The 2025-26 California Spending Plan

Natural Resources and Environmental Protection

This post begins by providing an overview of total spending for the departments overseen by the California Natural Resources Agency (CNRA) and California Environmental Protection Agency (CalEPA). Next, we discuss a number of cross-cutting issues that affect departments in both agencies, including Proposition 4, budget reductions, and spending from the Greenhouse Gas Reduction Fund (GGRF). We then discuss individual departments that had notable budget changes within each of the two agencies.

Overview

The 2025-26 budget package provides a total of $19.7 billion from various fund sources—the General Fund, a number of special funds, bond funds, and federal funds—for the departments overseen by CNRA and CalEPA. This amount represents 72 percent of total 2024-25 estimated expenditure levels. This significant year-to-year decrease is primarily due to significant one-time funding—mostly from the General Fund—available for the departments within both agencies in 2024-25, including large amounts of funds carried over from prior years. Figures 1 and 2 below show the funding totals for the major departments within CNRA and CalEPA. These totals incorporate authorized spending included in the budget package from Proposition 4 (the climate bond approved by voters in November 2024) and GGRF.

Cross-Cutting Issues

Proposition 4 Climate Bond Allocations

Budget Package Provides $3.5 Billion for First Year of Proposition 4 Implementation. As shown in Figure 3 below, the budget package authorizes the state to spend $3.5 billion, or slightly more than one third, of the $10 billion climate bond approved by voters through the November 2024 ballot. 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). The budget package also authorized 79.5 new positions across 12 different departments to implement bond-funded programs. In order to help expedite bond implementation, budget trailer legislation—Chapter 106 (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. Please see our post, The 2025-26 California Spending Plan: Proposition 4, for more detailed information on Proposition 4 budget actions.

Budget Solutions

Budget Package Reduces About $900 Million From Prior Environmental Augmentations. Due to the state budget shortfall, the 2025-26 spending plan makes a number of reductions to previous and planned General Fund augmentations. Figure 4 below provides a summary of the reductions to environmental programs included in the 2025-26 budget agreement, totaling $898 million. As shown, most of these are within CNRA and CalEPA departments. The two largest reductions total $500 million from Proposition 98 General Fund that had been planned to support the purchase of and infrastructure for zero-emission school buses in 2025-26 as part of a previously-approved zero-emission vehicles (ZEV) package. (This action creates savings within the Proposition 98 school spending requirement.) Most of the rest of the funding shown in the figure was provided in 2024-25; as such, the budget package reverts the funds in order to achieve savings. In all but one case, these represent reversions of one-time appropriations, resulting in one-time General Fund savings. (We discuss the one ongoing reduction—$750,000 resulting from the Department of Water Resources [DWR] changing the frequency of publishing its groundwater bulletin—later in this post.)

Shifts Some Funding to Other Sources. The budget package also shifts spending for two environmental activities that had been planned for General Fund support to other sources in order to achieve General Fund savings without having programmatic impacts. These shifts include (1) using $1 billion from GGRF for operations of the California Department of Forestry and Fire Protection (CalFire) and (2) relying on $35 million from the Lead-Acid Battery Cleanup Fund to support the Department of Toxic Substances Control (DTSC) in conducting clean-up activities at the Exide facility and surrounding communities. While both of these shifts apply just to 2025-26, the budget package includes language stating intent to provide additional GGRF funding to CalFire in future years to achieve General Fund savings. Specifically, if the General Fund continues to experience deficits, the plan intends that GGRF would cover $1.25 billion of CalFire’s costs in 2026-27, $500 million in 2027-28, and $500 million in 2028-29. If the General Fund is not projected to be in a deficit in 2026-27, GGRF would only cover $500 million for CalFire in that year.

