The 2025-26 California Spending Plan

Proposition 4

Introduction

In July 2024, the Legislature approved Chapter 83 (SB 867, Allen), authorizing a $10 billion bond measure entitled the “Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024.” Largely designed to increase the state’s resilience to the impacts of climate change, the measure was placed on the statewide ballot as Proposition 4 and subsequently approved by voters in November. This bond measure builds on significant funding for climate-related programs—principally from the General Fund—the state made in recent years.

This post describes the first year of implementation funding for Proposition 4 as authorized by the 2025-26 budget package. We begin with a high-level summary, then provide an overview of each of the major Proposition 4 categories.

Overview

Budget Package Provides $3.5 Billion for First Year of Proposition 4 Implementation. As shown in Figure 1, the budget package authorizes the state to spend $3.5 billion, or slightly more than one-third, of the $10 billion climate bond in 2025-26. This amount was approved via three different 2025 budget actions: (1) $181 million provided through Chapter 2 (AB 100, Gabriel) in April 2025 (these funds were available for departments to spend during the final few months of 2024-25), (2) $2.9 million through Chapter 5 (AB 102, Gabriel), and (3) $3.3 billion through Chapter 104 (SB 105, Weiner). This total is higher than the $2.7 billion the administration had proposed in the January budget proposal, reflecting legislative augmentations. As shown in the figure, the proportion of total bond funding provided in 2025-26 varies by category, with notably higher shares for Park Creation and Outdoor Access and Climate Smart Agriculture compared to Coastal Resilience and Extreme Heat Mitigation. In most cases, the rationale for providing no appropriation or only a small amount of funding for certain programs in 2025-26 is because departments need to substantively update program guidelines or develop a new program, or because funding still is available for similar purposes from previous budget appropriations.

Some Funding Will Help Offset Impacts of General Fund Reductions. To help address the state’s budget deficit, the Governor proposed reducing about $300 million from nine prior General Fund appropriations for environmental programs and providing at least as much funding from Proposition 4 for similar activities. The final budget package includes both these reductions and bond allocations. As such, the bond funds will help mitigate the programmatic impacts of the state providing less General Fund than it had originally planned for certain activities. In some cases, however, the bond-supported programs—and, therefore, the projects that ultimately will end up being funded—may differ slightly from those that might have been funded with the General Fund, so this approach does not represent a dollar-for-dollar backfill in all cases. Please see our companion post, The 2025-26 Spending Plan: Natural Resources and Environmental Protection, for a list of the reductions.

Timing for Future Allocations of Funding Still to Be Determined. The Governor’s Proposition 4 proposal had presented a multiyear spending approach that included both 2025-26 appropriations and planned amounts for future years through 2039-40. In contrast, the final budget package only approves the initial year of Proposition 4 funding.

Approves New Staff to Administer Bond Programs. The budget package also authorizes nearly 80 new positions across 12 departments to administer Proposition 4-funded programs, as displayed in Figure 2. As shown, the number of new positions range from 13 at the Department of Conservation to one each at the Tahoe Conservancy and California Conservation Corps. The number of new positions for a particular department depends both on the amount of workload anticipated in 2025-26 as well as the degree to which the department had preexisting positions that can be redirected to work on Proposition 4. Many departments—those shown in the figure as well as others—will rely on existing authorized positions that previously were funded with other sources (such as prior bonds) to help implement Proposition 4 programs. Both the new and existing positions working on Proposition 4 programs will be paid for using a portion of the bond funds approved in 2025-26. (As of this writing, the administration was still developing department-specific position and funding totals associated with administering Proposition 4 in 2025-26.)

Budget Trailer Legislation Authorizes Emergency Rulemaking to Accelerate Implementation. In order to help expedite bond implementation, budget trailer legislation—Chapter 106 of 2025 (AB 149, Committee on Budget)—authorizes administering departments to use emergency regulations to develop and adopt guidelines and selection criteria for Proposition 4-funded programs. This will allow departments to move more quickly compared to if they had to adopt regulations following the normal process set forth in the Administrative Procedure Act (APA), but is not as streamlined as the Governor’s initial proposal to exempt Proposition 4 programs from the APA altogether.

Summary of Specific Spending Categories

Safe Drinking Water, Drought, Flood, and Water Resilience

As shown in Figure 3, the spending plan includes $1.2 billion in 2025-26—or about one-third—of the $3.8 billion authorized by Proposition 4 for water-related activities. The largest appropriations are $232 million (49 percent of the bond total) for the Dam Safety and Climate Resilience Local Assistance Program administered by the Department of Water Resources (DWR); $183 million (32 percent) for water quality and safe drinking water, administered by the State Water Resources Control Board (SWRCB); and $153 million (40 percent) for water use and recycling, also administered by SWRCB. Some of the funding for dam safety and water recycling replaces prior General Fund support that was reduced to help solve the 2025-26 budget deficit. Another notable appropriation is $123 million (83 percent of the total) for DWR’s Flood Control Subventions Program. Proposition 4 dedicates $160 million for Salton Sea restoration projects and $10 million to establish a Salton Sea Conservancy pursuant to Chapter 771 of 2024 (SB 583, Padilla); the 2025-26 spending plan appropriates $148 million to DWR for restoration projects and $1.6 million for the new conservancy.

