to be very robust in what you're going to provide to us to make the case to why this should be prioritized over people eating, over people having housing, over people having healthcare. Thank you.

Chair, if I may? Just one point of clarification?

Very quickly.

On the bonding authority, so the bonding authority is not a General Obligation bond so it's different than the bonds that the state has issued for housing or for, for previously for housing.

This is a bond that is done so on behalf of the State Water Project and it's a revenue bond that DWR would do on behalf of the State Water Project, so the General Obligation, it's not, it's not a one-for-one using this bonding authority instead of General Obligation bonds.

Thank you. Assembly Member.

All right, thank you, Mr. Chair. A couple questions, most of them focused on the Cap-and-Invest proposal. The first I think is more about process and then a couple around policy, but I think my first question is whether and why it's appropriate to have the Cap-and-Invest proposal included as part of the budget at all.

This is probably the most challenging budget situation the State of California has faced in at least the last 17 years. We are going to be grappling with some very, very tough choices, very tough decisions.

Trying to then layer in and shoehorn in the reauthorization of our landmark climate Cap-and-Trade, Cap-and-Invest program seems kind of insane to me, so I think it's appropriate to decouple those conversations, understanding you're trying to use some of it for backfill, so perhaps that's literally the explanation.

On some policy questions, again, aligning my comments with the chair as it relates to the proposal around CAL FIRE, I think that if we're trying to solve a temporary budget problem, let's have a conversation about a temporary solution. Let's not pretend that funding CAL FIRE is a polluter pay solution is what I would say.

And then as it relates to High-Speed Rail, also aligning my comments with the chair, and I think we've said this time and again in this hearing, all of us support rail. Many of us support the High-Speed Rail Project, but before we authorize additional billions of dollars in investment, we need to see both the comprehensive project review that we've been promised as well as the plan to move this project forward and ensure that it's a success.

All of us need to go home to our constituents and be able to tell them that we are investing in something that is going to deliver. So I don't think you are going to get--on the subject of blank checks, the Legislature just writing you a blank check because High-Speed Rail tells us, 'don't worry. Trust us. This time it's different.' So that is a very necessary condition of I think any commitment to High-Speed Rail that's included as part of this budget.

Let's see, what is the other piece? I think those are my points on Cap-and-Trade. The last, completely unrelated to Cap-and-Trade is related to the DMV. I just want to flag there's some trailer bill language related to ignition interlock devices. The proposal in the trailer bill language would extend California's pilot program.

I think that we have an opportunity to make that program permanent, we have an opportunity to extend that program to an all-offender program, and in doing so, we actually have an opportunity to draw down between two to three million dollars of federal funding on an annual basis. So that's another thing that we'd like to follow up and explore further. That's it for me. Thank you, Mr. Chair.

Appreciate both of you being concise, and I know we're all talking like Hubert Humphrey, real fast. Assembly Member Connolly.

I will do the same. Thank you, chair, and really, we'll also take the approach right now, just flagging some issues, raising some questions. Looking forward to the Tuesday session as well.

Starting, Chair, I will also align myself with your comments around the $1.5 billion CAL FIRE shift, beginning with just the architecture of what we're talking about here given the nature of GGRF funding. Is that the right way to go? Specifically, we had a pretty detailed hearing a few weeks back on existing GGRF funding around wildfire prevention programs.

I think it was about $200 to $300 million. One question--and whether you can maybe answer it now or just tee it up, how does that interrelate with this new $1.5 billion proposal? In other words, does that focus that was previously in the GGRF funding, is that subsumed within the 1.5? Is a 1.5 on top of that? What is the interaction of those two?

It's on top of. The 200 million is one of the continuous appropriation things that is left in place with our proposal and then the 1.5 is on top of that.

Okay. So and that would be going forward. Okay, we're going to have more discussion on that. I would like to associate myself with serious questions around the Delta Project Proposal. That is of concern to me as well, just how that is expected to play out.

