After campaigning on “big, hairy, audacious goals,” Gov. Gavin Newsom has delivered, enacting some of the world’s most ambitious climate targets. The state is now finding itself short on infrastructure dollars to implement the sweeping regulatory mandates and a shrinking state budget has put more focus on federal dollars.
Yet California’s rigid environmental laws—and the powerful interest groups backing them—have erected a steep political barrier to access that funding. Lawmakers on both sides of the aisle expressed deep frustrations with Newsom during several informational hearings last week on the governor’s proposals for streamlining environmental reviews, adding up to some of the strongest public opposition Newsom has faced in office.
Agriculture and water groups have rushed to his defense as they expressed long-simmering frustrations over delayed infrastructure projects. A broad coalition of trade groups is urging the Legislature to adopt the trailer bills through the budget process this month.
“The infrastructure streamlining package is essential to accelerate critical energy, water and transportation infrastructure projects we need to achieve California’s world-leading climate goals,” argued the coalition in a letter to Senate and Assembly leaders last week.
The sense of urgency has changed how Newsom is engaging with the Legislature. Last month the administration filed nearly a dozen budget trailer bills to take effect on July 1, avoiding potentially lengthy public scrutiny in policy committees while also limiting the time for lobbyists to mobilize in opposition.
In a press conference announcing the legislative package, Newsom said the coming building boom will eclipse that of the ‘50s and ‘60s—a time when the state built its largest dams. He singled out the Sites Reservoir proposal for specifically benefiting from the actions.
“[This is] an opportunity to move in a new direction, to recognize the urgency of the moment we’re living in and to recognize that urgency is not just around climate change, it’s around trust,” said Newsom. “That urgency is around actually delivering on what we promote and promise.”
He reasoned that “delays become denials” and “people want to see results.” Natural Resources Secretary Wade Crowfoot echoed those comments during the hearings.
Natural Resources Secretary Wade CrowfootLast year Newsom tasked Crowfoot with finding ways to expedite environmental permits for the seven water projects that stand to gain Proposition 1 water bond funding. The effort was too late for the Temperance Flat Reservoir proposal, however. Delays in doling out the Prop. 1 dollars compounded by a controversial decision in 2018 by the California Water Commission to reduce the project’s allocation led to a steeper price tag for local water districts to shoulder and ultimately to the decision to pull out of the project altogether in 2020, ending a 20-year pursuit.
According to a new economic development report commissioned by the administration, transportation and water represent more than 90% of the identified funding needed to meet California’s demand for infrastructure projects.
The administration has identified $180 billion in potential federal infrastructure funding through the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. In conversations with the Biden administration, Crowfoot recognized the political and economic importance in quickly spending the money on shovel-ready projects and for the need to change California’s reputation in Washington, D.C.
“Too often California gets dismissed or deprioritized … because of the perception that we will move too slowly to get this money to work,” he said at one hearing, while admitting the state is not in a position to meet its clean energy targets. “Simply put, it's too lengthy and difficult to get the projects done.”
While Newsom stressed that he still supports environmental causes, dozens of interest groups have coalesced in opposition to his proposals. Some of the most progressive environmental lawmakers have echoed the concerns and shared outspoken criticism in the hearings.
“I get the urgency aspect,” said Assemblymember Ash Kalra of San Jose. “But why does it need to go through the budget process and not the policy process? We're talking about issues that have been around, in some cases, for decades. I do have deep concerns to the process being rushed.”
Asm. Rebecca Bauer-Kahan of Orinda pressed Crowfoot to list the specific projects that would benefit from the proposals and blasted one bill related to Newsom’s Delta conveyance project, arguing the tunnel would not provide “an environmental benefit of any kind.”
“I'm perplexed why we would allow a CEQA [California Environmental Quality Act] streamlining for all water-related projects with no end,” said Bauer-Kahan.
Crowfoot responded that the urgency around water projects is needed not just for federal funding but “because we're focused on our communities not running out of water in the coming years.” About six million Californians were subject to water rationing at the peak of the drought last winter, and that number would have grown to 20 million this summer if the conditions continued—with more than half of California rationing water. He estimated that hundreds of communities would likely have run out completely.