Additionally, as noted in Figure 4, the budget package uses Proposition 4 to help offset the impacts of some General Fund reductions. Specifically, the budget reduces $298 million General Fund from previous appropriations for nine programs but also provides Proposition 4 funding for similar activities. The bond funds will help mitigate the programmatic impacts of the state providing less General Fund than it had originally planned for these programs. 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.

Greenhouse Gas Reduction Fund Expenditure Plan

Assumes $4.1 Billion in Total GGRF Expenditures. The budget package assumes a total of $4.1 billion in expenditures from GGRF in 2025-26. This includes $2.4 billion in statutorily-required appropriations—most of which are continuously appropriated—for the high-speed rail project and various other programs, such as for housing, transit, forest health, and drinking water. (Because most of the statutorily-required appropriations currently are set as a percentage of cap-and-trade auction proceeds, the amount they ultimately will receive is uncertain and will depend upon how much revenue is generated over the coming year.)

Most Discretionary Spending Directed to Support General Fund and Motor Vehicle Account. In addition to the statutorily required expenditures, the budget package also includes $1.7 billion in discretionary spending in 2025-26, as shown in Figure 5 below. Most of this— $1 billion—is related to the CalFire fund shift described above, replacing a like amount of General Fund to provide budget relief. Additionally, in order to help the Motor Vehicle Account remain solvent in 2025-26, the budget includes $81 million to pay for costs that otherwise would have to be paid by that account. (Please see our post, The 2025-26 California Spending Plan: Transportation, for more discussion of issues related to the Motor Vehicle Account.) The other discretionary allocations represent some, but not all, of the funding that was originally planned for 2025-26 as part of the 2024-25 multiyear GGRF expenditure plan. These include $368 million for the Transit and Intercity Rail Capital Program, $100 million to address local air pollutants in disadvantaged communities pursuant to Chapter 136 of 2017 (AB 617, Garcia), a total of $65 million for two ZEV-related programs, and $7 million for livestock methane reduction. (To identify which programs did and did not receive GGRF as planned for in previous years, please see our description of the prior multiyear funding plan in our September 2024 publication, The 2024-25 California Spending Plan: Natural Resources and Environmental Protection.)

Legislature Extended Cap-and-Invest Program Through 2045. Separate from the budget, in September 2025, the Legislature adopted two significant pieces of legislation related to the cap-and-trade program and GGRF. First, Chapter 117 of 2025 (AB 1207, Irwin) extended the sunset on the program from 2030 to 2045, renamed it “cap-and-invest,” and included various other changes. Second, Chapter 121 of 2025 (SB 840, Limón) revised the existing statutory allocation amounts that support particular activities starting in 2026-27, including changing many from being set percentages of GGRF revenues to fixed amounts. (We plan to discuss AB 1207 and SB 840 further in a forthcoming brief.)

Efficiency and Vacant Position Reductions

2025-26 Budget Implements Control Sections First Added in 2024-25. Control Sections 4.05 and 4.12 of the 2024-25 and 2025-26 budget acts directed the Department of Finance (DOF) to identify efficiencies to reduce costs without adverse effects on state services. (DOF exempted certain departments—including CalFire and the California Conservation Corps—from reductions pursuant to these control sections due to their role in wildfire response.) DOF subsequently worked with departments to implement these reductions. Please see the forthcoming “New and Ongoing Efforts to Achieve Efficiencies” section of our post, The 2025-26 California Spending Plan: Other Provisions, for more information on Control Sections 4.05 and 4.12. Below, we discuss how these control sections affect CNRA and CalEPA departments in the 2025-26 budget.

