FOR IMMEDIATE RELEASE
January 9, 2026
Contact: Michael Blenner, michael.blenner@sierraclub.org
Governor Newsom’s Budget Proposal Leans on Volatile Funding Sources for Environmental Priorities
Sacramento, CA – Today, Governor Newsom released the 2026-2027 state budget proposal, his final as Governor of California, which includes an improved $43 billion revenue outlook. Despite this improvement, the proposal continues to lean heavily on special funds, one-time allocations, and fund shifts to implement core climate and environmental programs. Without stable General Fund commitments, Californians are left with patchwork strategies that make long-term planning harder and leave frontline communities in suspense.
Even as overall General Fund revenues grow, the Governor’s proposal signals a shrinking commitment to baseline funding Californians need to meet the scale of climate impacts already affecting communities statewide. The Newsom administration's response to the climate emergency is repeatedly being treated as a one-time expenditure rather than permanent responsibility.
Fortunately, the proposal includes some crucial environmental investments that can deliver vital benefits to Californians if implemented equitably and sustained. These include $2.6 million ongoing in special funds to expand water quality permitting in response to the U.S. Supreme Court’s Sackett decision, an important step as federal protections are weakened, even though Californians shouldn’t have to fund these basic clean water safeguards. There is also a $199 million allocation for climate and biodiversity priorities that will further the state’s 30x30 goals through ecosystem conservation and Salton Sea Habitat restoration. The budget proposal points to continued efforts to cut pollution through investments in a new light-duty ZEV incentive program, and other community-centered programs that will help Californians access clean vehicles, reduce energy bills through building electrification and clean heat upgrades, and improve local air quality.
As the Governor closes out his administration, reducing General Fund commitments to environmental agencies leaves California increasingly reliant on volatile funding sources. Frontline communities will be forced to depend on cap-and-invest dollars like the GGRF and Proposition 4 funding to shore up essential environmental programs. The next Governor will have significant work to do to rebuild stable and long-term environmental commitments that Californians can count on. Looking ahead to the May revision, Sierra Club California and our allies will be closely monitoring the volatility of these investments.
Statement from Miguel Miguel, Director:
“Just yesterday, the Governor acknowledged in his State of the State address that the climate risk is a financial risk. That is exactly why California needs climate investments that are stable and ongoing. Communities should not feel secure in their climate future one day only to have funding stripped away when budgets get lean. With the May revision still ahead, Sierra Club California will be fully dedicated to ensure these funding commitments to do not shrink”
Statement from Gabriela Facio, Senior Policy Strategist:
“California risks undermining its climate goals if it continues to deprioritize preventive investments in environmental commitments. When paired with policies such as SB 237, that facilitate oil and gas development in already high-risk areas, this funding approach in declining general fund support only highlights a misalignment in state priorities. One year after the Los Angeles wildfires, it is important to remember that stable, preventative investments are key to make sure our communities at the frontline don’t continue to pay the price.”
Statement from Jakob Evans, Senior Policy Strategist:
“The Governor’s proposal for $200 million in funding for a new light-duty ZEV incentive program is essential for California to maintain its clean vehicle leadership amidst hostile rollbacks from the Trump administration. We are eager to ensure this program provides equitable and effective incentives and are hopeful to see reliable funding for this commitment.”
###
Sierra Club California is the legislative and regulatory arm of Sierra Club’s 13 local chapters in California, representing half a million members and supporters.