We will be asking tough questions on that, including how much is that project expected to cost? So a deeper dive on that as well. A couple other things to tee up. We note that the governor is proposing an extension for the California Climate Credit. That is, of course, intended to reduce--help reduce utility bills.

That's something that's a focus of many of ours. How much savings can Californians expect on their utility bill as a result of this extension? And then finally, looking to have clarification if the Healthy and Resilient Forest Activities Program, Safe and Affordable Drinking Water Program, State Responsibility Area fee backfill, and the Affordable Housing and Sustainable Communities Program were cut as a part of the Cap-and-Trade Reauthorization Plan. Can you provide clarification on that?

So there are no changes to any of those programs contained in the May Revision. We intend to discuss those as part of our comprehensive Greenhouse Gas Reduction Fund Expenditure Plan that we'll develop with the Legislature.

Okay. Thank you.

Assembly Member Rogers.

Just in the spirit of brevity, I think my colleagues who've spoken so far speak exactly what I was thinking in a better way than I can, but really want to punctuate the points around Cap-and-Trade and the Delta Tunnel Project.

That was brief. Thank you. All right.

I'd like to just say just something really quickly.

Oh, I'm sorry. Assembly Member Lackey. You're--

I'm easy to be overlooked.

Welcome. We're glad you're here.

It's quite okay because I really don't have anything new, any new criticism. My colleagues have pretty much outlined some of the concerns that I, I feel very strongly about, but I, I think we need to rise above gimmick name changes when really there's no change to the process, what we're doing with this Cap-and-Trade, Cap-and-Invest, whatever you want to call it.

It's very, very difficult right now to justify what is being proposed, especially when we're cutting critical services like IHSS, people that are in conditions beyond their control and now we're limiting the ability to reimburse people who are giving them aid. Instead, we're going to continue to invest in a very embarrassing project, truthfully, one that I supported heartily when it first began.

But 15 years and what we have to show for it--and I mean no disrespect to labor because I know that there are some jobs that are being provided through this mechanism--but the return on what was promised is dismally disappointing, and especially when we have such a critical financial challenge right now and we're making choices between these very sensitive services and projects that have proven to be very embarrassing. I think we're void of logic. And that's all I have.

Thank you. Assembly Member Wilson has one other comment.

I promise that, chair, will be one sentence. Before I just poo poo over everything, I will say I appreciate one thing, and that is the--not just one thing--but one particular thing I want to call out is the $53 million injection of funds into the Motor Vehicle Account for the DXP Project. I think that's extremely important and holds up a lot of things that we try to do in transportation, and so appreciate that. Thank you.

Good. Since we got through all the other members' comments, I do have a few other things that I would like to point out. Before I get to those comments though, I want to deal with with what feels like fuzzy math from my perspective.

You want 2.5 growing to 2.9 billion more of GGRF funding and you say you haven't cut continuous appropriations, but the two don't add up. You know, we have less than $4 billion in GGRF. So you just, you either are cutting continuous appropriations or you're not, but if you--just to say you're doing both, which is what your answer was, we're doing 200 million as you answered Assembly Member Connolly on top of the 1.5 billion and the 1.5 billion is going to grow to 1.9 billion.

That math just does not total. Can you respond to that, please?

Yes. So the mayor vision includes the actual budget that's being proposed to the Legislature, only includes the CAL FIRE piece. So the shift of the $1.5 billion, there are no changes proposed to the continuous appropriations. It's the intent that we would like to see at least $1.0 billion provided to high speed rail.

And we intend to have that conversation with the Legislature in developing an overall framework for the greenhouse gas reduction funding. And we look forward to seeing what that looks like. But we don't have any proposed changes to the continuous appropriations in the mayor vision.

So in a sense, you're proposing more money than we're saying we have. And you're saying all of us have to. We have to. Let me phrase it this way.

By not by taking CAL FIRE out of the general fund budget, you then don't have to make any cuts in the general fund budget because you're shifting it over. You're solving a general fund problem by shifting it over to GGRF and you're saying, but we're not making any cuts in the GGRF funding. Right.

