Statement on May 2025-2026 Budget revisions

Dear Governor Newsom,

On behalf of the Green Policy Initiative, a student-led, volunteer-based organization dedicated to advancing sustainability and environmental justice throughout California, we are writing to express our deep concern about the direction of sustainability and climate funding in the 2025-26 May Revision. We recognize the gravity of the state’s $12 billion shortfall, which is a direct result of declining revenues, increased Medi-Cal expenditures, and the economic headwinds from federal tariffs. We also appreciate your continued prioritization of education, housing, and public health, and the prudence of maintaining $15.7 billion in reserves. At the same time, the choices reflected in this budget for climate and sustainability programs threaten to reverse years of progress and undermine California’s leadership at a time when urgent action is needed.

The May Revision’s solutions are heavily weighted toward program reductions, with $5 billion in cuts for 2025-26 that will grow to $14.8 billion by 2028-29. One of the most consequential changes is the reallocation of $1.5 billion from the Greenhouse Gas Reduction Fund to support CAL FIRE operations. While we understand the necessity of maintaining wildfire response capacity, this shift significantly reduces funding for other climate priorities, including clean transportation, sustainable communities, and local air quality. The GGRF has historically been a cornerstone of California’s climate ambitions. Redirecting these resources will slow progress on emissions reduction and climate resilience, particularly at the community level, and it raises questions about the long-term stability of funding for essential sustainability programs.

The reduction in funding for the Affordable Housing and Sustainable Communities program is equally troubling. This program has been vital for integrating affordable housing with climate-smart transportation and infrastructure. The current cuts come at a time when the need for affordable, climate-resilient housing is greater than ever. The AHSC program addresses both the housing crisis and the climate crisis, supporting infill development and transit accessibility that reduce emissions and foster equitable, sustainable communities. Diminished funding now will make it harder for the state to meet its climate and housing goals simultaneously, especially for low-income Californians who are most vulnerable to both housing insecurity and environmental hazards.

The Active Transportation Program remains flat at $200 million, a figure dwarfed by the $2.5 billion in project requests received last year. This persistent underfunding means many high-impact, shovel-ready projects will not move forward, limiting the state’s ability to expand safe, sustainable mobility options. The lack of adequate support for walking and biking infrastructure undermines California’s commitment to reducing vehicle miles traveled and lowering greenhouse gas emissions. It is difficult to reconcile this funding level with the state’s stated goals for sustainable urban planning and public health.

The overall budget for water and climate projects is reduced to $12.9 billion for FY25, a 21% reduction over the last two years. Most notably, funding for extreme heat adaptation, urban greening, and community resilience is cut by 54% from previous allocations, leaving only $297 million for these urgent needs. As California faces more frequent and severe heat waves, droughts, and wildfires, these cuts could not be more ill-timed. Sustainable agriculture programs are also affected, facing a 7% reduction, with $1.1 billion remaining for projects such as diesel engine replacement and methane reduction. These reductions threaten the progress California has made in building a climate-resilient food system and supporting farmers in transitioning to more sustainable practices.

The May Revision also extends the timeline for major climate investments from five to eight years. Delaying these investments risks leaving frontline communities exposed to worsening climate impacts. These delays are particularly troubling for low-income communities and communities of color, who are most vulnerable to environmental hazards and least able to adapt without robust state support.

While we appreciate the proposed 15-year extension of California’s cap-and-trade program, which is projected to provide approximately $60 billion in utility bill credits for Californians over the next 15 years, we are concerned that the immediate reductions and delays outlined in the May Revision threaten to slow the momentum of California’s climate progress at a time when urgent action is needed.

The budget’s approach to public health and equity is also a cause for concern. The diversion of funds and the reduction of benefits in Medi-Cal and related health programs will disproportionately affect vulnerable populations, including those already facing the greatest environmental burdens. The intersection of climate, health, and equity demands a holistic approach that ensures all Californians have access to clean air, safe water, affordable housing, and healthy communities.

To summarize, while we recognize the necessity of fiscal discipline in the face of economic uncertainty, we urge your administration and the Legislature to reconsider the most significant reductions to sustainability and climate programs. We ask that you prioritize the restoration of funding for initiatives that are essential to meeting California’s climate, equity, and public health goals. Investments in clean transportation, affordable housing, urban greening, sustainable agriculture, and community resilience are foundational to a sustainable and just future for all Californians. The choices made in this budget will shape the state’s trajectory for years to come. We hope that California will continue to lead with bold, equitable, and effective climate action.

Thank you for your continued leadership and for your attention to these critical issues. We look forward to working with your administration and the Legislature to ensure that California remains a global leader in sustainability and climate action.