November climate bond seems all but certain

Jul 3, 2024

By Melissa Sparks-Kranz, legislative affairs lobbyist (environmental quality), and Zack Cefalu, legislative affairs analyst 

A long-awaited climate bond needs to clear both the Assembly and Senate tonight to make it on the November ballot. Cal Cities maintained a support if amended position for SB 867 (Allen), which now includes many of Cal Cities’ funding asks. Climate change resiliency and disaster preparedness are among Cal Cities’ top advocacy priorities for 2024.

Gov. Gavin Newsom and legislative leaders conditioned the state’s budget in part on the climate bond.

The Legislature technically had until June 27 to pass measures for the November 2024 ballot. However, the Secretary of State extended the final deadline to July 3 for the measure.

Lawmakers held SB 867 and a similar measure, AB 1567 (Garcia), in committee last year. Progress resumed this spring with negotiations via legislative working groups, but no changes to the bill were made until late Saturday, this past weekend. SB 867 came out of these negotiations as a $10 billion climate bond, down from $15 billion.

In its lobbying, Cal Cities repeatedly stressed the need for a long-term bond financing mechanism to the bill’s authors, legislative working group members and staff, and at budget hearings — where lawmakers reduced climate funding in the state budget. Cal Cities also worked with a local government coalition to advocate for cities, counties, and special districts.

What’s in the bond?

The $10 billion climate bond covers a range of funding categories. The climate bond will provide critical funding support for cities to advance vital climate initiatives.

The bulleted items under each category reflect funding that Cal Cities strongly advocated for:

Water ($3.8 billion total)  

  • Stormwater capture and reuse: $110 million.
  • Inland brackish desalination: $62.5 million.
  • Water recycling: $386 million.
  • Groundwater recharge: $386 million.
  • Regional water conveyance: $75 million.
  • Surface water storage: $75 million.
  • Local water conservation programs: $75 million.
  • Dam and reservoir safety: $480 million.
  • Watershed management: $435 million.
  • Safe, clean, and reliable water including monitoring for PFAS: $610 million. 

Wildfire and forest resilience ($1.5 billion total) 

  • State and local wildfire prevention: $1.34 billion.
  • Utility line undergrounding: $35 million. 
Coastal resilience ($1.2 billion total) 

  • Sea level rise mitigation and adaptation funding: $490 million. 
Extreme heat mitigation ($450 million total) 

  • Addressing heat island effect and extreme heat: $450 million. 
Protect biodiversity ($1.2 billion total) 

  • Native landscaping, invasive species control, and protection of natural pollinators: $870 million. 
Climate-smart agriculture ($300 million total) 

  • Reducing the use of toxins and protection of biodiversity: $20 million.
  • Parks, outdoor, and climate resilience ($700 million total)
  • Urban greening, and state and local parks: $700 million. 
Energy ($850 million total) 

  • Rate protection of utility costs, including for low-income and senior ratepayers: $325 million.
  • Long-term battery storage projects: $50 million. 

While the Legislature did not prioritize funding organic waste diversion infrastructure and transitioning public fleets to zero-emission vehicles, the measure would direct funding to most of Cal Cities’ priorities.

Next steps

If SB 867 clears the Assembly and Senate, it will proceed to the Governor for approval. Both he and the Lieutenant Governor are out of state, so Senator Pro Tem Mike McGuire will need to sign off on the bill to advance it to the ballot box.

Cal Cities Board of Directors will meet in July to review whether to support the climate bond should it qualify as a ballot initiative.