The 2022-23 Budget: Wildfire and Forest Resilience Package

2022-23 BUDGET The 2022-23 Budget: Wildfire and Forest Resilience Package Summary In this brief, we provide our initial assessment and recommendations on the Governor’s proposed wildfire and forest resilience package, based on the information available at the time the brief was prepared. We may provide additional analyses as additional information becomes available from the administration. Governor Proposes $1.2 Billion Over Two Years, Including $800 Million in New Funding. The Governor proposes $800 million from the General Fund over two years—$400 million in 2022-23 and 2023-24—to implement various efforts to improve forest health and make communities more resilient to future wildfires. This is in addition to $200 million that is continuously appropriated from the Greenhouse Gas Reduction Fund (GGRF) from 2022-23 through 2028-29, consistent with the 2021-22 budget package. The Governor’s proposal includes augmentations for roughly 30 programs across a total of 15 state agencies. A few of these programs are new, but most of them received prior funding as part of wildfire and forest resilience budget packages approved by the Legislature in 2021, which provided one-time funding in 2020-21 and 2021-22. Assessment. Overall, we find that continued focus on wildfire prevention and mitigation activities has merit given the worsening pattern of large and severe wildfires in recent years. However, we note that in many cases, departments are still implementing the funding from the prior wildfire and forest resilience packages and that information on the outcomes from those funds is limited. We also find that legislative guidance could improve the implementation of some programs proposed for funding. We also find that while the new programs proposed for funding are aimed at addressing important issues, key details on how these programs would be structured and the rationale for the proposed funding amounts are lacking. We further find that there are trade-offs associated with the Governor’s two-year funding approach, since some activities require ongoing funding to be effective and others lack adequate information to assess the amount of funding that will be required in 2023-24. Finally, we find that robust legislative oversight in this area remains essential. Recommendations. Based on our assessment, we provide several recommendations. Specifically, we recommend that the Legislature consider whether the total level of funding proposed, as well as the specific mix among programs, is consistent with legislative priorities. We also recommend that the Legislature provide statutory guidance to inform program implementation, as appropriate. We further recommend that the Legislature defer action on the proposed package until the spring when additional information should be available on the pace of spending and outcomes from the prior budget packages to inform its decisions. Additionally, we recommend that the Legislature consider alternatives to a two-year funding plan, such as providing ongoing or one year of funding in certain cases. Finally, we recommend that the Legislature continue its oversight activities in this area. GABRIEL PETEK | LEGISLATIVE ANALYST JANUARY 2022 www.lao.ca.gov 1 2022-23 BUDGET Introduction proposals as part of the January budget that are not covered in this brief. This Brief Provides Our Initial Comments. This brief is designed to provide the Legislature Brief Includes Four Main Sections. This with a clearer understanding of what is contained brief consists of four main sections. First, we in the Governor’s wildfire and forest resilience provide background on wildfires in California, as package, as well as our initial assessment and well as recent state funding for wildfire and forest recommendations to help guide legislative resilience. Second, we summarize the Governor’s deliberations. We may provide additional analysis, proposed wildfire and forest resilience package. comments, and recommendations, as relevant, Third, we provide an initial assessment of the in the coming weeks as additional information package based on the information available at becomes available from the administration. We also the time of the preparation of this brief. Finally, we note that, in addition to this package, the Governor provide recommendations for the Legislature as it is proposing a number of other wildfire-related considers the Governor’s proposed package. BACKGROUND Wildfires in California the Camp Fire in Butte County, which became the single most destructive wildfire in state history with Wildfires Are a Natural Part of California’s nearly 19,000 structures destroyed and 85 fatalities, Ecosystems. Historically, significant parts of the including the near-total destruction of the town of state would burn annually, especially during the