Reduces State Operations Funding for CNRA and CalEPA Departments. Control Section 4.05 directed savings to be achieved through “operational efficiencies and other cost reduction measures including, but not limited to, reorganizations, eliminations of boards and commissions, rate changes, contract reductions, elimination of excess positions, and the cancellation or postponement of information technology projects.” As shown in Figure 6, through Control Section 4.05 the budget package reduces $189 million across CNRA and CalEPA departments in 2025-26 and ongoing, including $38 million from the California Department of Fish and Wildlife, $29 million from the State Water Resources Control Board (SWRCB), and $25 million from the California Air Resources Board (CARB). (The budget package scored about the same level of savings through this control section for the 2024-25 fiscal year.) These amounts reflect reductions made pursuant to AB 102. Of this total, 28 percent ($53 million) consists of reductions to General Fund spending and the remainder ($136 million) is from special funds. Due to the timing of when budget actions occurred and how DOF reflected these actions in its fiscal documents, some—but not all—of these state operations reductions are reflected in the department totals displayed earlier in Figures 1 and 2.

Scores Some Savings Related to Vacant Positions, With Additional Reductions and Position Eliminations Still Pending. Control Section 4.12 directed savings to be achieved by eliminating vacant positions and associated funding. The budget package scored $108 million in savings from vacant positions at CNRA and CalEPA pursuant to this control section for the 2024-25 fiscal year, but did not permanently eliminate any positions. As shown in the figure, Chapter 4 of 2025 (SB 101, Weiner) made $42 million in reductions pursuant to Control Section 4.12 in 2025-26. These reductions, nearly all from the General Fund, are reflected in the department totals displayed earlier in Figures 1 and 2. Subsequently, AB 102 included language in Control Section 4.12 directing DOF to provide the Legislature with supplementary information prior to making additional funding reductions in 2025-26 or permanently eliminating any vacant positions. Specifically, the Legislature—through the Joint Legislative Budget Committee—has until January 1, 2026, to review and potentially “nonconcur” with the administration’s proposals for permanently eliminating position authority (totaling 874 positions across CNRA and CalEPA departments). Depending on the outcome of that review and decision, DOF could reduce additional spending authority totaling up to $67 million annually from multiple special funds across CNRA and CalEPA departments in 2025-26 and ongoing pursuant to Control Section 4.12.

California Environmental Quality Act (CEQA) Changes and Coastal Act Exemptions

Legislation Modifies Environmental Review Requirements for Urban Housing and Other Projects. Several pieces of budget trailer legislation authorize modifications to the traditional CEQA process in an effort to accelerate housing production and certain other development projects. Specifically, Chapter 22 of 2025 (AB 130, Committee on Budget) exempts qualified urban infill housing projects from CEQA. In addition, it amends the Coastal Act to prevent appeals of local permits for multifamily housing (four or more units) in the coastal zone on the basis of the project being located in a sensitive coastal resource area or not being the principally permitted use. Assembly Bill 130 also shortens coastal zone housing permit review times under the Permit Streamlining Act, generally from 180 to 90 days. Chapter 24 of 2025 (SB 131, Committee on Budget and Fiscal Review) further amends CEQA to require that housing development projects meeting all but one CEQA exemption criteria be reviewed solely on that issue. It also adds CEQA exemptions for various specified types of projects, including certain housing-related rezoning, farmworker housing, advanced manufacturing facilities, high-speed rail facilities, wildfire risk reduction projects, health clinics, day care centers, public parks, and nonmotorized recreational trail facilities. Additionally, it extends for four years (until 2032) an existing CEQA exemption for small disadvantaged community water system or state small water system projects. For more information about how this legislation—as well as Chapter 650 of 2025 (SB 158, Committee on Budget and Fiscal Review), which makes some refinements to the CEQA-related changes—affect housing development, please see our forthcoming post, The 2025-26 California Spending Plan: Housing, Homelessness, and Local Government.

Legislation Eases CEQA and Coastal Act Requirements for Official Olympics-Related Development. Assembly Bill 149 exempts from CEQA the construction of temporary facilities for the 2028 Olympic and Paralympic Games and also exempts any temporary Olympics facility located in the coastal zone from having to obtain a coastal development permit.

