Bad Budgeting and Broken Promises: Governor Newsom’s Solution to California’s Deficit? Take Money Away From Climate Vulnerable Communities

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Sona Mohnot, Elle Chen May 10, 2024

Here we go again. California lawmakers are poised to make communities of color pay the price for the state's historic, multi-billion dollar state budget deficit. This time with an early action budget bill, AB 106, potentially authorizing the state to take back money already promised to communities of color building climate resilience in their neighborhoods. AB 106 follows already deep cuts and delays to funding for key equity programs in Governor Newsom's budget proposals.

In response to Governor Newsom's budget cuts to essential climate equity programs, The Greenlining Institute, the Asian Pacific Environmental Network, and our partners from across the state have been working hard to restore funding for proven climate equity programs, Transformative Climate Communities and Community Resilience Centers. Due to decades of disinvestment and discrimination from policies like redlining, low-income communities of color today require multi-faceted infrastructure solutions that can promote climate, economic, health, cultural, and social well-being of the community. TCC and CRC are designed to do just that. Collectively, these programs fund holistic community-driven infrastructure projects that help build resilience to climate change including, community resilience centers, urban tree canopy, rooftop solar and storage, building retrofits and energy efficiency services, affordable housing, and more active transportation and public transit options. But with AB 106, funding through TCC and CRC is now at risk of being revoked to help balance the state's deficit.

The latest round of TCC awards were announced in December 2023, and the first round of CRC awards were announced mid-April 2024. The programs have widespread support and enormous demand from communities and advocates, and they are being replicated at the national level. However, the 2023 final budget and proposed budgets so far in 2024 eliminated all additional funding for the programs as a response to the growing state budget deficit. While we planned to focus our advocacy efforts on restoring funding, it is unfathomable that the Governor would consider clawing back the last remnants of money from equity programs like TCC and CRC that already announced awards.

"Community Resilience Centers are trusted neighborhood community spaces that provide year-around programs to disenfranchised communities and safe havens during extreme heat, wildfire smoke, power outages, and other emergencies. Our communities fought to fund this visionary infrastructure as they are some of the only facilities that cater working-class communities of color during converging climate, economic, and public health crises. The Governor's Administration's intent to rescind these investments only worsens the impacts of climate catastrophes on our most marginalized."

Elle Chen, Legislative Director at Asian Pacific Environmental Network

Yet, here we are.

To clarify, in mid-April, Governor Newsom and legislators passed AB 106 as part of an early action agreement that modifies previous budgets to stop any unspent funding from being used. This funding "freeze" applies to departments with one-time investments from the lastthree (2021-2023) state budgets. These departments were directed to immediately cease spending if certain criteria are met. One of the criteria for this funding freeze is if the department has funds that are "unallocated or maybe unencumbered from the appropriation."

If this sounds confusing to you, you're not alone. We spoke with a number of different state agencies to understand what types of funding and programs fall under "unallocated or unencumbered", and received different responses. Some shared that funding that's been awarded but not dispersed-which is the case for the last round of TCC and CRC funding-is not at risk, while others shared that unless a contract has been signed, all funding is at risk. Due to the large grant sizes, many TCC and CRC awardees are still negotiating their contracts. Thus, under this interpretation, they would be at risk of having their awards withdrawn.

While we are still working to understand with certainty which programs are at risk, you can imagine the significant impact of a potential funding freeze for our critical climate equity programs. Communities spent countless hours, energy and financial resources applying for the grants. Awardees for both programs are from low-income communities and communities of color who already face significant barriers to accessing state dollars. From San Diego to Pomona to Coachella and Stockton-rural, urban, and tribal communities from across the state applied for and were awarded TCC and CRC grants in the last six months with a complete understanding that this funding will be available to them.

"TCC Round 5 funding is exactly what California needs to drive the clean energy transition: community-driven, multi-benefit, integrated approaches that support our most vulnerable populations while cutting greenhouse gasses. It is essential that these awarded projects be allowed to move forward to realize this vision."

Laurel Rothschild, Vice President at The Energy Coalition; lead applicant for the TCC "Pomona ACTS" grant

It is unconscionable for the state to retract these investments especially from communities that have faced historic levels of disinvestment, exclusion from government assistance, and high levels of pollution and poverty. The Governor's Office already slashed almost or more than 50% of the budgets for both of these programs that advocates have been pushing to restore. To now hear that grant awards that were already publicly announced are at risk of being revoked is broken promises on top of broken promises.

"Little Manila Rising is in shock and in opposition of the potential action to take back awarded funding for critical climate resiliency and pollution projects from disinvested communities across CA. The Community Resiliency Center program is crucial to building local emergency preparedness networks and equipping residents with the training on how to weather through the more frequent climate disasters as well as creating community hubs in places where there are few community spaces. Taking away funding from historically disinvested and polluted communities is a huge blow for communities that already face trauma and distrust of public agencies."

Dillon Delvo, Executive Director of Little Manila Rising, lead applicant for Stockton's CRC grant, Development from Destruction: Creating South Stockton Community Resiliency

What can we do to prevent the potential freeze on funding for TCC and CRC communities? First and foremost, we need to sound the alarm about the State's approach to balance the budget by taking money away from critical equity programs that had already announced awards. The directive catalyzed widespread panic and confusion from state departments, policy advocates, nonprofits, and the Legislature. The Governor's Administration has not specified which and how many investments will be clawed back-even direct conversations with the Governor's Department of Finance have not led to any additional clarity. We want to make sure communities, local leaders and advocates fully understand what is being threatened-and hold the Governor and legislature accountable to funding commitments they made, and broke.

TAKE ACTION they need to hear from us:

1. Call the Governor, your legislators, Senate and Assembly leadership, and Senate and Assembly Budget Chairs - Urge them to say NO to any potential funding freezes for TCC and CRC. If you are a grant awardee, let them know and share the impact that the funding clawback can have on your community.
2. Call local city officials - If your community received a grant award, reach out to your city officials and city staff and let them know what is happening. Ask if they can help by calling legislators and the Governor's office to demand protection of funding for the TCC and CRC.
3. Communications / Social Media - Share concerns about the risk of a funding freeze for our climate equity programs through social media, blogs, op-eds, and your networks. You can use the following tags in your posts: @CAgovernor. #caleg, @scott_wiener, @AsmJesseGabriel, @ilike_mike.

The state's budget shortfall is largely due to Governor Newsom overpromising how much revenue California would have, and making multi-year commitments that he couldn't keep. Promising communities that there would be money in future years when in reality there isn't is not only reckless but fosters even more community distrust of government. Governor Newsom and members of the Legislature: when our budgetary outlook is bleak, our frontline communities are already the hardest hit. Don't let our communities fall through policy cracks yet again.

If you have questions or want to discuss other ways to show support for TCC and CRC, please contact Sona Mohnot ([email protected]) and Elle Chen ([email protected]).