Paradise. A few key factors have contributed to the warm, dry months of the year. Many species native recent increase in destructive wildfires, including to California adapted to these regular, low- and climate change, poor forest and land management moderate-intensity wildfires. These regular fires practices, and increased development in played an important role in keeping the state’s fire-prone areas. forests and landscapes healthy by periodically clearing underbrush and contributing to regrowth of native plant species. Severe Wildfires Are a Large Figure 1 and Growing Problem. While Most of the Largest and Most Destructive wildfires have potential benefits, Wildfires Have Occurred in Recent Decades they can also be highly problematic when they are much more severe than they would be naturally 9 and threaten lives and property. 8 In recent years, California has 20 Largest 7 experienced a growing number 20 Most Destructive of these problematic wildfires. 6 As Figure 1 shows, most of 5 California’s largest and most 4 destructive wildfires have occurred 3 in recent decades. This trend has 2 been particularly notable in the last 1 few years, which have seen some of the worst wildfires in the state’s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s 2020sa recorded history. For example, the 2018 wildfire season included a Includes wildfires that occurred in 2020 and 2021. 2 LEGISLATIVE ANALYST’S OFFICE 2022-23 BUDGET Recent State Funding for Wildfires (For additional information on these programs, see our February 2021 publication, The 2021-22 State Spending on Wildfires Has Grown Budget: Wildfire Resilience Package—Analysis of Substantially in Recent Years. In response to Individual Programs.) Of the total funding for the recent severe wildfire seasons and growing wildfire package, $411 million was from the General Fund risks, the state has augmented funding for various and $125 million was from GGRF. The amounts wildfire-related activities, including those related from GGRF were intended to bring total GGRF to wildfire response and resilience. Specifically, spending on forest health and prescribed fire as shown in Figure 2, the California Department activities to $200 million annually, consistent with of Forestry and Fire Protection’s (CalFire’s) total the requirements in SB 901. (The 2020-21 Budget funding for fire protection, resource management, Act provided less than the statutory direction and fire prevention has grown from $800 million in because of uncertainty about the amount of GGRF 2005-06 to an estimated $3.7 billion in 2021-22. revenues at the time the budget act was adopted in (The resource management and fire prevention June 2020.) Most of the funding in the early action funding is generally intended to improve the package was provided to expand existing programs state’s resilience to wildfires through reducing the rather than to create new programs. The adoption likelihood that wildfires will occur and lessening the of the package through early action was intended damage that wildfires cause when they do occur.) to enable departments to start work immediately on Notably, funding for resource management and projects rather than waiting until the passage of the fire prevention makes up a relatively small—but 2021-22 budget. By starting work immediately, the generally increasing—share of the department’s administration anticipated that projects would be funding. Recent increases in this funding have been in place roughly one fire season sooner than they driven by two main factors. First, Chapter 626 of would have been otherwise. 2018 (SB 901, Dodd) required that $200 million from the Greenhouse Gas Reduction Fund (GGRF) be 2021-22 Budget Provided Additional Funding spent on forest health and fire prevention activities for Wildfire Resilience. The 2021-22 budget— annually through 2023-24. Second, the passage of as amended in September 2021—provided a two major wildfire and forest resilience packages total of $988 million on a one-time basis for in 2021 provided a significant amount of one-time various departments to implement a package funding for wildfire resilience, as we discuss of proposals focused on wildfire prevention further below. and improving landscape health. The package Early Action Package Provided Funding for Wildfire Figure 2 Resilience. On April 13, 2021, the Governor signed Chapter 14 State Spending on CalFire Has Grown of 2021 (SB 85, Committee on (In Millions) Budget and Fiscal Review), which amended the 2020-21 Budget $4,000 Act to provide additional funding 3,500 for a package of various wildfire Resource Management 3,000 and Fire Prevention and forest resilience proposals. 