Wildfire and Forest Resilience

Proposition 4 includes a total of $1.5 billion for a variety of activities related to wildfire and forest resilience. Figure 4 shows how the budget appropriates $598 million—40 percent—of this total in 2025-26. The largest category of funding is $200 million for six state conservancies and two other recipients—the Wildfire Conservancy and California Fire Foundation—to improve and restore chaparral landscapes, forests, and watersheds in the state. The Legislature enacted AB 100 in April 2025, which included $171 million of the $200 million in this category. That allowed these funds to be available for expenditure starting in the latter part of 2024-25. Other large categories of funding include $92 million for the forest health program, including $10 million from AB 100 for a fire resiliency center to be run by the Karuk Tribe (which was also available starting in April 2025); $91 million for regional projects implemented by the California Department of Forestry and Fire Protection, Santa Monica Mountains Conservancy (SMMC), and Sierra Nevada Conservancy; and $81 million for local fire prevention grants.

Coastal Resilience

Proposition 4 authorizes a total of $1.2 billion for coastal resilience activities. As shown in Figure 5, the 2025-26 spending plan includes $279 million, or about one-quarter of the total. Much of this funding will flow through the State Coastal Conservancy, including: $63 million (19 percent of the total in the bond) for coastal resilience projects and programs; $41 million (48 percent) for sea-level rise, flood management, and wetland restoration projects in the San Francisco Bay Area; and $36 million (48 percent) for dam removal and water infrastructure, including $5.5 million for the Potter Valley Project in Mendocino County and $20 million for the Matilija Dam removal in Ventura County. The spending plan also includes $43 million for the Ocean Protection Council—$23 million for ocean and coastal resilience and $20 million to continue implementation of Chapter 236 of 2021 (SB 1, Atkins) related to sea-level rise planning.

Biodiversity and Nature-Based Climate Solutions

Proposition 4 includes a total of $1.2 billion for a variety of activities related to supporting biodiversity and nature-based climate activities. Figure 6 shows how the budget appropriates $390 million—one-third—of this total in 2025-26. The largest category of funding is $256 million for the Wildlife Conservation Board to support projects that protect and enhance fish and wildlife resources and habitats. Assembly Bill 149 allocates $20 million from this category to address invasive mussel infestations, such as the golden mussel, and makes some associated policy changes to the California Department of Fish and Wildlife’s (CDFW’s) mussel prevention programs. Another large category of funding includes $84 million allocated across nine state conservancies to increase the public’s access to and reduce the climate change impacts on communities, fish and wildlife, and natural resources.

Clean Energy

Proposition 4 includes a total of $850 million for activities related to clean energy. As shown in Figure 7, the 2025-26 budget allocates roughly one-third of this total—$275 million—to the California Energy Commission (CEC) in 2025-26, primarily to support port infrastructure needed for the development of wind turbines off the California coast. Of the $228 million for offshore wind, $43 million is provided to backfill a reduction of a like amount of General Fund that the Legislature had appropriated for the Offshore Wind Waterfront Facility Improvement Program in 2022-23 and then reduced through this year’s budget package. The budget bill also includes language requiring CEC to report by January 10, 2026 on the use of Proposition 4 funds for offshore wind. The rest of the funding provided in 2025-26—$47 million—is directed to the Distributed Energy Backup Assets (DEBA) program to support microgrids and various clean energy and storage projects. The budget bill prioritizes these dollars for projects receiving federal funding, including reserving $12.5 million of the total DEBA funding to pay for the cost share for water utility projects that have received U.S. Department of Energy Grid Resilience and Innovation Partnerships program grants. The budget package defers allocation of the $325 million included in the bond for energy transmission projects to a future year.

Park Creation and Outdoor Access

Proposition 4 includes a total of $700 million for a variety of activities related to supporting park creation and outdoor access activities. Figure 8 shows how the budget appropriates $466 million—about two-thirds—of this total in 2025-26. The largest category of funding is $190 million for the Statewide Parks Program, to be implemented by the Department of Parks and Recreation (Parks) likely through its Statewide Park Development and Community Revitalization Program. Other large categories of funding include $119 million for projects largely implemented by Parks (with some funding for CDFW and SMMC) that expand outdoor recreation and reduce climate impacts on disadvantaged communities, and $84 million to help address deferred maintenance at state parks.

Extreme Heat Mitigation

Proposition 4 authorizes $450 million for activities to mitigate the impacts of extreme heat. As shown in Figure 9, the budget package allocates $110 million of this funding in 2025-26, equivalent to 25 percent of the total available in the bond. As shown, some activities received a higher share of first-year funding than others. For example, the Urban Greening Program was allocated 47 percent of total funds ($47 million), whereas the Transformative Climate Communities Program received less than 1 percent ($1 million) of its bond total for 2025-26. These distinctions are due to the administration anticipating needing more time to build capacity within the administering departments and/or the grantee communities before launching new grant cycles.

Climate Smart Agriculture

Proposition 4 includes a total of $300 million for a variety of activities related to supporting climate smart agriculture. Figure 10 shows how the budget appropriates $153 million—51 percent—of this total in 2025-26. The largest category of funding is $74 million to improve the climate resilience of agricultural lands through two existing programs administered by the California Department of Food and Agriculture (CDFA)—the Healthy Soils Program ($36 million) and the State Water Efficiency and Enhancement Program ($38 million). Other large categories of funding include $20 million to fund various invasive species activities and projects, $20 million to support farmers’ markets, and $19 million to fund urban agricultural projects—all implemented by CDFA.