{"id":19263,"date":"2025-05-15T09:35:26","date_gmt":"2025-05-15T16:35:26","guid":{"rendered":"https:\/\/calcanstaging.kinsta.cloud\/?p=19263"},"modified":"2026-01-27T16:02:00","modified_gmt":"2026-01-28T00:02:00","slug":"cap-and-trade-may-revise-2025-26","status":"publish","type":"post","link":"https:\/\/calclimateag.org\/es\/cap-and-trade-may-revise-2025-26\/","title":{"rendered":"Los defensores piden reformas y financiaci\u00f3n espec\u00edfica para el sector agrario en respuesta a la propuesta del Gobernador sobre l\u00edmites m\u00e1ximos y comercio de derechos de emisi\u00f3n"},"content":{"rendered":"

On May 14, Governor Newsom released the details of his revised budget proposal<\/a> for the fiscal year starting in July 2025 and ending in June 2026 (FY 25-26). The proposal maintains the Proposition 4 funding plan put forward in the Governor\u2019s January Budget for agricultural climate solutions. In his May Revise, the Governor committed to working with the legislature to reauthorize the state\u2019s Cap-and-Trade Program through 2045. Cap-and-Trade generates an average of $4.2 billion per year for the state\u2019s Greenhouse Gas Reduction Fund (GGRF) but is currently set to expire in 2030.\u00a0<\/p>\n

Under the current Cap-and-Trade authorization, five programs (including High Speed Rail) are guaranteed a specific percentage of GGRF revenues annually, totalling 65% of total GGRF revenue each year (see Figure 1 in this report<\/a>). In addition to committing to reauthorization, the Governor outlined his top two investment priorities for the GGRF: $1.5 billion annually for CalFire for wildfire suppression and $1 billion annually for High Speed Rail. The Governor\u2019s proposal is silent on how the remainder of GGRF revenue should be allocated. Agricultural climate programs have historically received approximately 5% of GGRF investments, though with significant variability from year to year.<\/p>\n

CalCAN and a coalition of 22 food and farming organizations are continuing to advocate for a dedicated set-aside of GGRF funding to support a suite of proven agricultural climate solutions <\/a> and programs that increase resilience and ensure food affordability.\u00a0<\/p>\n

CalCAN is also part of a broader coalition of over 40 organizations advocating for eliminating free allowances to the oil and gas industry<\/a> in the Cap-and-Trade Program. In 2024 alone, those free allowances were estimated to be valued at over $890 million. Rather than subsidizing the fossil fuel industry, our coalition asks lawmakers to redirect those funds to protect communities from climate impacts and lower costs for California households.<\/p>\n

Budget Outlook: $12 Billion Projected Budget Deficit Due to Tariffs and Medi-Cal Costs<\/b><\/h2>\n

The budget outlook has deteriorated considerably since January, when the state was projecting a balanced budget. The state is now projecting a $12 billion budget deficit, equivalent to 6% of the state\u2019s overall budget, largely due to tariffs\u2019 impacts on the economy and increases in Medi-Cal costs. Given this budget context, budget proposals and legislation relying on new general fund expenditures face a difficult prospect.<\/p>\n

Revised Budget Proposal Maintains Proposition 4 Food and Farm Investments in FY 25-26<\/b><\/h2>\n

Thankfully, the revised budget proposal maintains the same proposed funding levels for Proposition 4<\/a> investments for a number of programs CalCAN has advocated for, including the Healthy Soils Program (HSP), the State Water Efficiency and Enhancement Program (SWEEP), and a new regional equipment-sharing program<\/a>. More specifically, the budget proposal still allocates the following funds in FY 25-26:<\/p>\n