Natural Resources

California Natural Resources Agency

The budget provides $273 million from various fund sources to support CNRA in 2025-26, which represents a decrease of $446 million (62 percent) when compared to the revised 2024-25 expenditure level due primarily to the expiration of one-time funds. (This total includes funding the agency receives on behalf of the Ocean Protection Council and Salton Sea Conservancy.) The 2025-26 spending plan appropriates $91 million from Proposition 4 specifically for CNRA, including $47 million for the Urban Greening Program. Additionally, the budget includes a total of $77 million General Fund in 2025-26 for CNRA to coordinate and distribute across a variety of one-time efforts and projects. The largest of these include $13.6 million for restoration efforts at Clear Lake and $10 million for the Museum of Tolerance in Los Angeles.

Department of Forestry and Fire Protection

The budget provides $4.5 billion from various fund sources to support CalFire in 2025-26, which represents a decrease of $667 million (13 percent) when compared to the revised 2024-25 expenditure level. This total includes $305 million and 902 positions in 2025-26 to continue implementing CalFire’s shift to a 66-hour workweek, which is $106 million and 564 positions more than 2024-25. The spending plan also provides $279 million from Proposition 4 to CalFire for various activities (including $14 million each to pass through to the Wildfire Conservancy and Wildfire Foundation). Additionally, as discussed above, CalFire’s budget includes $1 billion from GGRF and a commensurate year-to-year reduction in General Fund. Notable other features of CalFire’s 2025-26 budget include the following:

• Transition of Seasonal Firefighters to Permanent Classification. The budget provides $39 million General Fund in 2025-26, with budget bill language stating the Legislature’s intent to provide $78 million General Fund in 2026-27 and ongoing, for CalFire to begin transitioning some seasonal firefighter positions to a permanent classification. (Subsequent statutory revisions to the language clarified that all seasonal firefighter positions, not only those positions on hand crews, are eligible for this transition.) The language also states the Legislature’s intent to transition the remainder of the seasonal firefighter positions to permanent eventually, subject to future funding and legislation.

• Wildfire County Coordinator Program. The budget includes $9.5 million General Fund in 2025-26 for CalFire to support the California Fire Safe Council’s Wildfire County Coordinator Program. This program supports coordinators in 47 of 58 counties who work with local organizations and residents to improve community wildfire preparedness through education, events, and grant funding.

• Home Hardening Program. The budget provides $3 million General Fund in 2025-26 for a home hardening program at CalFire, subject to future legislation.

• Capital Outlay Projects. The budget includes $260 million—$91.5 million General Fund and $168.5 million in lease revenue bonds—for CalFire capital outlay projects in 2025-26, of which $163 million is newly approved and $97 million was approved as part of previous budget agreements. These projects include $95 million for the Butte Fire Center, $17 million for the Prado Helitack Base, and $11 million for the Macdoel Fire Station. To achieve budget savings, the spending plan also reverts $32 million General Fund that was previously appropriated for the acquisition phase of a new CalFire training center, as highlighted earlier in Figure 4.

Department of Parks and Recreation

The budget provides $1.2 billion from various fund sources to support the Department of Parks and Recreation (Parks) in 2025-26, which represents a decrease of $494 million (28 percent) when compared to the revised 2024-25 expenditure level. This decrease is primarily due to the expiration of one-time funds that were available to Parks in 2024-25. Parks’ budget includes $440 million from Proposition 4 in 2025-26 for three activities: The Statewide Parks Program, reducing climate impacts on disadvantaged communities and expanding outdoor recreation, and deferred maintenance. Notable other features of Parks’ budget include the following:

• California State Parks Library Pass Program. The budget transfers $6.75 million General Fund in 2025-26 to the State Parks and Recreation Fund to continue the California State Parks Library Pass Program until June 30, 2026. The program provides free access to most state parks through passes that can be checked out from public library branches throughout the state.