So to the continuous appropriations, I will acknowledge that the discretionary plan is not included in the mayor vision. So the funding from the discretionary plan is not included. But I think specifically to the continuous appropriations, which I think maybe there's been some confusion about, is there are no proposed changes to the continuous appropriations in the mayor vision.

And, and it's your contention that those two will.

The greenhouse gas reduction fund is balanced at may revision.

If with continuous appropriations. And the 2.5 billion for.

And the 1.5 billion. The mayor revision does not propose the $1 billion for high speed rail. It's our intent that the overall expenditure plan includes. Thank you very much.

Lao has a comment.

Just to provide some clarification, maybe in the January budget, the overall GGRF spending plan proposed by the Governor included about 2.9 billion from the continuous and statutory and 1.8 billion from the discretionary.

Right.

So one option would be to take the discretionary plan, which was mostly agreed to last year of that 1.8, swap it for this new CAL FIRE proposal, which would mean not funding the other parts of that agreed upon plan and leaving the continuous kind of as they are. That would be one option.

Thank you very much. Appreciate that. So I'll end. And then we will take. We'll take as much public comment as we can after that, but I'll end with these comments and questions. One, can you provide us an overview with the Salton Sea proposals in the May revise when you come back on Tuesday?

Two, how much savings did the Administration capture from cuts to the various CAL FIRE capital outlay proposals? Is it correct to say that these cuts are temporary and the Administration will request that these amounts be funded later? Are there exceptions to that where certain cuts are permanent? Are some of these capital cuts permanent?

Given that we're facing out year structural deficits, how will the Administration approach this issue beyond the budget this budget year? The other thing, what are the major changes related to the vacancy sweeps and efficiency cuts? What savings were achieved and where?

So we've been working on those efficiency cuts and appreciate the Administration and the Legislature working together on those. It looks like the savings you achieved were from special funds in many instances, not general fund, the environmental license plate fee, the waste discharge permit fund, etc.

Can you explain how these savings relieve pressure off the general fund, particularly fee revenue dedicated to specific purposes?

And then with the Delta conveyance, with the Delta conveyance issue, I'm going to email you a series of questions about Delta conveyance and we'll make sure that that email is available to the public in some way so that people know what these other questions are we have with, with this, I'm going to, with the number of people online, I'm going to reduce you down to 30 seconds.

So 30 seconds of everybody. And go.

All right, sir, chair and Members, Michael Pimtel here on behalf of the California Transit Association. It's been a lot of discussion about the zeroing out of investments from GGRF. I want to put this into perspective. For public transit.

We are talking about a reduction of up to $3 billion between now and fiscal year 28-29 of that total $2 billion have been committed to capital projects, to services that draw down significant resources, keep our systems afloat.

And folks, for any project in your districts that have benefited from TRCP Cycles 5 through 7, all of those money is at risk. Thank you.

Thank you very much.

Good afternoon, Mr. Chair. Members Karen Lange, on behalf of the Delta Counties Coalition, which is the five Delta counties that ring the Sacramento, San Joaquin Delta, in adamant opposition to to the proposal before you related to the tunnel. It's two separate trailer bills. There's a lot of reasons to dislike it for the budget reasons.

It's supposed to be related to the budget. The trailer bills before you related to the bonding authority. Yes, it's a revenue bond. But typically a revenue bond repayment structure doesn't start until after the project is completed. It's estimated to cost 15 years. Thank you very much.

Thank you.

Good afternoon. Kris Rosa, on behalf of the NRDC Action Fund, we asked the Committee to ensure that the Cap and Trade extension does three things. One, right sizes the program, addresses electricity affordability and three, reduces sources of criteria, air pollution and toxic exposures.

The extension of the program provides an opportunity to strengthen the state's leadership on health, climate inequity. We urge you to have careful consideration about the future of this program and not just extend it with a rubber stamp. The NRDC Action Fund look forward to working with you on this.

Thank you very much.

Hello, I'm Mariah Larson with the Golden State Salmon Association. I speak in opposition of the Delta conveyance project and the sabotage of the Bay Delta water quality plan.