2,500 (We refer to this package as 2,000 Emergency the “early action” package in Fire Suppression 1,500 this brief.) As shown in Figure 3 1,000 on the next page, the package included $536 million on a one-time 500 Base Fire Protection basis in 2020-21 for roughly 2005-06 2007-08 2009-10 2011-12 2013-14 2015-16 2017-18 2019-20 2021-22 two dozen different programs managed by 14 departments. CalFire = California Department of Forestry and Fire Protection. www.lao.ca.gov 3 2022-23 BUDGET Figure 3 Previous Wildfire and Forest Resilience Package Appropriations and Commitments Commitments as of December 2, 2021 (Dollars in Millions) Early Action for 2020-21 2021-22 Budget Percent Percent Program Department Appropriated Committed Appropriated Committed Resilient Forests and Landscapes $214 93% $402 4% Forest Health Program CalFire $155 100% $159 — Stewardship of state-owned land Parks 15 100 105 — Stewardship of state-owned land CDFW 15 100 40 39% Forest Improvement Program CalFire 10 80 40 — Urban forestry CalFire 10 — 20 — Tribal engagement CalFire 1 — 19 — Forest Legacy Program CalFire 6 100 10 — Reforestation nursery CalFire 2 — 9 — Wildfire Fuel Breaks $148 100% $236 11% Fire prevention grants CalFire $123 100% $120 — Prescribed fire and hand crews CalFire 15 100 35 — CalFire unit fire prevention projects CalFire 10 100 40 — Forestry Corps and residential centers CCC — — 27 99% Contract counties CalFire — — 14 — Regional Capacity $119 93% $199 4% Regional Forest and Fire Capacity Program DOC $50 90% $60 — Project implementation SNC 20 100 50 — Project implementation TC 1 100 36 — Project implementation SMMC 12 98 15 55% Project implementation RMC 12 71 15 — Project implementation SDRC 12 100 13 5 Project implementation SCC 12 100 10 — Science-Based Management $3 100% $79 21% Remote sensing CNRA — — $25 — Monitoring, research, and management CalFire $3 100% 20 82% Prescribed Fire Liability Pilot CalFire — — 20 — Interagency data hub CalFire — — 10 — Permit efficiencies CARB — — 2 — Permit efficiencies SWRCB — — 2 — Forest Sector Economic Stimulus $25 12% $51 — Climate Catalyst Fund and market strategy Ibank, Go-Biz $16 — $33 — Workforce development CalFire, CWDB 6 — 18 — Market development OPR 3 100% — — Community Hardening $27 19% $20 — Home hardening OES, CalFire $25 12% — — Defensible space inspectors CalFire 2 100 $13 — Land use planning and public education UC ANR, CalFire — — 7 — Totals $536 87% $988 7% CalFire = California Department of Forestry and Fire Protection; Parks = Department of Parks and Recreation; CDFW = California Department of Fish and Wildlife; CCC = California Conservation Corps; DOC = Department of Conservation; SNC = Sierra Nevada Conservancy; TC = Tahoe Conservancy; SMMC = Santa Monica Mountains Conservancy; RMC = San Gabriel & Lower LA Rivers & Mountains Conservancy; SDRC = San Diego River Conservancy; SCC = State Coastal Conservancy; CNRA = California Natural Resources Agency; CARB = California Air Resources Board; SWRCB = State Water Resources Control Board; IBank = California Infrastructure and Economic Development Bank; Go-Biz = Governor’s Office of Business and Economic Development; CWDB = California Workforce Development Board; OPR = Office of Planning and Research; OES = Office of Emergency Services; and UC ANR = University of California Agriculture and Natural Resources. 4 LEGISLATIVE ANALYST’S OFFICE 2022-23 BUDGET included $758 million from the General Fund and Most Early Action Funding and Some 2021-22 $230 million from GGRF for roughly 30 different Funding Has Been Committed. As shown in programs managed by 18 departments. In general, Figure 3, as of December 2021, the administration this package funded a similar mix of programs reported that 87 percent of the funding provided that were funded in the early action package. in the early action package had been committed. The 2021-22 budget also included language Additionally, 7 percent of the 2021-22 funding continuously appropriating $200 million annually had been committed. (Funding is considered for forest health and wildfire prevention from committed when it has been allocated to specific 2022-23 through 2028-29. Additionally, the budget projects or activities. However, in some cases, included language requiring the administration to it can take a few years to complete the funded report certain information—such as a summary of projects or activities.) Notably, some programs projects that received funding and the average cost have committed a greater share of their funding to per project—annually on all the wildfire and forest projects to date than others. Some of the programs resilience programs that were funded in the early that have been relatively slow to commit funds action and 2021-22 budget packages. The first have been newer programs that have taken time of these required reports is due to the Legislature to launch, such as the pilot program that supports on April 1, 2022, and reports are due annually home hardening retrofits and the Climate Catalyst thereafter until April 1, 2026. Fund. (The