• Park Restoration and Capital Outlay Projects. The budget appropriates $6 million General Fund in 2025-26 to restore Topanga State Park and Will Rogers State Historic Park, both of which were damaged by the Palisades Fire in January 2025. In addition, the budget includes $23.3 million ($3.6 million General Fund) for capital outlay projects at Parks including $9 million for the California Indian Heritage Center, $4.8 million for R.H. Meyer Memorial State Beach, and $3.6 million for Will Rogers State Historic Park.

• Invasive Mussel Infestation Prevention Program and Increase to Harbors and Watercraft Revolving Fund (HWRF) Fee. Assembly Bill 149 expands the existing state quagga and zebra mussel infestation prevention program to include all invasive mussel species, including the golden mussel. The legislation also increases and renames the existing invasive mussel prevention fee and adjusts it every other year for inflation. This fee revenue is deposited in the HWRF. Because annual expenditures from that fund currently exceed its typical level of revenues, budget bill language requires the administration to develop a proposal no later than January 10, 2027 to keep the HWRF in structural balance on an ongoing basis. Correspondingly, AB 149 affirms the Legislature’s intent to address the HWRF imbalance in subsequent legislation that could include further increases in the invasive mussel prevention fee.

Department of Water Resources

The budget package includes a total of $3 billion from various fund sources to support DWR in 2025-26, including $318 million from the General Fund. (The total also includes roughly $1.4 billion in annual payments from water contractors for DWR’s work on the State Water Project that is continuously appropriated outside of the annual budget act.) The 2025-26 DWR budget is down a net $2 billion (40 percent) from the estimated 2024-25 expenditure level, due primarily to the expiration of one-time funds. Below we discuss several notable changes in the DWR budget.

Appropriates $684 Million in Proposition 4 Funding for Water Resilience Projects. The spending plan appropriates $684 million in 2025-26 out of the nearly $2 billion contained in Proposition 4 for DWR. Appropriations include $232 million for the Dam Safety and Climate Resilience Program, $148 million for Salton Sea projects, $123 million for the Flood Control Subventions Program, $63 million for State Plan of Flood Control projects, $30 million for groundwater management activities, and $8 million for improvement and management of stream gages. For several other programs, the spending plan includes small augmentations to support planning and program design in 2025-26, with project funding to be appropriated in future years.

Includes $14.5 Million General Fund for Flood Management Activities. The spending plan provides $12.5 million in 2025-26 for state operations costs associated with management of urban flood risk reduction projects conducted in collaboration with the U.S. Army Corps of Engineers. The budget package also approves $2 million in both 2025-26 and 2026-27 for the state’s cost share of the Yolo Bypass Comprehensive Study conducted by the Army Corps.

Provides Spending Authority for Salton Sea Projects. The state has received three installments totaling $245 million from the U.S. Bureau of Reclamation as part of the Inflation Reduction Act (2022) for projects at the Salton Sea. Prior years’ budgets provided spending authority for the first two installments. The 2025-26 spending plan provides $178 million in multiyear authority—$100 million in 2025-26, $60 million in 2026-27, $12 million in 2027-28, and $6 million in 2028-29—for the final installment plus a separate $2 million federal reimbursement agreement. In addition, the spending plan allows DWR to receive reimbursements in 2025-26 from CNRA ($8 million from Proposition 68 [2018]) and the California Department of Fish and Wildlife ($3 million from Proposition 84 [2006]) for planning and construction of projects, as well as the aforementioned $148 million appropriation from Proposition 4. While last year’s budget included $1.4 million in ongoing GGRF for DWR staffing costs for Salton Sea restoration projects, the current agreement eliminates this ongoing appropriation beginning in 2025-26.

Reduces Prior General Fund Augmentations by Nearly $80 Million. As noted earlier in Figure 4, the spending plan reduces several prior-year DWR General Fund appropriations to help solve the budget problem. These include $47 million for dam safety, $15 million for systemwide flood risk reduction, $11 million for flood management, and $5 million in the Urban Streams Restoration Program. (The impacts of the first two of these reductions will be somewhat offset by the new appropriations from Proposition 4.) Additionally, beginning in 2025-26, DWR will reduce the frequency with which it publishes a groundwater bulletin (from every five years to every ten), saving $750,000 annually on an ongoing basis.

