The Governor's Budget includes $1.8 billion ($85.3 million General Fund and $1.7 billion other funds) for the California Environmental Protection Agency (CalEPA) and $13.1 billion to protect and manage California's Resources Agency. Funding supports efforts to reduce greenhouse gas emissions that cause climate change, promote clean alternative fuels, improve water quality, reduce risk from pesticides and hazardous chemicals, and encourage the reuse of recyclable materials and brownfield sites. 

The proposed budget was constructed first by computing the workload budget funding level.  From the workload budget, adjustments are made to reflect specific policy adjustments and reductions, including budget-balancing reductions. 

Proposed Workload Budget

Ongoing Implementation of the Global Warming Solutions Act of 2006 (AB 32)

• $5.6 million Air Pollution Control Fund for additional staff and resources to continue implementation of programs and strategies to reduce greenhouse gas emissions and other contributing factors to global warming. These resources are for the development of additional early action measures, both regulatory and non-regulatory, to reduce greenhouse gas emissions, primarily from the trucking and port industries, cement, semi-conductor, and consumer product industries.

Regulatory Implementation and Enforcement

• $8.5 million Motor Vehicle Account to focus on the Air Resources Board's implementation and enforcement efforts related to controlling toxic diesel particulates from on- and off-road mobile sources. These include regulations relative to in-use off-road diesel vehicles, composite wood formaldehyde emissions, and diesel auxiliary engines for port and ocean-going vessels.

Alternative and Renewable Fuel and Vehicle Technology Program

• $100.9 million Alternative and Renewable Fuel and Vehicle Technology Fund for the California Energy Commission to prepare guidelines and provide grants, loans, and other appropriate measures to public agencies, public-private partnerships, and other entities to develop alternative fuels and related technologies, including electricity, ethanol, renewable diesel, natural gas, hydrogen, and biomethane, among others. The development of these fuels and technologies will help reduce California's dependence on petroleum-based fuels.

Proposition 84

• $100.5 million local assistance for the State Water Resources Control Board to continue water quality programs, including the following:
  • $46.1 million for the Clean Beaches Grant Program. This program provides grants to public agencies for water quality projects in coastal waters, estuaries, and bays. Projects include upgrading septic systems, storm water pollution reduction programs, and clean beach projects in Santa Monica. Proposition 84 specifies that 20 percent of the funds for clean beaches be allocated to the Santa Monica Bay Restoration Commission.
  • $44.8 million for the Urban Stormwater Grant Program. This program provides grants to local public agencies for projects that mitigate stormwater runoff, such as diverting the runoff to treatment facilities.
  • $7.8 million for the Agricultural Water Quality Grant Program. This program provides grants for public agencies or nonprofit organizations to improve agricultural water quality, including projects related to research and construction of agricultural drainage water improvements.
  • $1.7 million for the State Water Pollution Control Revolving Fund Program. This program provides low interest loans or grants to construct municipal wastewater treatment facilities, storm water pollution control projects, non-point source pollution projects, and estuary enhancement projects. This funding includes the state share needed to match federal funds.

One-Time Cost Reductions

• $234.8 million ($1.2 million General Fund) reduction in one-time funding for 2007-08, including:
  • $192.2 million Highway Safety, Traffic Reduction, Air Quality, and Port Security Fund used to replace pre-1987 school buses and retrofit old diesel school buses.
  • $1.2 million General Fund for the DTSC to purchase equipment for the implementation of the Biomonitoring Program.

Natural Resources

The proposed budget was constructed first by computing the workload budget funding level.  From the workload budget, adjustments are made to reflect specific policy adjustments and reductions, including budget-balancing reductions.  With these adjustments, the Governor's Budget provides approximately $13.1 billion to protect and manage California's natural resources in 2008-09. 

Proposed Workload Budget

• $1 billion in Proposition 84 funds for natural resources programs in 2008-09, which include the following:
  • $350 million for Department of Water Resources (DWR) for regional projects that increase water supplies, encourage water conservation, improve water quality, and reduce dependence on exported water.
  • $89.1 million for the State Coastal Conservancy to restore coastal wetlands and watersheds and promote public access to the coast.
  • $26.4 million for the Ocean Protection Council to develop marine protected areas and enhance habitat for marine species.
  • $33.3 million for the California Conservation Corps and local conservation corps for public safety and watershed restoration projects, as well as grants to local corps for acquisition and development facilities to support local corps programs.
  • $16.7 million for Parks for deferred maintenance, interpretive exhibits, and cultural and natural stewardship projects at state parks.
  • $15.8 million for DWR to complete feasibility studies for surface water storage projects, evaluate climate change impacts on the state's water supply and flood control systems, and develop a strategic plan for the sustainable management of the Sacramento-San Joaquin Delta's water supplies and ecosystem.
  • $10.8 million for Fish and Game for environmental and ecosystem restoration activities at the Salton Sea.