home hardening retrofit program was established consistent with Chapter 391 of 2019 [AB 38, Wood].) GOVERNOR’S PROPOSAL Proposes $1.2 Billion Over Two Years, categories is similar to the approach taken in the Including $800 Million in New Funding. The early action and 2021-22 packages. Governor proposes $800 million from the General Most Funding Targeted to Programs Funded Fund over two years—$400 million annually in in Prior Packages. Most of the proposed funding 2022-23 and 2023-24—to implement various efforts would go towards programs that already received to improve forest health and make communities funding as part of the early action or 2021-22 more resilient to future wildfires. This is in addition budget package. However, the Governor proposes to $200 million that is continuously appropriated to fund a few programs that did not previously from GGRF in each of these years, consistent with receive funding. These programs include: the 2021-22 budget package. • Post-Fire Reforestation—CalFire Largest Share of Funds for Forest ($50 Million in 2022-23 and $50 Million in Resilience and Fuel Breaks. As shown in 2023-24). This funding would support the Figure 4 on the next page, roughly half of the reforestation of areas affected by wildfires funds over the two years—$582 million—would with the goal of reducing the likelihood of type support programs designed to promote healthy conversion. (Type conversion is when forests forests and landscapes, generally by removing do not return to their previous condition after hazardous fuels. Another roughly one-third of the severe wildfires, but instead transition to other funds—$382 million—would support installation vegetation types, such as scrubs or grasses.) and maintenance of wildfire fuel breaks. The • Stewardship of State-Owned Land— remaining funds—totaling $236 million—are California Natural Resources Agency proposed for projects to provide regional capacity (CNRA) ($15 Million in 2022-23 and for forest health projects, as well as to encourage $15 Million in 2023-24). This funding forest sector economic stimulus, science-based would support wildfire resilience on forest management, and community hardening. state-owned land. This proposed allocation of funds across program www.lao.ca.gov 5 2022-23 BUDGET Figure 4 Governor’s Proposed Wildfire and Forest Resilience Package (In Millions) Program Department 2022-23 2023-24 Total Resilient Forests and Landscapes $292 $290 $582 Forest Health Program CalFire $120 $120 $240 Post-fire reforestation CalFire 50 50 100 Stewardship of state-owned land CDFW 30 30 60 Stewardship of state-owned land Parks 20 20 40 Forest Legacy Program CalFire 14 19 33 Urban forestry CalFire 20 10 30 Stewardship of state-owned land CNRA 15 15 30 Forest Improvement Program CalFire 11 14 25 Tribal engagement CalFire 10 10 20 Reforestation nursery CalFire 2 2 4 Wildfire Fuel Breaks $190 $192 $382 Fire prevention grants CalFire $115 $117 $232 Prescribed fire and hand crews CalFire 35 35 70 CalFire unit fire prevention projects CalFire 20 20 40 Forestry Corps and residential centers CCC 20 20 40 Regional Capacity $55 $55 $110 Regional Forest and Fire Capacity Program DOC $20 $20 $40 Project implementation SNC 13 12 25 Project implementation SCC 10 10 20 Project implementation SMMC 5 5 10 Project implementation TC 5 5 10 Project implementation SDRC 2 3 5 Community Hardening $22 $22 $44 Home hardening OES, CalFire $13 $12 $25 Defensible space inspectors CalFire 5 5 10 Land use planning and public education UC ANR, CalFire 4 5 9 Forest Sector Economic Stimulus $22 $22 $44 Workforce development CalFire, CWDB $15 $15 $30 Woody biomass transportation CalFire 5 5 10 Market development OPR 2 2 4 Science-Based Management $19 $19 $38 Monitoring, research, and management CalFire $7 $8 $15 State demonstration forests CalFire 5 5 10 Remote sensing CNRA 3 2 5 Permit efficiencies CARB 2 2 4 Permit efficiencies SWRCB 2 2 4 Totals $600 $600 $1,200 By Fund Source General Fund $400 $400 $800 Greenhouse Gas Reduction Fund 200 200 400 CalFire = California Department of Forestry and Fire Protection; CDFW = California Department of Fish and Wildlife; Parks = Department of Parks and Recreation; CNRA = California Natural Resources Agency; CCC = California Conservation Corps; DOC = Department of Conservation; SNC = Sierra Nevada Conservancy; SCC = State Coastal Conservancy; SMMC = Santa Monica Mountains Conservancy; TC = Tahoe Conservancy; SDRC = San Diego River Conservancy; OES = Office of Emergency Services; UC ANR = University of California Agriculture and Natural Resources; CWDB = California Workforce Development Board; OPR = Office of Planning and Research; CARB = California Air Resources Board; and SWRCB = State Water Resources Control Board. 