California Lawmakers Tackle Climate Fund and Key Deals in Final Session

State legislators have returned to Sacramento to negotiate a slate of five high‑profile deals before the session ends on Aug. 31. The centerpiece of the talks is the Greenhouse Gas Reduction Fund, the state's main climate financing mechanism. Governor Gavin Newsom and Democratic leaders have yet to reach an agreement on how to allocate the fund, which historically generates about $4 billion a year but could see revenues cut by half under the administration's new climate rules.

Legislative leaders have earmarked $115 million for Newsom‑backed electric‑vehicle incentives and $1.25 billion to shore up the state fire department’s budget. Funding for the controversial high‑speed rail project, slated to receive $1 billion annually through 2045, remains in jeopardy, as do resources for safe drinking water, affordable housing and transit. Negotiations on Proposition 4, the voter‑approved $10 billion bond for climate projects, have also been postponed.

Senate President Pro Tem Monique Limón and Assembly Budget Committee Chair Jesse Gabriel are among the officials steering the discussions, which are expected to take place largely behind closed doors as lawmakers prepare to head to the campaign trail.