Reduces Planned GGRF Appropriations for Oroville Pump Storage. The final GGRF spending plan eliminates planned funding for a pump storage project at the Oroville Dam. (This project is intended to allow the facility to use some of its existing pump storage capacity, while limiting the potential adverse environmental impacts associated with pumping.) The project received $10 million from the General Fund in 2023-24 to begin planning and was set to receive $230 million in total from GGRF across three years beginning in 2025-26 for later phases of the project, including construction. This year’s budget package, however, does not include the planned augmentation of $30 million in 2025-26 and does not specifically identify this as a priority for out-year GGRF, meaning that any subsequent support for the project will have to be requested through a future budget process.

Coastal Agencies

State Lands Commission (SLC). The spending plan includes two General Fund appropriations for SLC to carry out legally required activities. First, it provides $12.5 million on a one-time basis for SLC to continue decommissioning activities at Rincon Island in Ventura County, which involves remediation of soil, groundwater, and interstitial water contamination associated with oil and gas production from offshore state leases. The budget agreement also approves $4.1 million in 2025-26, $4.1 million in 2026-27, and $4.4 million in 2027-28 for restoration activities at the Bolsa Chica Lowlands in Orange County. Required activities include tidal inlet dredging and ongoing maintenance and operations.

State Coastal Conservancy (SCC). The spending plan provides SCC with $10.7 million from the Violation Remediation Account and $12 million in reimbursement authority from the State Coastal Conservancy Fund. The former will fund coastal projects—selected in collaboration with the California Coastal Commission (which enforces Coastal Act violations and collects associated penalties)—near where the violations occurred. The latter will allow SCC to receive expected funding from state and federal agencies that will support local grants. The spending plan also appropriates Proposition 4 funding to SCC for a variety of activities, including $63 million for coastal resilience activities, $51 million to support the Great Redwood Trail Agency, and $41 million to support San Francisco Bay restoration projects.

California Coastal Commission. The spending plan approves funding—$565,000 in 2025-26, $1.2 million in 2026-27, and $1.8 million in 2027-28 and ongoing, all from the General Fund—and eight permanent positions for the commission to assist local coastal governments in aligning their Local Coastal Programs (LCPs) with zoning changes in their housing elements within one year (as required by Chapter 282 of 2024 [AB 3093, Ward]. It also provides one-time funding—$107,000 General Fund—to implement Chapter 454 of 2024 (SB 1077, Blakespear), which requires the commission, in collaboration with the Department of Housing and Community Development, to issue guidance for local governments about updating their LCPs to simplify the permitting process for accessory dwelling units in the coastal zone.

San Francisco Bay Conservation and Development Commission (BCDC). The spending plan includes $500,000 in 2025-26 and $55,000 in 2026-27 from the Bay Fill Clean-Up and Abatement Fund to procure an electronic regulatory management system that will allow BCDC to comprehensively track and manage permits, including collecting fees. Associated statutory changes specify that the fund can be used for technology services, programs, and personnel supporting authorized uses of the fund.

California Energy Commission (CEC)

The budget includes a total of $1.4 billion from special funds and federal funds for CEC in 2025-26. This is a significant decrease from the estimated prior-year expenditure level of $2.8 billion, due largely to the expiration of one-time funding. The magnitude of the year-to-year decrease was partially offset by various one-time augmentations made to CEC’s budget in 2025-26, including $275 million from Proposition 4 primarily for offshore wind projects and $40 million from GGRF for heavy-duty ZEV charging infrastructure. As noted above, the budget package does not include $125 million that had been planned for 2025-26 from Proposition 98 General Fund for zero-emission school bus infrastructure. Two other notable modifications to CEC’s budget include the following:

• Provides Authority to Use Various Federal Funds. The budget includes $672 million in Federal Trust Fund expenditure authority and $12 million in reimbursement authority related to the anticipated receipt of various federal grants funded by the Infrastructure Investment and Jobs Act, most notably from the Grid Resilience and Innovation Partnership program.