6 LEGISLATIVE ANALYST’S OFFICE 2022-23 BUDGET • Woody Biomass Transportation Subsidy— Funding for Most Programs Allocated Equally CalFire ($5 Million in 2022-23 and Between the Two Years. For most programs, the $5 Million in 2023-24). This funding would funding is proposed to be allocated roughly evenly implement, on a pilot basis, a subsidy program between 2022-23 and 2023-24. Based on our for transporting woody biomass to encourage discussions with the administration, it is our general the transportation of dead trees to wood understanding that all of the proposed funding for processing businesses. 2022-23 is expected to be committed to projects • State Demonstration Forests—CalFire that year, and all the 2023-24 funding is expected ($5 Million in 2022-23 and $5 Million in to be committed to projects that year. Although, as 2023-24). This funding would support state previously mentioned, it could take a few years for demonstration forests, which provide applied funded projects to be completed. research on forest-related issues. ASSESSMENT In this section of the brief, we offer our initial contributors to wildfire risk. For example, forest comments on the Governor’s wildfire and forest health and fuel break programs could reduce the risk resilience package to inform the Legislature’s budget of rapid wildfire spread, community hardening could deliberations. We may have further comments reduce the number of properties severely damaged as additional information from the administration when wildfires do occur, and research could help becomes available in the coming weeks. the state better target future funding to the most Continued Focus on Wildfire Prevention cost-effective strategies and/or where risks are and Mitigation Has Merit. We find that increased determined to be greatest. budget support for programs that attempt to reduce Departments Still Implementing Funding From the risks associated with wildfires is merited given Prior Packages. Most of the funding proposed the increasing pattern of severe wildfires in recent by the Governor would support programs that decades and the major consequences of these received funding in the early action and 2021-22 fires on local communities and the broader state. wildfire and forest resilience packages. In most Notably, the Legislature took important steps cases, implementing departments have made toward addressing these risks with the passage of significant progress in committing early action funds the early action and 2021-22 packages, as well as to projects. Specifically, as of December 2021, only the continuous appropriation of GGRF for forest $68 million of the $536 million provided (13 percent) health and wildfire prevention through 2028-29. was uncommitted. However, most of the 2021-22 However, the scale of the effort that will likely be wildfire and forest resilience package funding required to make the state resilient to wildfires is so remains uncommitted. Notably, as of December large—involving treating millions of acres and better 2021, $920 million of the $988 million provided protecting millions of homes in high fire-risk areas in 2021-22 (93 percent) was not committed. The over the coming years—that it will take additional slower pace of committing 2021-22 funding is not funding to accomplish. Additional funding for unexpected given that the funding was approved these types of activities, such as proposed by the less than six months ago and was envisioned to be Governor, will help continue this worthwhile work. used over a period of multiple years. However, given Myriad of Risks Warrants Consideration the significant amount of funding left uncommitted to of Multiple Strategies. The proposed package date, a key consideration for the Legislature will be includes a mix of programs designed to reduce the extent to which implementing agencies, and their future wildfire risks and damages. Many of these partners, have capacity to administer the proposed programs could be useful in addressing the varied funding and undertake the proposed program expansions in a timely manner. www.lao.ca.gov 7 2022-23 BUDGET Information on Outcomes Is Limited. Many the department to meet its goal of inspecting every of the activities proposed for funding are widely parcel at least once every three years, we also considered good practices to reduce wildfire found that ensuring that a staffing plan is developed risks, particularly reduction of hazardous fuels, would be important to make sure that the funding is defensible space, and home hardening. However, allocated in a way that achieves this goal in all units. the available information on the cost-effectiveness New Programs Aimed at Addressing of many programs is somewhat limited—making Important Issues, but Key Details Lacking. The it difficult for the Legislature to know whether the proposed new programs address worthwhile areas Governor’s proposed package represents the most of focus, but at the time of this analysis