One-Time Cost Reductions

• The Budget reflects decreases of $66.5 million General Fund and $878.5 million in other funds, including the following significant reductions:
  • General Fund: $47.3 million to remove 2007-08 funding for lining of the All-American Canal.
  • Various reductions related to numerous expiring one-time bond fund appropriations for Resources Agency departments.

Program Enhancement and Other Budget Adjustments

Despite the need for significant General Fund reductions to ensure a balanced budget, the Governor's Budget includes these program enhancements to restore, preserve, and enhance California's environmental quality and protect public health.

California Education and the Environment Initiative

• The Budget includes $1,167,000 one-time for 2008-09 and $917,000 one-time for 2009-10 from the California Beverage Container Recycling Fund to implement the California Education and the Environment Initiative. The California Integrated Waste Management Board will assist in the development of the K-12 classroom curriculum for core subjects incorporating environmental principles and concepts, and will educate students in how their personal consumption and recycling choices affect the environment.

Green Chemistry and Pollution Prevention

• The Budget includes $772,000 to expand the existing Pollution Prevention program in the area of green chemistry. These resources will focus on product design and industrial innovation that reduces the use of harmful chemicals in products and generates fewer emissions and less waste, thereby moving California towards safe and sustainable industrial chemistry.

Water Quality and Water Rights Investigation and Enforcement

• The Budget includes $790,000 Waste Discharge Permit Fund, $524,000 Water Rights Fund to fund investigators and enforcement personnel for the State Water Resources Control Board. The program enhancements will improve the Water Boards' ability to enforce state laws.

Proposed Budget Balancing Reductions

Total budget-balancing reductions for CalEPA amount to $8.3 million and reductions for the Resource Agency amount to $89.3 million in 2008-09.  These totals include the following: 

• $4.3 million in 2008-09 for the State Water Resources Control Board. These reductions will result in delays to the Board's capacity to issue permits for pollutant discharge elimination systems that regulate the discharge of wastewater to surface waters in the state. The reduction will also decrease contract funding for Total Maximum Daily Load (TMDL) action plans to restore clean water. The federal Clean Water Act requires that states identify water bodies - bays, rivers, streams, creeks, and coastal areas - that do not meet water quality standards, and identify the pollutants that impair them, and develop solutions. The contracts support scientific research, assessment, and monitoring as part of TMDL development.
• $1.3 million in 2007-08 and $2.4 million in 2008-09 for the Department of Toxic Substances Control's Site Mitigation and Brownfields Reuse Program. This reduction will decrease the annual number of drug lab cleanups performed by the state.
• $0.1 million in 2007-08 and $1 million in 2008-09 for the Office of Environmental Health Hazard Assessment (OEHHA). This adjustment will reduce funding available for scientific evaluations of the effects of fuels on human health and the state's environment and will reduce the number of air toxic contaminant evaluations that OEHHA can perform annually
• $1.4 million in 2007-08 and $3.6 million in 2008-09 for the Department of Fish and Game's (Fish and Game's) Biodiversity Conservation Program. This reduction will reduce funding for habitat restoration projects and the review of timber harvest plans.
• $2.6 million for Fish and Game's Enforcement Program. This reduction will eliminate wardens that are responsible for enforcing fish and game laws, inspecting vessels for quagga mussels, and protecting sensitive populations of marine species.
• $1.0 million in 2007-08 and $13.3 million in 2008-09 for the Department of Parks and Recreation's (Parks) state park system. This reduction will close 48 state parks out of 278 existing parks and reduce seasonal lifeguards at state beaches in Orange, San Diego, and Santa Cruz Counties by a minimum of 50 percent.
• $5.4 million for the Department of Water Resources' (DWR) Flood Management Program. This reduction will be partially offset because Proposition 1E and Proposition 84 funds are available for erosion repair, sediment removal, and Delta levee projects.

Other Special Session Issues

• To immediately address the budget and cash shortfall, the Administration will propose in the Special Session of the Legislature to revert $30 million General Fund for deferred maintenance at state parks. Parks is currently spending $75 million on deferred maintenance projects; these funds were originally appropriated in the Budget Act of 2006 and made available for expenditure through June 2012. Because a portion of these funds have not yet been spent, parks will disencumber and revert a total of $30 million as a budget-balancing current-year reduction. Proposition 84 provides a $400 million for various state park improvements, and this reversion will be back-filled with a $30 million augmentation from those funds.