• Provides Augmentations for Various Energy Projects. The budget includes $9 million from the General Fund for carbon-free energy projects. This includes (1) $5 million to support nuclear fusion projects, including related to the Fusion Research and Development Innovation Initiative; and (2) $4 million for the CADEMO offshore wind project, which is planned off the coast of Point Arguello (near Vandenberg Space Force Base).

Environmental Protection

California Air Resources Board

The spending plan includes a total of $956 million for CARB in 2025-26, almost entirely from special funds. This represents a significant decrease compared to CARB’s estimated expenditure level in 2024-25 of $1.4 billion due to expiration of one-time funding. As noted above, the budget package provides some discretionary GGRF for CARB—including $100 million for the AB 617 Community Air Protection Program—but does not include $375 million that had been planned for 2025-26 from Proposition 98 General Fund for purchasing zero-emission school buses. We discuss some other notable changes to CARB’s 2025-26 budget below.

Funds Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP). The budget includes $132 million from the Air Pollution Control Fund (APCF) for HVIP, which is a program that provides point-of-sale rebates to help reduce the purchase price of zero-emission trucks and buses. This funding is available as a result of a legal settlement between the state and Hino Motors (a subsidiary of Toyota).

Augments Funding for Clean Cars 4 All. In addition to the $25 million in GGRF provided for the Clean Cars 4 All program highlighted previously in Figure 5, in April 2025, the Legislature enacted AB 100 which provided an additional $20 million from the Enhanced Fleet Modernization Account on a one-time basis to support the Clean Cars 4 All program operated by air districts. This included a new appropriation of $17 million and the redirection of $3 million that previously had been provided to support a related program, the Enhanced Fleet Modernization program.

Supports Mobile Source Laboratory Equipment Support and Maintenance. The budget includes $8 million on an ongoing basis from the Certification and Compliance Fund (CCF) to support CARB’s mobile source laboratory in Riverside, which helps ensure that manufacturers meet the state’s emissions standards. This funding will support additional costs for maintenance, service, and training contracts, as well as additional equipment-replacements. The budget package also includes related budget trailer legislation that specifies that the deficiency fines that CARB assesses manufacturers are to be considered fees and deposited into the CCF. This change is expected to enable CCF to support these additional costs.

Extends Support to Implement Carbon Capture Legislation. The budget includes a total of $2 million in 2025-26 from the Cost of Implementation Account (rising to $4 million ongoing) and 18 permanent positions to continue implementing Chapter 359 of 2022 (SB 905, Caballero), which was originally supported with limited-term resources. This legislation requires CARB to establish a Carbon Capture, Removal, Utilization, and Storage Program in order to develop and implement a regulatory framework for carbon capture and storage and carbon dioxide removal technologies.

Supports E15 Fuel Regulation Development and Implementation. The budget includes $2 million from APCF in 2025-26 and ongoing and 10 permanent positions to complete the regulatory process to allow the use of up to 15 percent ethanol in gasoline (known as the E15 fuel blend), as well as to conduct ongoing program implementation and enforcement of potential future E15 regulations. (After the passage of the budget, the Governor signed Chapter 247 of 2025 [AB 30, Alvarez], which authorizes the use of E15 until CARB completes its regulatory process.)

Funds Implementation of Zero-Emission Airport Shuttle (ZEAS) Regulations. The budget includes 10 permanent positions starting in 2025-26 and related funding of $2 million from APCF starting in 2026-27 to support the implementation of the ZEAS regulations. (The Legislature rejected without prejudice funding proposed for the Zero-Emission Forklift and Advanced Clean Fleets regulations in light of the lack of federal waivers required to enforce these regulations.)