there was effective way to allocate funds for wildfire prevention insufficient detail provided on these programs to fully and mitigation. Also, while the administration has evaluate their merits. identified the projects to which they had committed • Post-Fire Reforestation. Providing funding for funding as of December 2021, information on the reforestation would help reduce the likelihood specific outcomes achieved and the associated of type conversion and promote long-term costs is not yet available. We note that a summary of landscape health. However, the administration the funded projects and program costs is required to has not provided at this time key details on be included in the administration’s annual report to the proposed program, such as what specific the Legislature, the first of which is due in April 2022. activities the funding would support, the Additionally, AB 38 required a report assessing rationale for the proposed funding amount, and the cost-effectiveness of defensible space and the anticipated outcomes of the funding. This home hardening compared to other activities to be information is necessary for the Legislature to completed by 2024. These required reports should fully evaluate whether the proposed approach help inform future legislative decisions on how and funding amount are appropriate. much to spend on various potential approaches to • CNRA State-Owned Land. Making reducing wildfire risks. state-owned land more resilient to wildfires Legislative Guidance Could Improve is an important goal. However, it currently is Implementation of Some Programs. In some not clear what specific types of activities and cases, the programs proposed for funding could projects the proposed funding would support benefit from additional guidance from the Legislature and how this funding would complement to ensure that they are implemented in the most or duplicate efforts to steward state-owned effective manner. For example, in our December land through other agencies, such as the 2021 report, An Initial Review of the Regional Forest Department of Parks and Recreation, and Fire Capacity Program, we found that the lack Department of Fish and Wildlife, and the of state requirements for regional priority plans has Tahoe Conservancy. led to a disjointed approach to the Regional Forest • Woody Biomass Transportation Subsidy. and Fire Capacity program and that the lack of data The accumulation of woody biomass, such collection and reporting makes it difficult to evaluate as due to recent wildfires, is a significant the program. Accordingly, we recommended that issue that merits attention. This is because, the Legislature create requirements for regional in some cases, it is not economically viable to priority plans and adopt evaluation and reporting transport this woody biomass to processing requirements. Additionally, in our September 2021 facilities. However, leaving biomass in place or report, Reducing the Destructiveness of Wildfires: burning it has significant negative impacts that Promoting Defensible Space in California, we found extend beyond the individual property owner, that defensible space inspection rates varied widely including potentially elevating wildfire risks and by CalFire unit (from 6 percent to 96 percent in generating additional emissions. Accordingly, 2019-20). Accordingly, while we found that providing it appears generally reasonable for the state to additional ongoing staff for CalFire to conduct help address this issue by providing some level defensible space inspections is merited to enable of financial support to incentivize the transfer of 8 LEGISLATIVE ANALYST’S OFFICE 2022-23 BUDGET biomass to processing businesses. However, information would be particularly important for key details about how a subsidy would be programs that have been slow thus far to commit implemented were lacking at the time of this funding, since another year of information could analysis. For example, it is unclear who would provide the Legislature with a clearer sense of the be eligible for subsidies, how the amount of program’s capacity to utilize additional funds and the the subsidy would be determined, and how results that might be expected from additional funds. the outcomes of the pilot would be tracked Second, some programs will require ongoing and reported to the Legislature. These and support to be effective. For example, even where other details are essential for the Legislature effective forest treatment occurs, it is often to effectively assess whether the specific necessary to do additional maintenance and approach and funding amounts proposed by retreatments in subsequent years to prevent too the administration are justified. much vegetation regrowth, particularly of invasive • State Demonstration Forests. State species. Other programs areas—such as defensible demonstration