Also on behalf of the Clean Water Action Organization, Saved California Salmon, California Water Impact Network Planning and Conservation League, T River Trust, California Native Plant Society, Louisiana Waterkeeper, California Sport Fishing Protection Alliance.

Thank you very much.

Hello. Cynthia Cortese, Policy program manager with Restore the Delta, in strong opposition of the May revision trailer bill proposal that seeks to fast track the Delta conveyance project and sabotaged the Bay Delta Water quality control plan through the state budget process, sharing strong opposition.

Also, on behalf of Wyndham and Winto Tribe, Shingle Springs, Band of Miwok Indians, Sierra Club, California Golden State Salmon Association, Friends of the River, Defenders of Wildlife, San Francisco BAKEEPER and Resources Renewal Institute. Thank you.

Thank you.

Mitch Steiger with CFT, a Union of Educators and classified professionals in strong opposition to the trailer bill with related to emergency reliability. The Bill is actually just going to eliminate the Cal SHAPPE program that funds badly needed H Vac and plumbing upgrades in public schools.

If this bill were to pass, it will give a one time refund of, between 8 and $20 to ratepayers. It will give kids asthma, it will. Give kids cancer and will force kids. To learn in classrooms that are over 90 degrees. We strongly urge your opposition.

Thank you.

Thank you, Mr. Chair. Mark Fenstermaker for the California Council of Land Trusts would agree and echo with a lot of the sentiments here with concern about the reduction in funding for wildfire prevention and would agree with your comments, Mr. Chair, that we have underfunded in this space. We need to be putting more into wildfire prevention.

It's obviously one of the most critical threats across the state and we think. More funding into nature based solutions across the landscape will help with that. Thank you. Thank you.

Good afternoon, Chair Members. Megan Cleveland with the Nature Conservancy would like to echo the comments of my colleague from CCLT and also just urge for funding for nature based solutions in the GGRF expenditure plan.

Thank you.

Mr. Chair. Brendan Orpickey on behalf of VIA Transportation in support of funding for CARB Sustainable Community Strategies Programs, Clean Mobility Options, Clean Mobility in Schools and Sustainable Transportation Equity Project. These help connect disadvantaged folks across California to vital services. Cleanse the air. Thank you. Thank you.

Alan Abbs with the Bay Area Air District. The fund shift shifts all money away from the AB617 program which gets emission reduction reductions at a cost effective rate and supports local businesses in our most disadvantaged and highly polluted areas in California. Also supports staff in the Bay Area of almost 40 people.

And so this is a program the Legislature passed with cap and trade 10 years ago and hope that the Legislature feels fit to keep supporting this program. Thanks. Thank you.

Natalie Spivak with Housing California. Still a bit unclear on how the continuous appropriations will be handled, but just really want to urge the maintenance of the continuous appropriation for the Affordable Housing and Sustainable Communities program. It's been incredibly successful in reducing greenhouse gas emissions and producing thousands of affordable units across the state.

Particularly with no other funding for housing and homelessness proposed in the Governor's budget, this ongoing source, the only significant ongoing source of funding for affordable housing production in the state needs to be maintained. Thank you.

Thank you.

Andrew Dawson, the California Housing Partnership. Last time we were here we talked about the GHG mission reduction program of the Affordable Housing Sustainable Communities Program and the variety of co benefits including climate, housing, transit, affordability and equity.

In a year where the speaker cited affordable housing as a top priority and the Governor zeroed out general fund support for affordable housing, it would be counterproductive to significantly reduce funding for the HSE program. Thank you.

Thank you.

Brendan Tuig on behalf of the California Air Pollution Control Officers Association. We're opposed to the cuts to the AB617 Community Air Protection Program. We think that you should actually be. Going the other direction on that and increasing funding because it's a cost effective program that protects vulnerable communities.

We welcome the discussion on continuous appropriation and overall in ggrf. We think you should be prioritizing these cost effective programs like the farmer program. So I appreciate it.

Thank you.