Includes Trailer Bill Legislation Related to Regulatory Fee Authority. The budget package includes Chapter 109 (SB 153, Committee on Budget and Fiscal Review), which authorizes CARB to assess fees related to implementing its Transport Refrigeration Unit regulations. (The Legislature did not adopt the broader regulatory fee authority that the administration had initially proposed in January.)

State Water Resources Control Board

The spending plan includes a total of $1.9 billion from all funding sources in 2025-26 for SWRCB, including $74 million from the General Fund. This represents a year-to-year reduction of $574 million, or 24 percent, mostly due to the expiration of prior one-time and bond funding. (As we discuss in our forthcoming post, The 2025-26 California Spending Plan: Housing, Homelessness, and Local Government, the budget package also suspends a number of municipal stormwater permits issued by regional water quality control boards.)

Includes $396 Million From Proposition 4 for Water Resilience Activities. Proposition 4 includes a total of nearly $1.2 billion for six programs administered by SWRCB. The 2025-26 spending plan provides project funding for four of these programs: $183 million for drinking water grants and loans, $11 million for tribal drinking water infrastructure projects, $153 million for water reuse and recycling, and $47 million to address water pollution in California-Mexico cross-border rivers and coastal waters. In addition, the budget approves planning dollars for multibenefit urban stormwater management and water data management.

Covers Groundwater Management Costs With Special Fund Loan. The Sustainable Groundwater Management Act (SGMA) requires SWRCB to pay for its SGMA-related costs with revenues from fees it imposes on groundwater extractors. SWRCB can impose these fees when a groundwater basin has been designated as probationary due to noncompliance with SGMA. Although SWRCB has designated two basins—Tulare and Tule—as probationary, it has not yet been able to collect fees. To bridge the gap, the spending plan authorizes a loan of $16.4 million over three years (about $5.5 million per year) from the Underground Storage Tank Cleanup Fund to SWRCB’s SGMA program to support 22 existing positions. The loan must be repaid (with future fee revenues or General Fund) within four years.

Supports SWRCB’s Staffing Costs to Regulate Small Water Systems in Monterey County. The County of Monterey’s local primacy agency delegation for regulating public small water systems was recently terminated, meaning SWRCB must take over these responsibilities. The spending plan includes $2.7 million annually from the Safe Drinking Water Account beginning in 2025-26 and 12 permanent positions to carry out this regulatory program.

Reduces Prior-Year General Fund Spending and Planned GGRF Augmentations. As noted earlier, the spending plan reduces 2024-25 General Fund spending on water recycling by $51 million as part of the effort to resolve the state’s budget deficit. It also does not include previously planned 2025-26 GGRF augmentations of $15 million for water recycling and groundwater cleanup and $30 million for drinking water and wastewater. The impacts of all three of these modifications are offset to some degree by the new Proposition 4 spending.

Department of Toxic Substances Control

The budget provides $448 million from various fund sources to support DTSC in 2025-26. This reflects a $166 million (27 percent) decrease when compared to the estimated 2024-25 expenditure level. The decrease is largely associated with the expiration of one-time General Fund that DTSC received to address brownfields across the state and for cleanup activities related to the Exide facility in the City of Vernon.

Repurposes Exide Facility Closure and Cleanup Funding. The budget reverts $75 million that remains from a $132 million General Fund loan provided to DTSC in 2021-22 for cleanup activities at the Exide facility. The budget provides one-time funding to replace the reverted amount, which consists of (1) a new $40 million General Fund loan and (2) $35 million from the Lead-Acid Battery Cleanup Fund. (This results in a net savings of $35 million to the General Fund.) Budget bill language also expands the allowable use of this funding to support cleanup activities at both the Exide facility as well as the surrounding residential communities.