forests are a valuable resource space inspections—should also be considered that helps provide research on forest-related ongoing efforts, since vegetation grows back issues. However, at the time of this analysis, it and regular inspections are needed to ensure was unclear what the proposed funding would continued compliance with state defensible space be used for, what specific outcomes would requirements. For these types of programs, the be expected, and why the proposed amount benefit to providing the certainty of multiyear funding was selected. could merit the allocation of ongoing General Fund resources, particularly in cases where there is We also note that we have some outstanding sufficient information on outcomes and spending questions on many of the proposals in the package rates thus far to enable the Legislature to be that received prior funding, including about (1) the reasonably confident about the appropriate amount outcomes that were achieved with the previous of funding to provide on an ongoing basis. funding, (2) when the implementing department Legislative Oversight Remains Important. anticipates fully committing the funding, (3) the In recent years, the Legislature has prioritized extent to which the department has capacity to conducting oversight activities—such as conducting utilize additional funds, and (4) the rationale for the legislative hearings and requiring periodic reports— specific amount of proposed funding. on wildfire issues, including the expenditure of Trade-Offs Associated With Two-Year Funding wildfire and forest resilience funding. We find that Approach. The $800 million of new funding in the it will be important for the Legislature to continue Governor’s package is proposed over a two-year to conduct oversight given the (1) importance of period. According to the administration, it is improving wildfire resilience, (2) amount of funding proposing this two-year funding approach in order that has been provided to date, and (3) value in to provide the certainty of multiyear funding, but gaining lessons-learned to inform future funding and also to limit ongoing General Fund commitments. policy decisions. To facilitate continued oversight, It is understandable that the administration is it will be important for the Legislature to obtain key cautious regarding providing ongoing General Fund information from the administration going forward, augmentations. Nonetheless, this funding approach including information on funded projects and the also presents a couple key challenges. outcomes that have been achieved. The Governor First, allocating funding for 2023-24 at this time, is not currently proposing that the reporting rather than waiting until the 2023-24 budget, means requirements that were codified for those previous that the allocation decisions would not benefit from packages be extended to this proposed package. additional information that may be gathered in the However, in our conversation with the administration, coming year. This includes additional information they expressed a commitment to report the on the administration’s continued progress towards information of the early action and 2021-22 committing early action and 2021-22 funding and packages for this proposed package as well. on the outcomes achieved with those funds. Such www.lao.ca.gov 9 2022-23 BUDGET RECOMMENDATIONS In this section of the brief, we provide our initial • Which Groups of Californians Are Most recommendations on the Governor’s wildfire and Impacted. The Legislature might want forest resilience package to inform the Legislature’s to consider how wildfires affect different budget deliberations. We may have additional or communities, how past funding has been modified recommendations as further information directed, and the extent to which the from the administration becomes available. proposed strategies could more equitably Consider Funding Amounts in Context of target new spending. For example, the Legislative Priorities. Given the lack of clear Governor’s plan includes funding dedicated evidence regarding the relative effectiveness of to forest health projects on tribal lands, and different mitigation and prevention activities, it is the home hardening program is intended to difficult for the Legislature to determine whether go to lower-income households that might the proposed package represents the “best” otherwise be less able to implement these mix of programs and level of funding to address safety improvements on their own. wildfire risks. For this reason, it will be particularly • Protecting State Assets and important for the Legislature to ensure that the total Responsibilities. For example, some funding level of funding proposed for wildfire and forest in the package is targeted to addressing risks resilience, as well as the mix among programs, on state-owned lands, such