Mr. Chair. Members, Dan Shaw on behalf of the Port of Long Beach. While we are sensitive to the general fund condition, we are disappointed by the proposed $42 million cut and Prop 4 backfill for the Offshore Wind Port Infrastructure Planning Grants.

The Legislature approved these monies in 2022 and as you know, the voters intended Prop 4 to be additive. The further delay is concerning given the urgent need for the state to send the appropriate message to all stakeholders and especially investors in the private sector that the state is committed to developing this unparalleled and world class resource.

We continue to support the Governor's proposal to allocate 228 million to offset port infrastructure capital costs and request clarification about the eight year implementation. Thank you.

Good morning. Jordan Curley on behalf of American Clean Power just want to associate our comments along with the Port of Long beach and also just add that we are very heartened to see the continued support of offshore wind industry in California and thanks for the continued support of the infrastructure projects.

Thank you.

Gracia Castillo Cranks here on behalf of all Home California Housing Consortium and Enterprise Community Partners. Very concerned about the cuts to the Affordable Housing Sustainable Communities Program. When we worry about affordability, making sure that people remain housed, this is not the right investment.

This is the right investment at the right time and we worry about the consequences that the proposal will entail.

Thank you.

Good afternoon Chair Members. Ross Buckley on behalf of South Coast Air Quality Management District also stated both of my comments with my colleagues from CAPCOA and Bay Area AQMD. We've been very that we oppose the cuts to the AB617 program.

We've been very appreciative of the program funding that we've received the AB617 program through GGRF over the years for implementation incentives. The program provides target support for disproportionately impacted communities in terms of improving air quality and protecting public health. We request the continued prioritization of this program through funding through ongoing and continuous appropriation through the Capitrade Program.

Thank you.

Thank you.

Mr. Chair, members, we share questions that the Chair has posed regarding the downstream impact of some of these new off the top proposals relative to how much money would be there from annual auction proceeds for various programs including TIRCP LC Top ZEV funding in the multi year so especially of interest to the Port of LA and other clients of ours and also the impact on the DIVA program.

We think the agenda for today's hearing kind of outlines questions that we hope this group will continue to pose. And thank you very much.

May your name and organization please.

Thank you. I got time for that. Andrew Antwee on behalf of Shaw Yoder Antwih Schmelzer & Lange. I've raised points on behalf of LA Metro, the Port of Los Angeles and Advanced Energy United.

Thank you.

Asha Sharma on behalf of Leadership Council for Justice and Accountability. We also say share the same concern as the Chair that there will not be funding available for other GGRF priorities, particularly frontline community priorities like safer drinking water and equitable building decarb given the enormous appropriations in the may revise.

Additionally, we are also deeply concerned about the continued use of the budget process to make fundamental changes to CEQA through a process that does not allow adequate time for public input and participation. Thank you.

Thank you.

Good afternoon Chair and Members. Jeanne Wardwaller on behalf of transform, I want to echo several previous speakers about the concerns on affordable housing, sustainable communities and also echo Assembly Man Wilson's comments about the concern around the transportation program, specifically the two transit programs, but also the active transportation program.

We have real concerns about the lack of clarity and potentially moving away from the continuous appropriations. Transportation is critical. We also just want to encourage you to reject the strike reauthorization of cap and trade and look at reforms to that program. Thank you.

Thank you very much. It's 12:29 and our last this is great afternoon.

Mr. Chair Justin Fenzl on behalf of the Safe Roads Coalition. It's 61 member organization including Mothers Against Drunk Driving. Really appreciate your comments. Assembly Member Petrie Norris, Mr.

Lackey as well both of you have bills on this topic and agree we can improve and expand on this and draw down 2 to $3 million a year that we've been leaving on the table every year for DMV, the course and the community to work on making our roads safer through the utilization of ignition interlock. Thank you.

Thank you very much. We'll meet again at 9:30 on Tuesday morning. Appreciate the Administration being here and realize a very short not is for everybody. Thank you all very much. Have a great weekend. Meeting is adjourned.