What Would the Measure Do?

Proposition 4 would authorize the state to issue $10 billion in general obligation bonds to finance projects that reduce fire risk and restore fire-damaged areas; restore and protect watersheds, wetlands, and coastal resources; reduce climate impacts on vulnerable communities; and improve the resiliency of the state’s water supplies and agricultural lands.

The Fourth Climate Change Assessment, an interagency report published by the state, found that Californians are already suffering major climate change impacts, including severe droughts, floods, wildfires, sea level rise, and extreme heat.¹ Prop. 4 would provide loans and grants to local governments, Native American tribes, nonprofits, businesses, and state agencies for

• Drought, flood, and water supply projects to increase water supply and quality, repair dams, and capture and reuse stormwater ($3.8 billion)
• Wildfire prevention projects to manage forests and vegetation to reduce the risk of wildfires ($1.5 billion)
• Sea level rise and coastal restoration activities to restore coastal areas and wetlands ($1.2 billion)
• Land conservation and habitat restoration, including efforts to protect open space and wildlife habitat ($1.2 billion)
• Clean energy projects to support development of wind turbines and electric transmission lines ($850 million)
• Recreational opportunities and maintenance at local and state parks ($700 million)
• Extreme heat reduction projects to plant trees and establish cooling centers and community resilience hubs ($450 million)
• Farms and agriculture projects to encourage farmers to implement more sustainable practices ($300 million)

General obligation bonds are how the state government borrows money. Bonds must be repaid, with interest, over a period of time, usually 20 to 40 years. Bonds are not new taxes on state residents. Presently, California is paying about $6 billion per year to repay bonds.² Prop. 4 will increase costs by about $400 million per year for 40 years for debt repayment. According to the California Legislative Analyst’s Office, $400 million is equivalent to less than 0.5% of the state’s total General Fund budget.³ The bond also includes annual independent audits on funding and full transparency on all spending.

The Backstory

California is experiencing a wide range of climate impacts. The last seven years were the state’s hottest years on record.⁴ Droughts are not uncommon for California’s arid climate, but the three-year period between the beginning of 2020 and fall 2022 was the driest on record.⁵ Hotter temperatures and prolonged drought conditions have extended the state’s wildfire season and blazes have become more intense. In 2020, 4.3 million acres burned; in 2021, 2.5 million acres burned.⁶ At the coast, flooding exacerbated by sea level rise threatens nearly half a million people, $100 billion in property, and 3,500 miles of roads.

Since 2014, the state has spent an average of $13 billion annually on natural resources and climate programs, with about 15 percent coming from bonds.⁷ In 2022, California harnessed a budget surplus to allocate approximately $54 billion to a comprehensive suite of climate and environment programs. However, as economic conditions shifted, fiscal adjustments resulted in a 7% reduction in the climate program budget, bringing the total to $48.3 billion over seven years. With Governor Newsom scaling back funding for climate programs, a broad coalition of 180 organizations including clean energy, environmental justice, and ecological groups, came together to advocate for a climate bond.

In July 2024, the Senate approved $10 billion, putting California Prop. 4 on the ballot. The measure requires a simple majority (50 percent plus one vote) to pass.

Equity Impacts

The bond measure ensures that a minimum of 40% of the bond funding (about $4 billion) will go toward programs and projects in disadvantaged communities, where the median household income is less than 80% of the area average or statewide median. These programs and projects include restoring $150 million for the Transformative Climate Communities (TCC) program, a program that provides grant funding for development and infrastructure projects that achieve major environmental, health, and economic benefits in California’s most disadvantaged communities. Locally, TCC provided $28.2 million for an East Oakland-based program called Better Neighborhoods, Same Neighbors, which has contributed to neighborhood improvement projects such as affordable housing, urban farming, and neighborhood greening, without residential displacement.

Pros

• According to recent research, nearly one million Californians lack access to clean drinking water.⁸ These failing water systems are generally located in low-income, disadvantaged communities, primarily in the Central Valley. Without access to clean tap water, residents are forced to purchase more expensive bottled water.⁹ Improvements in drinking water infrastructure, funded by the bond, will improve drinking water access and could reduce water costs for Californian’s most vulnerable residents.
• In 2023, the Bay Conservation and Development Commission released a report that estimated the cost of protecting the Bay Area from sea level rise and storm surge impacts by 2050 at $110 billion.¹⁰ The report also estimated the cost of inaction — not protecting against sea level rise now — to be over $230 billion. In the case of sea level rise in the Bay Area, inaction could more than double taxpayer costs. The bond will help the state shift from a disaster response strategy to a prevention strategy, which could save the state, local governments, and California residents billions of dollars in avoided disaster recovery costs including property damages and increased insurance rates. Although the measure’s projected annual cost may seem high, funding urgent priorities such as flood protection, wildfire prevention, and energy infrastructure investments could save Californians much more in the long term.

Cons

• Bond repayment will cost the state about $400 million annually for 40 years.¹¹