as state parks. is consistent with its priorities. In identifying its The Legislature could also consider whether funding priorities, some of the factors that we more funding should be spent in ways that recommend the Legislature consider include: better ensure protection of other state assets, such as highways and state buildings, or the • Emerging Information on Spending watersheds that provide most of the water Progress and Outcomes. The Legislature flows for the State Water Project. could consider focusing its allocations on programs that appear to have capacity to use Provide Statutory Guidance to Inform additional funds—as evidenced in part by their Program Implementation, as Appropriate. We ability to get previously appropriated funding recommend that the Legislature provide additional out to projects—and are able to provide statutory guidance on the programs proposed for relatively compelling information on outcomes. funding, as appropriate, through the adoption of • Ability to Test and Research Promising budget trailer legislation. Some examples of specific Approaches. The Legislature could consider statutory changes that would be merited include the extent to which the proposed funding (1) adopting state requirements for regional priority goes to demonstration projects or pilots plans, as well as requiring evaluation and reporting that could be helpful in improving the state on the Regional Forest and Fire Capacity program, of knowledge about effective approaches to and (2) requiring CalFire to create a staffing plan wildfire mitigation. aimed at ensuring that the department’s defensible • Which Harms Would Be Mitigated. For space staff are allocated in a way that enables it example, to the extent protecting homes and to meet its goal of inspecting every parcel at least reducing economic costs are high priorities, once every three years in all units. the Legislature could consider dedicating Defer Action Until Spring to Provide Time more funding to community hardening. to Secure and Assess Additional Information. Alternatively, to the extent that mitigating We recommend that the Legislature defer action damage to the environment from severe on the proposed package until the spring. This wildfires is a high priority, the Legislature would provide additional time for the administration could consider focusing more on improving to provide information on the specifics of its the health of forests and landscapes. proposals. Additionally, by the spring, more 10 LEGISLATIVE ANALYST’S OFFICE 2022-23 BUDGET information may be available on the pace of packages and the outcomes achieved—would be agencies’ spending of funding provided in previous available to inform allocation decisions. Additionally, packages, as well as on the outcomes of this the Legislature could consider providing ongoing spending. In particular, the Legislature should funding for certain programs for which there is a have the administration’s first required report clear ongoing need for at least a certain funding on the early action and 2021-22 packages by level and relatively robust information on outcomes. April. Together, this information would help the Continue Oversight Activities and Require Legislature determine whether it is comfortable Continuation of Reporting. Given the importance with the administration’s proposed approach of the programs involved and the level of spending and funding levels, or whether it would like to proposed, we recommend that the Legislature make modifications. continue to conduct oversight activities, such Consider Potential Alternatives to Two-Year as legislative hearings, on the administration’s Funding Plan. Given the challenges with the implementation of the wildfire and forest resilience administration’s plan to allocate two years of packages. This oversight will be important funding as part of the 2022-23 budget, we for holding the administration accountable for recommend the Legislature consider other delivering results, learning what is effective to alternatives. For example, one alternative would be improve future implementation, and informing future to allocate funding for only 2022-23 at this time. spending decisions. To facilitate this continued To the extent that the Legislature wants to provide oversight, we recommend that the Legislature funding for future years, it could set some amount extend the statutory reporting requirement for the aside in a designated fund to be allocated at a early action and 2021-22 budget packages to the future date when additional information—such as proposed package as well. on progress in spending the funding from prior www.lao.ca.gov 11 2022-23 BUDGET LAO PUBLICATIONS This brief was prepared by Helen Kerstein, and reviewed by Anthony Simbol. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, California 95814. 12 LEGISLATIVE ANALYST’S OFFICE