A $10 billion climate bond will go before voters in November

California voters will decide in November whether they want the state to borrow $10 billion to fund climate and environmental projects, including some that were eliminated from the budget due to record deficits.

He 28-page bill The proposal to place the Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024 on the ballot passed the Senate and Assembly on Wednesday night.

This was the last day lawmakers had to approve the climate bond proposal so the measure could be included on the Nov. 5 ballot.

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

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

The bill's language had been negotiated in secret over the past several months, but was not made public until 9:57 p.m. Saturday.

California taxpayers would pay for the bond with interest. One Assembly analyst estimated the $10 billion bond would cost the state $650 million a year over the next 30 years, or more than $19 billion.

Scott Kaufman, legislative director for the Howard Jarvis Taxpayers Association, said the cost could be much higher if the interest rate on the bonds turns out to be higher than the 5% rate the analyst used.

“These bonds will be paid for decades from now by people who never even had a chance to vote on their authorization,” Kaufman wrote to the bill’s author in a letter opposing the measure.

Earlier this year, Sacramento lawmakers introduced proposals to place tens of billions of dollars in bonds on the November ballot for efforts as varied as stopping fentanyl overdoses and building affordable housing.

But those plans were dashed in March when a $6.4 billion bond measure pushed by Newsom to help the homeless and mentally ill passed. 50.18% of the votes, Barely enough to win approval.

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

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

Lobbying intensified after Newsom proposed Spending 54 billion dollars on climate efforts in 2022, but then Cut that funding to close recent massive budget deficits.

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

An additional $1.5 billion would be spent on wildfire protection, while $1.2 billion would go to protecting the coast from rising sea levels.

The rest of the money would be used to create parks, protect wildlife and habitats and address extreme heat events.

The language requires that at least 40% of the money go to projects that provide benefits to disadvantaged communities, defined as populations where the median household income is below 80% of the area median or below 80% of the state median.

Some lawmakers withdrew their support for the bonus, saying the provision had been recently weakened so more money could go to people who were not financially disadvantaged.

Jasmeet Bains (D-Delano) said before the Assembly vote that the definition of vulnerable populations had been watered down. “It’s fundamentally unfair,” she said.

Hundreds of millions of dollars of the bond would benefit private industry. For example, it would provide $850 million to clean energy projects, including proposed offshore wind farms. Those planned wind projects are You are already benefiting of subsidies in President Biden's Inflation Reduction Act.

Governments often take on long-term debt to finance infrastructure projects that are expensive to build but will last for decades. However, some of the planned spending on climate bonds would go toward operating programs that may have concluded long before the bonds are paid out. For example, some would go toward “workforce development,” or worker training.

And up to 7% of the money, or $700 million, can go toward administrative expenses.

“We are already seeing the devastating effects of climate change: more extreme heat waves, catastrophic wildfires and floods, coastal erosion, and severe droughts,” said Sen. Ben Allen (D-Santa Monica) in a news release. “Every corner of our state is affected, and unless we take action now, the cost of addressing these impacts will become increasingly staggering.”