$10 billion climate bond to be put before voters in November

California voters will decide in November whether they want the state to borrow $10 billion for climate and environmental projects — including some that were dropped from the budget because of an unprecedented deficit.

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

It was the last day lawmakers had to approve the climate bond proposal to put the measure on the Nov. 5 ballot.

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

“Ensuring our communities have the resources to protect themselves from wildfires, drought, and flooding is critical to the long-term success of the Golden State,” McGuire said in a press release Monday.

The bill’s language had been negotiated in secret for several months but didn’t become public until Saturday at 9:57 p.m.

California taxpayers would pay back the bonds with interest. An Assembly analyst estimated that the $10 billion bond would cost the state $650 million per year over the next 30 years, or more than $19 billion.

Scott Kaufman, legislative director for the Howard Jarvis Taxpayers Association, said the cost could be much higher if interest rates on the bonds exceed the 5% rate predicted by analysts.

“These bonds will be paid back decades later by people who did not even have a chance to vote for their approval,” Kaufman wrote to the bill’s author in a letter opposing the measure.

Earlier this year, Sacramento legislators proposed placing billions of dollars in bonds on the November ballot for a variety of efforts, such as preventing fentanyl overdoses and building affordable housing.

But those plans were dashed in March when a $6.4 billion bond measure promoted by Newsom to help the homeless and mentally ill was approved. 50.18% votes, This is not enough to get approval.

In a recent survey In a survey conducted by the Public Policy Institute of California, 64% of likely voters said it is “bad timing” for the state to issue bonds to pay for state projects and programs.

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

Lobbying intensifies after Newsom’s proposal $54 billion spent On climate efforts in 2022 but after that Cut that funding To bridge the recent huge budget deficit.

According to the bill, $3.8 billion would be allocated for water projects, including providing safe drinking water, recycling wastewater, storing groundwater, and controlling floods.

An additional $1.5 billion would go to wildfire protection, while $1.2 billion would go to protecting the coast from sea level rise.

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

The rule requires that at least 40% of the funds be spent on projects that benefit disadvantaged communities. Disadvantaged communities are defined as populations where the median household income is less than 80% of the area median or less than 80% of the statewide median.

Some legislators withdrew their support for the bonds, saying the provision had recently been weakened so more money could go to people who are not economically disadvantaged.

Rep. Jasmeet Bains (D-Delano) said before the Assembly vote that the definition of vulnerable populations had been watered down. “This is fundamentally unjust,” he said.

Hundreds of millions of dollars from the bond will benefit private industry. For example, it will provide $850 million for clean energy projects, including proposed offshore wind farms. These are the planned wind projects already benefited Exemption from subsidies in President Biden’s Inflation Reduction Act.

Governments often borrow long-term for infrastructure projects, which are expensive to build but last for decades. Yet some portion of the planned climate bond spending will go to operating programs that may end by the time the bonds are paid off. For example, a portion will go to “workforce development” or training workers.

And up to 7%, or $700 million, could be spent on administrative costs.

“We are already seeing the devastating impacts of climate change — more extreme heat waves, catastrophic fires and floods, coastal erosion, and severe droughts,” said Senator Ben Allen (D-Santa Monica) in a press release. “Every part of our state is affected, and unless we act now, the costs of addressing these impacts will continue to rise.”