DTSC’s Cleanup in Vulnerable Communities Initiative Threatened by Potential Budget Cuts

By Amilia Glikman, Lobbyist

In 2021, as part of a multi-pronged reform effort, the Department of Toxic Substances Control (DTSC) received a $500 million appropriation to establish the Cleanup in Vulnerable Communities Initiative. The largest of the initiative’s core programs—the Equitable Community Revitalization Grant (ECRG) program—was intended to award approximately $250 million in “grants to incentivize cleanup and investment in disadvantaged areas of California.”[1] In Round 1, DTSC awarded $75.4 million in grants to 53 recipients for the assessment, investigation, and cleanup of 83 sites throughout California.[2] DTSC recently announced in May 2024 that it had awarded $41 million in grants to 32 recipients as part of Round 2.[3]

Cleanup in Vulnerable Communities Initiative Faces an Unclear Future

In January 2024, DTSC Director Meredith Williams reported to the Board of Environmental Safety that “Round 2 will be reopened to accept applications on a rolling basis in mid- to late-2024, pending management approval.”[4] The status of Round 2, and the future of the ECRG program and the larger Cleanup in Vulnerable Communities Initiative, however, is uncertain given Governor Newsom’s recently released May Revise Budget. Addressing a total estimated budget deficit of approximately $55 billion,[5] Governor Newsom proposed a number of cuts to state programs, including the Cleanup in Vulnerable Communities Initiative.

If the Legislature adopts the Governor’s proposal, the Cleanup in Vulnerable Communities Initiative will see reductions of $136 million in fiscal year (FY) 2023–24 (the current fiscal year), $85 million in FY 2024–25, and $47.5 million in FY 2025-26. The source of remaining funding for the program would shift from the General Fund to the Greenhouse Gas Reduction Fund (GGRF). The initiative would receive $65 million in funding in FY 2024-25 and $42.5 million in FY 2025-26 from the GGRF.[6]

Total funding cuts amount to $268.5 million over four years, although the Governor’s proposal preserves $107.5 million over three years for the program through a fund shift from the General Fund to the GGRF. Overall, this is a significant reduction in funding from the original $500 million appropriation. It is unclear exactly how these budget cuts will impact current grant recipients or future grant awards in the near term, although one would reasonably expect that many more brownfield sites would be left in their current blighted and idled state. More uncertain are longer term impacts on brownfield redevelopment, disadvantaged communities, and the state’s affordable housing and climate change policies.

What’s next?

Constitutionally, the California Legislature is required to pass a budget by June 15, 2024. The severity of the current state budget crisis increases the likelihood that the Legislature will approve the cuts to the Cleanup in Vulnerable Communities Initiative proposed by Governor Newsom, but even if the Legislature chooses to modify the Governor’s proposal, significant cuts to this program seem inevitable given the estimated budget deficit.

Questions?

For questions about DTSC’s Cleanup in Vulnerable Communities Initiative, contact KP Public Affairs’ environmental regulatory consulting and advocacy professionals: Jeff Sickenger (jsickenger@ka-pow.com), Amilia Glikman (aglikman@ka-pow.com), and Olivia Wright (owright@ka-pow.com).

Sources

[1] DTSC, Equitable Community Revitalization Grant, https://dtsc.ca.gov/ecrg/ (accessed May 18, 2024).

[2] DTSC, Equitable Community Revitalization Grant Awardee Data – June 2022, https://dtsc.ca.gov/wp-content/uploads/sites/31/2022/06/ECRG-Final-Data-2022.pdf (accessed May 18, 2024).

[3] Detailed Round 2 grant awardee data not yet available.

[4] DTSC, 2024 DTSC Director’s Priorities (Jan. 16, 2024), https://bes.dtsc.ca.gov/wp-content/uploads/sites/42/2024/01/01162024-Item-4d-January-16-Annual-Priorities-Update-ADA.pdf (accessed May 18, 2024).

[5] Legislative Analyst’s Office, The 20225 Budget: Initial Comments on the Governor’s May Revision (May 17, 20204), https://lao.ca.gov/Publications/Report/4902 (accessed May 19, 2024).

[6] Gavin Newsom, Governor, May Revision (May 2024), https://ebudget.ca.gov/2024-25/pdf/Revised/BudgetSummary/FullBudgetSummary.pdf (accessed May 23, 2024); Department of Finance, Amendment to and Addition of Various Budget Bill Items, Statutory Changes, Support, Department of Toxic Substances Control (May 14, 2024), https://dof.ca.gov/wp-content/uploads/sites/352/2024/05/EPA.pdf (accessed May 23, 2024).