Crowfoot reiterated throughout the hearings that Newsom’s proposals are not seeking CEQA exemptions or to curtail the process.
“We need to help these projects go through full environmental review more quickly,” he explained. “We need to adjudicate litigation more quickly.”
Several labor groups support the proposals. Scott Wetch, a lobbyist for electrical, pipe and sheet metal workers, commented that his trade groups have been at the forefront of protecting CEQA for 25 years and he stressed the need for immediate action. During the recent debt ceiling negotiations, he said, Republicans in Congress “tried to pull back every single dollar” for climate projects in the infrastructure act and will attempt to do so again in the budget reconciliation process and for the next budget.
“You have to stop letting the perfect be the enemy of the good,” said Wetch. “We have to get this done.”
Yet Senator Ben Allen of Santa Monica defended the status quo. He took offense with a proposal to modernize regulations for the state’s fully protected species list—legislation the administration argues is not based on science and delays project permits. He pointed out that the Natural Resources Committee routinely authorizes waivers for the taking of protected species, which often carry an urgency declaration and pass with broad consent.
“I've never heard of a situation where the administration was unhappy with our responsiveness to this issue,” he said.
Department of Fish and Wildlife Director Chuck Bonham contended that the state “can't keep piecemealing” its approach to the climate goals, especially with specific carveouts for each solar generation project.
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“It is good government practice to look at your policies and procedures and laws and update them,” said Bonham. “It's been half a century.”
Allen responded that in his nine years on the committee, he was never aware of such a problem.
Lobbying on behalf of the environmental group Defenders of Wildlife, Kim Delfino argued that the state has continued to develop infrastructure projects since the fully protected law has been on the books. Delfino, along with several other environmentalists who lawmakers invited to testify against the bills, was frustrated the administration did not consult them on the proposals prior to introducing them.
Sen. Ben Allen, D-Santa MonicaThe Legislative Analyst’s Office (LAO), along with several lawmakers, pointed out that the administration has been working on the proposals for more than a year but brought them to the Legislature just weeks ahead of a deadline for passage. LAO advisors testified that they did not see a need to rush the proposals through the budget process.
Sharing concerns over water infrastructure projects in general, Doug Obegi, a senior attorney for the Natural Resources Defense Council (NDRC), argued the governor’s bill package would not advance clean energy development.
“It really seems to be much more focused on water projects,” said Obegi, noting that NRDC, sportfishing groups and several tribes oppose both Sites and the Delta tunnel over fears of taking more water from the Sacramento–San Joaquin Delta. “CEQA is not the barrier for these projects. The fact is that the administration hasn't done its homework to get these projects ready to be permitted.”
He argued that the Sites Project Authority has not done enough analysis to explore alternative operations, while both projects have had delays in water rights proceedings, have not finalized CEQA documents, and remain years away from getting federal endangered species permits.
Republican Sen. Brian Dahle of Bieber was just as frustrated with the administration and aligned his comments with several Democratic colleagues who felt the governor was attempting to quickly jam the bills through the Legislature. Dahle repeated his longstanding concerns over setting aggressive goals without an implementation strategy.
“We cannot get this wrong,” he said. “We are setting ourselves up for failure when we don't bring the public along and we don't have a plan of where we're going to go.”
Out of three lengthy informational hearings related to water projects, the only witness outside of the administration to testify in support of the proposals was Jennifer Pierre, general manager of State Water Contractors. In her brief presentation, she called water infrastructure a climate change imperative that needs an all-of-the-above approach.
“I've been fascinated with the focus on the Delta conveyance today, because that's not the focus that we have when we read these bills,” said Pierre.
She stressed that the State Water Project (SWP) is the largest state-owned water utility in the world, requiring the Department of Water Resources to complete hundreds of projects every year across 700 miles of canals, dams, pipelines and pump stations. According to Pierre, the SWP is undertaking a significant number of new infrastructure projects to improve water resilience, the supply, reliability, repair aging infrastructure and improve grid reliability.
“California needs to stop talking and start building,” she said in a statement.
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