Overview

• Gov. Gavin Newsom’s 2025-26 budget proposal includes extending California’s cap-and-trade program to 2045, a key tool for reducing greenhouse gas emissions.
• The plan allocates $1.54 billion to Cal Fire for wildfire prevention and control, amounting to over a third of the agency’s budget.
• At least $1 billion annually from cap-and-trade revenues would be directed toward the high-speed rail project, which has faced delays and cost overruns.
• Critics, including lawmakers and environmental justice groups, argue the reallocation could underfund critical programs such as clean drinking water, extreme heat mitigation, and local transit projects.
• By tying the cap-and-trade extension to the budget bill, Newsom could expedite legislative approval, but concerns over reduced oversight and revenue sufficiency persist.